Prospective homeowners have until Oct. 1, 2008, to use down payment assistance from a seller to purchase a house.
The Housing and Economic Recovery Act of 2008 signed into law in July bars such seller-funded aid on Federal Housing Administration-backed mortgages.
Lawmakers added the provision to the housing relief package because about 40 percent of FHA borrowers who went into foreclosure in the past year received down payment assistance from a seller.
However, some industry professionals are worried that the rule change will keep some buyers out of the market.
Scott Syphax, president of The Nehemiah Corp., which runs a privately funded down payment assistance program, cites a report by housing research firm Zelman & Associates.
The report found that 10 to 25 percent of potential home buyers will have no way of securing home ownership without seller-funded down payment assistance, and stated that the rule change will have far-reaching implications for the real estate industry at large.
Source: Augusta Chronicle (GA), Tim Rausch
Wednesday, September 3, 2008
Monday, August 18, 2008
New Mortgage Law Has Buyers Scrambling
Housing industry observers expect that prospective buyers will scramble to take advantage of seller-funded down-payment assistance before a federal ban on such programs takes effect on Oct. 1.
The federal housing bill signed into law in July sews up a loophole that allows nonprofit organizations to gift mortgage down payments, and industry experts believe markets that have relied heavily on the programs could see new-home sales cut by as much as half.
Seller-funded downpayment assistance has served as a surrogate for subprime loans in some ways and has helped builders put first-time and low-income buyers into new homes.
"We will eventually go back to the mind-set of a society where you have to have 3 percent up-front to buy a home," says Phoenix real estate analyst Jim Belfiore.
Source: Poughkeepsie Journal (N.Y.) (08/18/08)
The federal housing bill signed into law in July sews up a loophole that allows nonprofit organizations to gift mortgage down payments, and industry experts believe markets that have relied heavily on the programs could see new-home sales cut by as much as half.
Seller-funded downpayment assistance has served as a surrogate for subprime loans in some ways and has helped builders put first-time and low-income buyers into new homes.
"We will eventually go back to the mind-set of a society where you have to have 3 percent up-front to buy a home," says Phoenix real estate analyst Jim Belfiore.
Source: Poughkeepsie Journal (N.Y.) (08/18/08)
Monday, August 4, 2008
Housing Rescue Bill
President George W. Bush signed into law a bipartisan housing stimulus bill Wednesday that is expected to bring greater stability to housing markets nationwide.
The bill, strongly supported by the NATIONAL ASSOCIATION OF REALTORS®, will help some 400,000 home owners refinance into affordable, government backed loans and offer a temporary first-time home buyer tax credit, which is expected to serve as an attractive incentive to buyers and help reduce high inventories of unsold homes.
The temporary first-time home buyer tax credit would offer $7,500 for the purchase of any home and an be used for purchases between April 9, 2008, and July 1, 2009.
The bill — H.R. 3221, the Housing and Economic Recovery Act of 2008 — also includes reform of Fannie Mae and Freddie Mac, FHA modernization, and permanent increases in conforming and FHA loan limits.
"These are all designed to help the housing and mortgage industries and boost the U.S. economy," NAR President Dick Gaylord said in a statement. “NAR has been a leading advocate for many of these changes long before the current housing and economic downturn. We are pleased that the president and Congress worked together to enact meaningful legislation that protects and enables families in this country to continue to strive for and enjoy the dream of homeownership.”
Source: NAR, Associated Press (7/30/08)
The bill, strongly supported by the NATIONAL ASSOCIATION OF REALTORS®, will help some 400,000 home owners refinance into affordable, government backed loans and offer a temporary first-time home buyer tax credit, which is expected to serve as an attractive incentive to buyers and help reduce high inventories of unsold homes.
The temporary first-time home buyer tax credit would offer $7,500 for the purchase of any home and an be used for purchases between April 9, 2008, and July 1, 2009.
The bill — H.R. 3221, the Housing and Economic Recovery Act of 2008 — also includes reform of Fannie Mae and Freddie Mac, FHA modernization, and permanent increases in conforming and FHA loan limits.
"These are all designed to help the housing and mortgage industries and boost the U.S. economy," NAR President Dick Gaylord said in a statement. “NAR has been a leading advocate for many of these changes long before the current housing and economic downturn. We are pleased that the president and Congress worked together to enact meaningful legislation that protects and enables families in this country to continue to strive for and enjoy the dream of homeownership.”
Source: NAR, Associated Press (7/30/08)
Tuesday, July 22, 2008
Good Credit Is Step One for Buyers
Potential home buyers inevitably must confront their credit scores.
Here’s a primer for those who have never faced this issue before:
A credit score, commonly known as a FICO score, is derived from a history of taking on debt and paying it off.
FICO scores range between 300 and 850, with the highest reflecting the best credit risk. The median FICO score nationally is around 720-723, according to Fair Isaac, the company for which FICO scores are named.
Except for a first-time buyers or those who have a large down payment, lenders will want to see a FICO score of 680 or higher, says Robert Satnick, chairman of the California Mortgage Bankers Association.
To get their FICO score, potential home buyers can go to Myfico.com, a unit of Fair Isaac. Obtaining a FICO score and a credit report from one of the three credit bureaus that collect this history costs $15.95; the combination of all three scores and the FICO report costs $47.85.
The credit factors that determine the score are: a person's payment history (35 percent of the score), how much they owe (30 percent), the mix of credit and installment loans they have (10 percent), the length of their credit history (15 percent), and whether they have applied for new credit recently (10 percent).
Source: The Associated Press, Alex Veiga
Here’s a primer for those who have never faced this issue before:
A credit score, commonly known as a FICO score, is derived from a history of taking on debt and paying it off.
FICO scores range between 300 and 850, with the highest reflecting the best credit risk. The median FICO score nationally is around 720-723, according to Fair Isaac, the company for which FICO scores are named.
Except for a first-time buyers or those who have a large down payment, lenders will want to see a FICO score of 680 or higher, says Robert Satnick, chairman of the California Mortgage Bankers Association.
To get their FICO score, potential home buyers can go to Myfico.com, a unit of Fair Isaac. Obtaining a FICO score and a credit report from one of the three credit bureaus that collect this history costs $15.95; the combination of all three scores and the FICO report costs $47.85.
The credit factors that determine the score are: a person's payment history (35 percent of the score), how much they owe (30 percent), the mix of credit and installment loans they have (10 percent), the length of their credit history (15 percent), and whether they have applied for new credit recently (10 percent).
Source: The Associated Press, Alex Veiga
Friday, June 27, 2008
Fannie Mae eliminates "declining market" downpayment.
Starting June 1, mortgage applicants who are underwritten by Fannie Mae's automated system online will qualify for 3% minimum down payments, wherever the property is located.
Borrowers whose applications require "manual" underwriting will pay 5% minimum down payments.
Under Fannie Mae's prior system, applicants buying in designated declining markets had to contribute 5% extra in upfront equity compared with borrowers in nondeclining market areas.
Freddie Mac's policy, which never employed a list of areas designated as declining, relied instead on lenders to flag applications using appraisal data or home price indexes. Freddie's policy also required 5% higher equity contributions upfront.
Critics, including the National Association of Realtors and consumer advocacy groups, had charged that Fannie Mae's policy served to further depress sales and real estate values in areas tainted as declining.
They also argued that many metropolitan markets experiencing price decreases contain sub-markets performing relatively well, and they do not deserve to be underwritten as high risk.
Fannie Mae's and Freddie Mac's policy switches should open the door to some additional low-down-payment mortgages -- and home sales -- in local areas once tagged as declining.
However, without the participation of private mortgage insurers, who report solely to stock market investors rather than to Congress, many borrowers will likely have to turn to the Federal Housing Administration, which accepts 3% down, does not have declining markets restrictions and whose loans can be purchased by Fannie Mae and Freddie Mac.
Source: Washington Post c/o NAR
Borrowers whose applications require "manual" underwriting will pay 5% minimum down payments.
Under Fannie Mae's prior system, applicants buying in designated declining markets had to contribute 5% extra in upfront equity compared with borrowers in nondeclining market areas.
Freddie Mac's policy, which never employed a list of areas designated as declining, relied instead on lenders to flag applications using appraisal data or home price indexes. Freddie's policy also required 5% higher equity contributions upfront.
Critics, including the National Association of Realtors and consumer advocacy groups, had charged that Fannie Mae's policy served to further depress sales and real estate values in areas tainted as declining.
They also argued that many metropolitan markets experiencing price decreases contain sub-markets performing relatively well, and they do not deserve to be underwritten as high risk.
Fannie Mae's and Freddie Mac's policy switches should open the door to some additional low-down-payment mortgages -- and home sales -- in local areas once tagged as declining.
However, without the participation of private mortgage insurers, who report solely to stock market investors rather than to Congress, many borrowers will likely have to turn to the Federal Housing Administration, which accepts 3% down, does not have declining markets restrictions and whose loans can be purchased by Fannie Mae and Freddie Mac.
Source: Washington Post c/o NAR
Wednesday, June 11, 2008
Tips for Painting the Exterior of Your House
A great exterior paint job should make passersby think, “What a lovely home.” But if you get it wrong, people who drive by will wonder, “What were they thinking?”
If you are are considering a fresh coat of paint on the outside of your home, you may want to take some advice from color consultant Paul Helmer. He offers these suggestions for painting various parts of the home:
• The roof. Think of the roof as one noticeable piece of color. The steeper the pitch, the more noticeable the roof is. If the roof is a light-colored composite, don’t choose a dark color for the house or it will look like the roof is trying to fly away. Use a color wheel to find pleasing shades.
• Exterior stone, brick or metal. Orange-tinted bricks look better with warm tones. Rose-tinted bricks are enhanced by cool tones. Repeat shutters or trim colors whenever possible.
• Vinyl windows or siding. Don’t paint the windows white and the house a deep color, otherwise, your house will look like a whitewall tire.
• Landscape artfully. Don’t plant shrubbery that looks ghastly against your house. For instance Burgundy-leaved shrubs clash with a yellowish-green house.
• Respect the neighbors. Don’t paint your home a color that either matches or clashes with the house next door.
If you are are considering a fresh coat of paint on the outside of your home, you may want to take some advice from color consultant Paul Helmer. He offers these suggestions for painting various parts of the home:
• The roof. Think of the roof as one noticeable piece of color. The steeper the pitch, the more noticeable the roof is. If the roof is a light-colored composite, don’t choose a dark color for the house or it will look like the roof is trying to fly away. Use a color wheel to find pleasing shades.
• Exterior stone, brick or metal. Orange-tinted bricks look better with warm tones. Rose-tinted bricks are enhanced by cool tones. Repeat shutters or trim colors whenever possible.
• Vinyl windows or siding. Don’t paint the windows white and the house a deep color, otherwise, your house will look like a whitewall tire.
• Landscape artfully. Don’t plant shrubbery that looks ghastly against your house. For instance Burgundy-leaved shrubs clash with a yellowish-green house.
• Respect the neighbors. Don’t paint your home a color that either matches or clashes with the house next door.
Tuesday, May 20, 2008
Simple Fix-Ups Pay Off Big for Sellers
Forget about overhauling the kitchen or redoing the bathroom. The fix-ups that pay off the most are often the simpler and more mundane, says Diane Saatchi, senior vice president at the Corcoran Group in New York.
Her specialty is selling high-end properties in the Hamptons. She recommends that sellers focus their improvements on small exterior changes rather than big-ticket projects inside the home. "Make the outside of the house look really great so that people fall in love between getting out of the car and the front door," Saatchi says.
That includes repainting the trim and adding new hardware, manicuring trees and shrubs, replacing old siding and replacing windows that aren’t energy efficient.
Nationally, returns for all major home-improvement projects are fetching 70 cents on the dollar, according to a Remodeling magazine’s survey of real-estate professionals conducted late last year. That's down from 80 cents in 2004.
Source: The Wall Street Journal, M.P. McQueen
Her specialty is selling high-end properties in the Hamptons. She recommends that sellers focus their improvements on small exterior changes rather than big-ticket projects inside the home. "Make the outside of the house look really great so that people fall in love between getting out of the car and the front door," Saatchi says.
That includes repainting the trim and adding new hardware, manicuring trees and shrubs, replacing old siding and replacing windows that aren’t energy efficient.
Nationally, returns for all major home-improvement projects are fetching 70 cents on the dollar, according to a Remodeling magazine’s survey of real-estate professionals conducted late last year. That's down from 80 cents in 2004.
Source: The Wall Street Journal, M.P. McQueen
Subscribe to:
Posts (Atom)
.jpg)
Posts
