FHA Guidelines for 2009 – an overview:

–         NEW permanent loan limits up to $625,500

–         Down payment options as low as 3.5% on owner occupied properties, including 2-4 unit buildings

–         Low, competitive rates

–         Gift funds allowed - buyer’s entire cash investment can be gifted

–         No reserves required on 1-2 unit properties.

–         More flexible credit guidelines than other loan products

–         Seller contributions allowed – up to 6% on all LTVs (can include closing costs)

–         Fixed- and adjustable-rate loans available

–         Loans are assumable with credit approval

•          Property Types

–         Owner Occupied, 1 -4 units

–         SFRs and PUDs (attached or detached)

–         Condos (with project approval)

–         New Construction

–         Leased Land (with lease approval)

•      Purchase Loan Types

–         15, 20, 25, and 30 year fixed rate terms

–         3/1, 5/1. 7/1 and 10/1 ARMS*

Financial Meltdown – Forget About Buying a House???

Are You Kidding?? Once again media hysteria has created a wide gulf between realty and consumer perception. The emotional charge of news created for ratings is leading consumers to the wrong conclusions about the mortgage market.

Talking to many people over the last few weeks, I find a common misperception of – it’s impossible to get a mortgage these days, so why bother looking for a home.

The reality is – yes, it is more challenging to nurse the escrow process through to a successful closing, but mortgages are available. In fact, mortgages are probably safer than at any time in history. 

“There is no shortage of money available for home mortgages, no freezing of credit to purchase or refinance a house. Why? Because the American mortgage market effectively has been federalized – at least for the time being. More than 90% of new loans now are being made through the Federal Housing Administration insurance program, plus Fannie Mae and Freddie Mac,” says Kenneth Harney.

Mortgage Market Status

• Tougher Credit Standards – you can still get 97% financing and there is still money for first-time home buyers.
• Interest Rates – remain at historically attractive levels.
• Conforming Loan Maximums are at $729,500 through 12/31/08
• Home Prices have rolled back to 2003 and 2004 levels in many areas.

Housing and mortgage leaders say consumer worries about the stock market have obscured positive developments underway in real estate.

“The mortgage market has never shut down despite the global financial crisis,” says David Kittle of Wholesale Lending, Inc.

Tim Soldati of First Priority Financial in Pleasanton, California says, “The daily changes being reported in the news are leading consumers to the wrong conclusions about the availability of home mortgages.”

If you want to make the deal of a lifetime on a home in Danville, San Ramon, Walnut Creek, Pleasanton, Alamo, Dublin, or Concord contact Paul (925) 963-4226

Changes to FHA Down Payment Assistance Programs like Nehemiah

There has been a lot of discussion in the news about changes to "gifting" programs for down payment assistance to homeowners such as the Nehemiah program.  In order to clarify this for those of you who are considering down payment assistance or know someone who is, following is a recent article by the California Association of Realtors that sheds some light on the matter. 

The main points to keep in mind are:

1. The change mainly eliminates the ability of the Seller (or anyone who benefits from the sale of the home) to contribute funds towards the down payment or a "gifting" program.
2. The change takes place as of October 1, 2008

So, if you or anyone you know are considering taking advantage of this program that allows you to purchase a home with little or no downpayment, please contact us immediately as you must close escrow before October 1st. 

Here are some comments by the California Association of Realtors:

• The Housing bill being considered in Congress this week does NOT eliminate all down payment assistance programs from eligibility for FHA insurance. The legislation would only prohibit seller-funded down payment assistance, or assistance from someone who financially benefits from the transaction.
• Loans that receive down payment assistance perform less well than loans without down payment assistance. A recent
• Studies showed that homes sold using this type of down payment assistance typically sold for 2-3% higher than comparable homes without down payment assistance.

Call (925) 984-4910 for more info

Current issues facing the real estate market:

• Increasing Foreclosures
• Liquidity Squeeze
• Tightened Lending Standards
• Rising Inventories
• Falling Prices
• Affordability
• Tightening Economy
• Consumer Psychology
• Fewer Available Sales
• Lower Sales Volume
• Less Available Income

What the Government Is Doing to Help the Housing Sector

• Mortgage Forgiveness Debt Relief Act
• FHA Secure
• Hope Now Alliance
• Interest Rate Cut
• Mortgage Reform and Anti-Predatory Lending
• Economic Stimulus Package
• GSE Reform – Increased Conforming Loan Limits
• FHA Modernization – Increased FHA Loan Limits

Methods Sellers Use to Sell Homes

For Sale by Owner – FSBO

• In 2007, the typical FSBO sold for $180,000, compared with $240,000 for an agent-assisted home sale
• In 2006, FSBOs sold for $187,200 and agent-assisted sellers sold for $247,000
• In 2007, 56% of FSBOs that sold didn’t list with an agent because they didn’t want to pay the commission.
• Up from 51% in 2006
• In 2007, 21% of FSBOs sold their house to a friend or relative
• Down from 22% in 2006
• In 2007, 11% of FSBOs were contacted directly by the buyer.
• Down from 12% in 2006

In 2007, the typical home listed sold within 8 weeks – up from 6 weeks in 2006 and 4 weeks in 2005

2007 Real Estate 2008

• Part 1
• Part 2
• Part 3
• Part 4
• Part 5
• Part 6

Click Here to Get In-Depth Local Real Estate Market Data - Updated Weekly

Here’s a quick update update on the status of the temporary increase in conforming and government loan limits:

• HUD issued the new conforming and FHA 203B loan limits late yesterday 
• GSE (Fannie Mae & Freddie Mac) loans have increased in about 250 counties – maximum loans are as high as $793,750 in Honolulu and $729,750 in some areas of the continental US
• FHA loans have had increases both in terms of the same high cost areas noted above and low/moderate income areas where the minimum maximum FHA loan increased to $271,050

What We Know and Don’t Know At This Point:

• Currently FHA has not indicated that they will change their loan level guidelines – this would allow for max LTV’s of 97.5%
• Fannie Mae & Freddie Mac have indicated they will have more conservative guidelines and are awaiting OFHEO (secondary market) approval before publishing 
• Program availability will be limited – initially 30 year fixed, 5/1 and 5/1 interest only are the likely products
• There may not be cash out refinances, non-owner occupied, or 2-4 unit GSE loans despite the fact that HUD published county limits for these loan types
• It is likely that maximum GSE LTV’s will be 90% and may be even lower for rate/term refinance loans
• It is likely that there will be a minimum FICO floor established
• There are a lot of unknowns in the final guidelines that are stopping us from being able to program or publish any program specifics at this time

Click Here to Get In-Depth Local Real Estate Market Data - Updated Weekly