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Understanding Federal Government Grants for Home Improvements

Beth Lindner — Wed, 17 Aug 2011 13:46:10 GMT

In today's economy, it may not be an easy choice to make improvements to your home. From basic necessities like a new roof to luxury enhancements such as an upgraded kitchen, deciding how much money to spend in a tightened economy can be a difficult decision for many homeowners to make.

Luckily, there are some federal government grants for home improvements available if you meet certain criteria. And for those that don't qualify, you might be able to deduct home improvements from income taxes.

Federal Government Grants for Home Improvements

Below are some of the most popular federal government grants for home improvements and who may qualify:

Rehabilitation and Repair Loan - Also known as the Section 203(k) program, this loan is the Department of Housing and Urban Development's main program providing assistance for repairing and rehabilitating single family properties. To be eligible, the property must be a one- to four-family dwelling that has been completed for at least one year.

Property Improvement Loan - Also known as Title 1, this program insures loans to finance the light or moderate rehabilitation of properties as well as the construction of nonresidential buildings on the property. This program may be used to insure such loans for up to 20 years on either single- or multifamily properties. The maximum loan amount is $25,000 and only lenders approved by HUD can qualify.

Rural Area Loans - The Department of Housing and Urban Development offers a number of single family housing programs to low- and moderate-income rural Americans through various loan, grant, and loan guarantee programs. Certain income and credit restrictions apply and should be verified with HUD.

Native American Loans - The Section 184 Indian Home Loan Guarantee Program is a home mortgage specifically designed for American Indian and Alaska Native families, Alaska Villages, Tribes, or Tribally Designated Housing Entities. Section 184 loans can be used for new construction, rehabilitation, the purchase of an existing home, or a home refinance.

HOME Program - The HOME program provides grants to communities in partnership with local nonprofit groups to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for low-income people.

Community Development Block Grant - This program provides homeowners with resources to address a wide range of development needs, benefiting low and moderate income households through the elimination of slums and addressing urgent community needs.

For those that don't qualify for any of the above grants, you can also check out the U.S. Department of Housing and Urban Development (HUD) website for additional home improvement programs. New programs are updated and added on the government website on a routine basis. If you're planning to deduct home improvements from income taxes, the IRS website is a great resource to see which improvements might qualify for a deduction. Generally, you can deduct expenses such as construction loan interest and sales tax on building materials. If you operate a home-based business or use part of the home as a rental, you can even deduct a percentage of all home improvement costs on your tax return.

Between all the government grants and tax return deductions available, you can be well on your way to enjoying an updated and improved living space that won't put a strain on your bank account.

To read more articles like this one click below:

http://beth.illinoishomezone.com/miarticles/articleid/8/

Selling your Home? Find IRS tax tips here

Beth Lindner — Tue, 09 Aug 2011 21:02:23 GMT

Ten Tax Tips for Individuals Selling Their Home

IRS Summertime Tax Tip 2011-15, August 8, 2011

The Internal Revenue Service has some important information to share with individuals who have sold or are about to sell their home. If you have a gain from the sale of your main home, you may qualify to exclude all or part of that gain from your income. Here are ten tips from the IRS to keep in mind when selling your home.

In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.
If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
If you can exclude all of the gain, you do not need to report the sale on your tax return.
If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.
You cannot deduct a loss from the sale of your main home.
Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.
If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.
If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year’s tax return.
When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.

For more information about selling your home, see IRS Publication 523, Selling Your Home. This publication is available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Links:

Publication 523, Selling Your Home ( PDF)
Form 5405, First-Time Homebuyer Credit and Repayment of the Credit ( PDF)
Form 8822, Change of Address ( PDF)

Page Last Reviewed or Updated: August 08, 2011

June Housing Starts

Beth Lindner — Fri, 22 Jul 2011 18:49:19 GMT

Data Watch

Housing starts increased 14.6% in June To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 7/19/2011

Housing starts increased 14.6% in June to 629,000 units at an annual rate, easily beating the consensus expected pace of 575,000. Starts are up 16.7% versus a year ago.

The increase in June was about evenly split between multi-family starts, which rose 30.4% (and which are extremely volatile from month to month) and single-family starts, which rose 9.4%. Multi-family starts are double levels from a year ago while single-family starts are up 0.4%.

Starts rose in all major regions of the country.

New building permits increased 2.5% in June to a 624,000 annual rate, also easily beating consensus expectations. Compared to a year ago, permits for multi-unit homes are up 34.0% while permits for single-family units are down 3.8%.

Implications: Housing starts spiked higher in June, rising 14.6%, well above consensus expectations. The gains were about evenly split between the volatile multi-family sector, which has been trending higher since late 2009, and single-family homes. This gain supports our view from a couple of months ago that the dip in home building in the Spring was due to the unusually wicked tornado season. The details of today’s report were strong as well. Building permits, a sign of future activity, beat consensus expectations and the total number of homes under construction increased for the first time since 2006. Starts are not going to increase every month, but home building is set to trend higher over the next several years. Population growth and “scrappage” rates suggest that once the excess inventory of homes is cleared that the underlying trend for building activity is about 1.6 million starts per year. That’s about 2.5 times current levels. In other words, home building must increase substantially just to get back to “normal” levels, not even to go back to the overbuilding of the prior decade. For at least the near term, growth in multi-family construction should outpace the growth in single-family units. There is an ongoing shift toward renting rather than owning. Part of that shift is due to tight credit conditions which are unlikely to disappear very soon.

This information contains forward-looking statements about various economic trends and strategies. You are cautioned that such forward-looking statements are subject to significant business, economic and competitive uncertainties and actual results could be materially different. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time and are the opinion of the individual strategist. Data comes from the following sources: Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, the Federal Reserve Board, and Haver Analytics. Data is taken from sources generally believed to be reliable but no guarantee is given to its accuracy.

This article can be found at:

http://www.ftportfolios.com/Commentary/EconomicResearch/2011/7/19/housing-starts-increased-14.6percent-in-june

Home Sales Spike

Beth Lindner — Fri, 31 Dec 2010 20:36:00 GMT

Jan2 - NAR Sales Spike

The up and down pace of sales that characterized the second half of 2010 appears to be ending on a high note.

The National Association of REALTORS® reports that existing home sales during November rose 5.6 percent over the previous month.

Even though November 2010 sales are still 27.9 percent below November 2009 – the initial deadline for the first-time homebuyer tax credit – NAR chief economist, Lawrence Yun, notes, “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable.”

He adds, “The relationship recently between mortgage interest rates, home prices and family income has been the most favorable on record for buying a home since we started measuring in 1970.Therefore, the market is recovering and we should trend up to a healthy, sustainable level in 2011.”

How do I get a loan?

Beth Lindner — Tue, 26 Oct 2010 12:42:00 GMT

What It Takes to Get a Loan

by Jessica L. Anderson, Pat Mertz Esswein and Joan Goldwasser
Thursday, October 14, 2010

Lenders loosen their grip, but your credit history will decide whether you get a mortgage, car loan or credit card.

When the financial crisis hit, many banks became tightfisted, and plenty of potential borrowers walked away empty-handed. But financial institutions have emerged from the recession stronger and ready to lend. "Credit is available. No question about it," says James Chessen, chief economist for the American Bankers Association. "Banks are being careful because the economy is still weak, but I don't know a bank out there that's not anxious to make a loan."

More from Kiplinger.com

• 12 New Rules for Your Money

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• Quiz: Financial Truth or Bunk

Keep in mind that from mortgages to car loans, your credit history and score matter more than they did prior to the crunch. Rates are at rock-bottom levels for borrowers with top-tier credit -- generally credit scores above 720. Before you shop rates, get your credit reports at www.annualcreditreport.com and check for errors. And buy your credit score from Equifax for $7.95 (or get a free score that's similar to the ones that lenders use from CreditKarma.com). That way you can see where you stand before you apply for a loan.

[Click here to check home equity rates in your area.]

Mortgages: Stricter Rules

Mortgage lenders want to make loans now, and they may even bid against one another for your business. But lending standards remain tight, and you must be prepared to produce a mound of paperwork to document your income and assets.

Rates are as low as they were in the 1950s, so going through the motions could pay off. In mid September, the average interest rate for a 30-year, fixed-rate conforming loan -- a mortgage of $417,000 or less -- was 4.5%, according to HSH Associates, a mortgage-tracking firm. The initial rate for a 5/1 adjustable-rate mortgage (a fixed rate for five years, followed by annual adjustments) was 3.6%.

Fannie Mae, Freddie Mac and the Federal Housing Administration continue to dominate the mortgage market, setting the standards for the loans that lenders make and sell to investors. So lenders strive to dot every i and cross every t when they qualify you.

If you're buying or refinancing the mortgage on your primary home, you'll need a minimum down payment of 5% to 10% for a conforming loan or 10% to 15% for a conforming jumbo loan (125% of a metro area's median home price, up to $729,750). With 20% or more down, you avoid private mortgage insurance, which typically costs 0.5% to 1.5% of your loan amount per year.

Fannie Mae and Freddie Mac allow a minimum credit score of 620 if you have at least 25% equity in the property or a score of 660 with equity of less than 25%; you'll get the best rate if your score exceeds 720. The FHA will soon require a minimum credit score of 580 to qualify with a down payment of 3.5%, but FHA lenders often impose a higher minimum score of 670.

In addition to your credit, lenders will also scrutinize your ability to pay, starting with your ratio of debt to income. Monthly housing expenses (principal, interest, taxes, hazard insurance, private mortgage insurance and association fees) shouldn't account for more than 28% of gross monthly income. Total debt shouldn't exceed 36% of gross income, but in some cases lenders stretch the maximum to 45%.

[Unlikely Champ in Global Real Estate]

Chris Bennett, a loan officer with HomeServices Lending, in Charlotte, N.C., says that he surprises borrowers "all the time" with preapproval of their loan when they aren't expecting it. Even people with lower credit scores may qualify if they have stable employment, a history of paying rent and credit lines on time, and money in the bank or in a retirement account.

However, Bennett also counsels some borrowers to delay their home purchase long enough to improve their credit score, eliminate debt, get a raise and save more money. They might earn a better interest rate, improving their buying power. Plus, he says, "it's not good to lay out every bit of cash you have if you won't have money for a rainy day."

Prove it. At a minimum, you must supply your pay stubs for the past 30 days and W-2 forms for the past two years. Lenders will want to see bank, retirement-account and investment statements for the past 60 days. Bennett says three types of borrowers will face additional requirements:

If you're self-employed or if 25% or more of your income is from commissions or bonuses, you must provide two years of tax returns. Lenders will average your income over the past two years to figure your debt-to-income ratio. If you have pursued opportunities to reduce your taxable income, you may not have sufficient income to qualify even though you may have a lot of money in the bank. Community banks, credit unions and other lenders that typically keep their loans on their own books are the best bet for borrowers with low incomes and high assets, says Bennett.

If you want to rent out your home and buy a new one, you must provide a signed lease for a minimum of 12 months. You can use only 75% of rental income to help qualify for the mortgage, and you must have at least 30% equity in your former home.

If you and your spouse are relocating for work and your spouse doesn't have a job yet, you must qualify for the loan based on one income unless your spouse has a signed agreement with an employer to begin work within 45 days of closing the loan.

Even if you qualify, you can throw a monkey wrench into the final loan approval if you take on new debt that could affect your credit score or your debt-to-income ratio. Some lenders pull another credit report just before closing. Another possible sticking point is the appraisal. Overly generous appraisals helped to fuel the housing bubble. Now, miserly ones may thwart your closing, says Guy Cecala, publisher of the newsletter Inside Mortgage Finance. Lenders will estimate the value of your home conservatively, and appraisers are generally following suit, especially if the local market is in flux.

Why sell your home today?

Beth Lindner — Mon, 18 Oct 2010 18:08:00 GMT

Waiting to sell? There are good reasons to list now

October 15, 2010|By Mary Ellen Podmolik | Local Scene

With interest rates well under 5 percent, and home prices at or near rock bottom, the real estate mantra that "now's a great time to buy" seems like a bit of a no-brainer.

But is there any reason to sell right now? Plenty of consumers are holding off from listing their homes because they want a tidier profit. Pose that question — why sell? — to local real estate professionals, and they tick off a number of reasons, with caveats attached.

1. You really need to sell. It could be a job transfer or it could be a need to have less house or a smaller mortgage payment at a lesser interest rate.

A homeowner who has been in a property more than five years, and who didn't tap into a large home equity line of credit or a cash-out refinancing, still has a chance of coming out ahead. Keep in mind that buyers in the market during the fourth quarter typically are serious buyers.

2. You want to trade up. It could be a bigger house, different neighborhood or a better school district, but it comes with a higher price tag. Do the math; this might be the right time.

A home that was once worth $300,000 may now be worth $240,000 in a market where prices have fallen 20 percent. Wow, you think, the seller is taking a bath.

But that seller may also be a prospective buyer who wants a house that once was valued at $400,000. With an equivalent market drop and a realistic listing price, that house may now sell for $320,000. So, in effect, the person is losing $60,000 on the sale of one home but coming out ahead $20,000 on the purchase of another.

Keep in mind the spread may be even greater. There's a smaller pool of potential buyers for more expensive homes, so sellers may be more willing to cut their price to get a deal done.

3. You want to live in a worse-hit market. It depends on the debt load carried on the current residence, but if you've dreamed of moving to a "sunshine" state like Florida, Nevada or California, your money will go far.

4. You're the new supply. There's an abundance of properties that have been sitting on the market six months or more, many of them with multiple price reductions. A home that has just come on the market, particularly if it's priced competitively, will get the attention of serious buyers tired of the existing inventory.

Bad timing: Last week, the White House said the president would not sign a bill that would have, according to critics, made it easier for lenders to reclaim ownership of homes in foreclosure.

What does $300K buy you in America?

Beth Lindner — Sun, 10 Oct 2010 19:57:00 GMT

There's good news for Americans thinking about buying a new house. Sure, the real estate market continues to struggle. But the median sale price for a single-family home is 22% lower than it was at its 2006 peak, and would-be buyers who've saved up a nest egg can get themselves some real bargains.

Some experts are still bullish on a housing recovery. But meanwhile, many American families have been unable to get financing as banks tighten lending standards, or are purposefully waiting out the market. That means there's pent-up demand, says Dr. Richard Green, director of the Lusk Center for Real Estate at the University of Southern California, "but you can still get about 33% more house than you could at the peak."

The bargains are better in some cities than others. A dollar buys a lot more in cities that were particularly hard-hit by the bursting real estate bubble--and you could spend the same on a tiny apartment in New York than you might for a five-bedroom manor in Florida.

In Pictures: What $300,000 Buys In Homes Across America

In order to compare what you can get for your money across the country, we asked Realtor.com to look at 10 large U.S. cities and find a typical $300,000 single-family home in each. We chose $300,000 because it's a price that, depending on where you live, either barely scratches the low end of the market, or soars above the median price. In most cities, buyers can find a respectable house at that price--but the homes' features, size and proximity to the city center vary dramatically depending on geography.

Miami, Florida

In Miami, where record foreclosures and the collapse of a construction-dependent economy has decimated jobs, even the most speculative of investors are wary of buying new property. But with home prices well below their peak, deals abound. For $300,000 you'd be able to buy the largest house on our list, a pristine 3,449-square-foot, five-bedroom villa built in a sprawling subdivision in 2005, near the height of Miami's building frenzy.

In contrast, the same amount of money in Seattle, you'd have to settle for a simple three-bedroom one-third that size.

Washington, D.C.

Washington, D.C., has a robust real estate market, at least compared with most other metros. The median sales price for a single-family home in the second quarter of 2010 was $331,600, according to the National Association of Realtors, so $300,000 will only buy you a modest stucco three-bedroom in a far-flung neighborhood. In Chicago, where houses sell for a median $203,800, you'll have more options, including a pleasant two-story with the same number of bedrooms, but double the bathrooms, and located in the city's "Bungalow Belt."

San Diego, California

By far the tiniest dwelling on our list is a 576-square-foot one-bedroom San Diego home that's in danger of foreclosure. But San Diegans might consider this potential short-sale with an upgraded kitchen, fireplace and tidy backyard a deal. While prices have fallen far from their peak in the city, they are still well above the national average--the median home price is $392,600.

You can get a lot more for your money in Houston, where $300,000 will buy a 3,193 square foot villa with 4 bedrooms and a hot tub. Lush palmetto trees frame the front door and a vaulted ceiling greets you on entry. In Houston, prices have always been more realistic. "Price drops are correlated with how far out of whack prices got in the first place," says Green. "Houston never went up very much, so it didn't have far to fall."

Atlanta, Georgia

In Atlanta $300,000 is more than double the median sale price. You can live quite well there for the money, in a charming brick two-bedroom built in 1938 in the city's historic Grant Park neighborhood. Wainscoting and crown moldings deck the interior, and the lot includes a large, shady backyard.

You'll also get a historic house for that price in Boston, but one that's far more run-down. The Victorian fixer-upper has potential, but the siding and interior details need work, and the rooms feel small and dark.

Boston, Massachusetts

Whether a few hundred grand will get you a sprawling great room and southern exposure or a dingy box on the outskirts of town, the most important consideration for home buyers should always be their personal circumstances, says Green. Viewing a home as an investment and not just a place to live is a dangerous move, since most buyers can't time or predict the vagaries of the housing market. "If you're buying it thinking ‘I'll probably make some money on it,' you're probably already buying it for the wrong reason."

What $300,000 Buys In Homes Across America

Atlanta, Ga.
Listing
Price: $305,000
Bedrooms/bathrooms: 2/2
Square Feet: 1,241
Description: 1930s brick bungalow with hardwood floors, central air conditioning and a library. Keller Williams Realty Peachtree Road has the listing.

Baltimore, Md.
Listing
Price: $299,999
Bedrooms/bathrooms: 3/1
Square Feet: 1,446
Description: Craftsman style stone-and-siding home with kitchen upgrades, oak floors and fireplace. Coldwell Banker Residential Brokerage Towson has the listing.

Boston, Ma.
Listing
Price: $300,000
Bedrooms/bathrooms: 4/2
Square Feet: 1,989
Description: Traditional row house on a corner lot with hardwood floors, a fireplace and finished basement. Coldwell Banker Residential Mortgage Milton has the listing.

Chicago, Ill.
Listing
Price: $305,000
Bedrooms/bathrooms: 3/2.5
Square Feet: 1,731
Description: Georgian brick home with ceramic-tiled kitchen, oak staircase and expansive patio and backyard. Century 21 Pro-Team has the listing.

Miami, Fla.
Listing
Price: $299,000
Bedrooms/bathrooms: 5/4
Square Feet: 3,449
Description: Tract home built just before the bust in a sunny subdivision. Williams Realty Premier Properties has the listing.

Click here to see the full list of What $300,000 Buys In Homes Across America

10 Reasons Why it's GOOD to buy a home

Beth Lindner — Thu, 30 Sep 2010 09:44:00 GMT

• Worldwsj.com Wall Street Journal
• SEPTEMBER 16, 2010, 7:13 A.M. ET
• By Brett Arends
ENOUGH WITH THE DOOM AND GLOOM ABOUT HOMEOWNERSHIP!
Brett Arends explains why owning a home is a good thing.
So here are 10 reasons why it's good to buy a home.

1. You can get a good deal. Especially if you play hardball. This is a buyer's market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired. We're four to five years into the biggest housing bust in modern history. And prices have come down a long way– about 30% from their peak, according to Standard & Poor's Case-Shiller Index, which tracks home prices in 20 big cities. Will prices fall further? Sure, they could. You'll never catch the bottom. It doesn't really matter so much in the long haul.

2. Mortgages are cheap. These are the lowest rates on record. As recently as two years ago they were about 6.3%. If inflation picks up, you won't see these mortgage rates again in your lifetime. And if we get deflation, and rates fall further, you can refinance.

3. You'll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you'll get a tax break on capital gains–if any–when you sell. Sure, you'll need to do your math. You'll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.

4. It'll be yours. You can have the kitchen and bathrooms you want. You can move the walls, build an extension–zoning permitted–or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You'll feel better about your own place if you own it than if you rent.

5. You'll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you're better off buying.

6. It offers some inflation protection. No, it's not perfect. But studies by Professor Karl "Chip" Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That's valuable inflation insurance, especially if you're young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late. That also makes homeownership look a little better by contrast.

7. It's risk capital. No, your home isn't the stock market and you shouldn't view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.

8. It's forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won't. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn't a cost. You're just paying yourself by building equity. As a forced monthly saving, it's a good discipline.

9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That's below last year's peak, but well above typical levels, and enough for about a year's worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.

10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out.

30 Year Mortgage Rates Plumb AGAIN

Beth Lindner — Sun, 19 Sep 2010 15:30:02 GMT

Daily Real Estate News | October 15, 2010 | Share

30-Year Mortgage Rates Plumb New Depths
Freddie Mac reports that the average interest on 30-year fixed mortgages slipped to an all-time low, for the third consecutive week, to 4.19 percent.

At the same time, 15-year fixed-rate loans and the five-year adjustable-mortgage rate both also hit record lows. Rates on the former were 3.62 percent, while the latter averaged just 3.47 percent.

Source: The Wall Street Journal, Nathan Becker (10/15/10)

Fall Buyer and Seller Tips

Beth Lindner — Sat, 18 Sep 2010 04:17:00 GMT

Home Buying and Selling Tips for Fall
HGTV’s real estate site Front Door says the weeks between now and the end-of-the year holidays are the best ones to find a bargain. Here are some of their tips for fall buyers and sellers:

Fall Sellers:
· Replace faded summer plants with fall-blooming flowers and add autumn decorations to the home.
· Expect low-ball offers and be prepared with higher counter offers.
· Freshen up listing photos by shooting pictures that make it less obvious that the seasons have changed.
· Price the home to sell. A price that is a little lower than the competition may be a winning move.
· Be willing to show the property and hold open houses whenever potential buyers are ready.

Fall Buyers:
· Look for motivated sellers who have a reason to move on by the end of the year.
· Explore new constructions. Builders are often particularly interested in selling before the new tax year.
· Beware of fall maintenance issues. Consider overflowing gutters and leaf-covered lawns warning signs.
· Shape offers carefully. Even in this market it is possible to turn sellers off with a too-low bid.

Source: FrontDoor.com (09/16/2010)

Americans Still Want to Own A Home

Beth Lindner — Fri, 20 Aug 2010 23:49:00 GMT

Americans Still Want to Own a Home
More than 72 percent of American adults say that home ownership is a part of their personal American dream, down from 77 percent six months ago, according to a survey for Trulia.com.

About 23 percent said their attitude toward homeownership has grown more positive in the last six months, while 19 percent say they feel more negatively.

Among those adults who are renting a home, 27 percent say they never intend to buy. Of the renters who do plan to purchase eventually, 68 percent said it would be more than two years before they do.

The factors that would encourage them to buy now are:

• Able to save a down payment, 47 percent
• Land a new job, 28 percent
• Interest rates stay low or fall lower, 27 percent
• Some other factor that persuades them that buying makes financial sense, 24 percent
• Get a raise, 23 percent
• Local real estate market stabilizes, 9 percent

Source: Trulia.com (08/18/2010)

Mortgage Rates Hit All Time LOW

Beth Lindner — Fri, 20 Aug 2010 23:46:00 GMT

Daily Real Estate News | August 20, 2010 | Share

Mortgage Rates Drop to New Lows
Fixed mortgage rates have maintained recent lows or set new ones for more than two months now, sinking to 4.42 percent on 30-year loans for the week ended Aug. 19. The rate is down from 4.44 percent last week and is the lowest ever recorded since Freddie Mac launched its survey almost 40 years ago.

The fixed 15-year average also hit a new low, at 3.9 percent; while five- and one-year adjustable-rate mortgages remained flat at 3.56 percent and 3.53 percent, respectively.

Source: The Wall Street Journal, Amy Hoak (08/20/10)

Real Estate August 2010

Beth Lindner — Sat, 14 Aug 2010 10:42:00 GMT

FHA Loan Costs to Increase

Beth Lindner — Sat, 07 Aug 2010 02:26:00 GMT

REUTERS August 6, 2010

UPDATE 1-US FHA set to increase borrowing costs next month

By Corbett B. Daly

WASHINGTON Aug 6 (Reuters) - The Federal Housing Administration plans on Sept. 7 to raise the cost of loans backed by the agency in an effort to strengthen its cash-strapped balance sheet.

The move follows Senate approval this week of a bill to allow the FHA to nearly triple the annual fees it charges borrowers, although the FHA plans more modest increases at first. The House of Representatives had already approved its version and President Barack Obama is expected to sign the bill this month.

Under the law, the FHA would have the authority to raise annual mortgage insurance premiums -- paid by the borrower over the life of the loan -- to a maximum 1.5 percent.

That is up from the current 0.55 percent maximum, although FHA Commissioner David Stevens has said the premium would rise gradually -- first to 0.85 percent or 0.9 percent, depending on the size of the borrower's down payment.

The new fees are expected to raise about $3.6 billion annually for the FHA.

The FHA, which does not make loans directly, guarantees loans made to borrowers who meet certain restrictions.

As the mortgage crisis unfolded and private lenders began to pull back from lending, the FHA's total volume rose from $54 billion in 2006 to $376 billion in 2009, according to Inside Mortgage Finance, an industry publication.

The FHA's market share of total originations topped 20 percent in the three months through June, more than 10 times the share in 2006, when it was less than 2 percent.

While raising the annual premium, the FHA has said it also plans to lower a separate upfront premium from the current 2.25 percent to about 1 percent to offset the cost of the annual premium. The upfront premium is paid at the time a loan is issued.

Stevens has said it makes more sense for the fees to be paid throughout the life of the loan in the annual premium instead of forcing borrowers to pay them when the loan is made.

New borrowers would pay an average of just under $40 per month more under the new fee structure.

The minimum down payments are still 3.5 percent for most borrowers. Lawmakers struck down a Republican proposal to raise them to 5 percent.

The FHA has capital reserves equal to just 0.53 percent of the value of the thousands of outstanding U.S. home mortgages it insures, well below the 2.0 percent required by law, according to an independent actuarial study released late last year. A new study is expected to be released this fall.

The House has also passed a broader bill to strengthen the FHA's enforcement capabilities. The Senate is expected to consider its version of the broader bill after senators return from their summer recess in September. (Reporting by Corbett B. Daly; Editing by XXX)

How Long Does A Short Sale Take?

Beth Lindner — Sun, 18 Jul 2010 14:56:00 GMT

From a Trusted Mortgage Lender:

Remember, this is an Average...we have all certainly had ones that took longer than this.

Average close time by bank

Below is a report that gives the average days to close from the day the short sale package was submitted with purchase contract to the bank.

Bank	Days
American Home Mortgage	123
ASC (Americas Servicing Company)	191
Aurora Loan Servicing	78
Bank of America / Countrywide	165
Bank of America Home Equity	181
Bank United	120
Central Mortgage	48
Citi Mortgage	120
EMC	143
Everhome Mortgage	70
Fifth Third Bank	66
First Horizon (Metlife)	234
GMAC	97
Home Servicing	172
HSBC Mortgage Services	49
Indymac	213
Mariners Properties
Merrill Lynch / PHH Mortgage	122
Midland Mortgage	97
Regions Mortgage	115
Select Portfolio Servicing (SPS)	85
Thornburg	153
Wamu/Chase Mortgage	167
Wells Fargo	129

FHA loans

Beth Lindner — Thu, 01 Jul 2010 22:07:49 GMT

Thursday, Jul 1st, 2010
	Brought to you by and sponsored by

For Your Clients: 7 Things All Borrowers Should Know About FHA Loans

RISMEDIA, July 1, 2010--FHA Pros, LLC, a national FHA condo approval service, has developed a list of facts speaking to the top misconceptions associated with FHA loans in order to help home buyers better navigate an already confusing market. FHA loans are mortgages issued by qualified lenders and insured by the Federal Housing Administration (FHA).

“We have seen home buyer interest in FHA loans go from practically zero three years ago to upwards of 87 percent today,” said Christopher Gardner, founder and president of FHA Pros, LLC. “Despite this rapid rise in popularity, many buyers still do not fully understand the benefits of these loans, and we believe it’s time to change that.”

1. FHA Loans Are Not Only For Lower-Income Borrowers. FHA loans are available to everyone. In fact, even Bill Gates can get one. There is no maximum income restriction associated with FHA loans. Borrowers do need to substantiate income and assets by submitting proper documentation. This requirement ensures that borrowers are well-vetted and truly able to afford their future homes.

2. FHA Loans Are Not Only For First-Time Buyers. Many people believe FHA loans are available only to first-time homebuyers. This is not the case. Whether borrowers are making their first home purchase or their fifth, they can look to FHA loans as a home financing option.

3. FHA Loans Are Not Just Small Loans; In Fact, Loan Amounts Can Be As High As Almost $800,000. The government recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market. The amount a buyer can borrow varies from county to county. Later this summer, condo buyers interested in FHA loans can visit www.checkfhaapproval.com to instantly identify FHA-approved condo associations and review maximum loan amounts for a given location.

4. FHA Loans Are Not Affiliated With The Section 8 Housing Program. While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing. FHA loans are simply mortgages insured by FHA. This insurance provided by the federal government allows lenders to lend more freely by assuring them that they will be repaid in the event of default. Most traditional lenders, including Wells Fargo & Co., JP Morgan Chase and Citigroup are able to provide FHA loans to their customers.

5. FHA Loans Are Often More Affordable Than Conventional Loans. While FHA loans typically offer the same interest rates as other loans, borrowers benefit from a much lower down payment of as low as 3.5 percent.

6. FHA-Approved Condo Developments Are More Desirable To Buyers. With 87 percent of home buyers indicating that they plan to use FHA loans, condo associations that are not FHA approved are missing out on a significant pool of prospective buyers. Under rules in place since February 2010, an entire condominium development must now apply to HUD and be granted FHA approval before a buyer can purchase a unit in an association with an FHA loan or before an existing unit owner can refinance into an FHA loan.

Due to the general unwillingness of today’s lenders to extend credit with respect to conventional loans, many borrowers find that FHA is their best bet. Lenders don’t mind lending when the federal government (FHA) assures them of repayment.

Homeowners associations (HOAs) should note that although FHA-insured mortgages might be easier to obtain, they are not “risky” loans, due in large part to the strict “full documentation” requirements placed on borrowers.

Individual buyers or sellers can initiate the approval process or current owners can encourage their HOA to apply. More information about the FHA- approval process is available at www.getfhaapproval.com. />
7. FHA Loans Are Assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable. This means that when a seller with an FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable in times of rising interest rates.

“Now, more than ever, buyers and sellers need to understand the options available to them when it comes time to buy a home,” continued Gardner. “At FHA Pros we have worked with countless HOAs, attorneys and individuals to easily and efficiently navigate the historically tricky FHA-approval process.”

Mortgage Rates At An All Time Low

Beth Lindner — Sun, 27 Jun 2010 00:33:00 GMT

Daily Real Estate News | June 25, 2010 | Share

Mortgage Rates Hit an All-Time Low
Average interest on a 30-year fixed mortgage fell to an all-time low of 4.69 percent this week, down from 4.75 percent a week ago, reports Freddie Mac.

Although rates have held below 5 percent since early May, Michael Fratantoni of the Mortgage Bankers Association notes that demand for purchase loans has fallen in six of the past seven weeks and now is at a 13-year low. Consumers have grown used to low rates, he explains, adding that they balk at buying because they are more concerned about stagnant wages and high unemployment.

Source: Washington Post, Dina ElBoghdady (06/25/10)

© Copyright 2010 Information Inc.

Chicago Area Housing Trends June 2010

Beth Lindner — Mon, 14 Jun 2010 22:56:00 GMT

Chicago Housing Trends June 2010

Credit Checks for Home Purchases

Beth Lindner — Tue, 18 May 2010 11:25:00 GMT

from our amazing team leader, Ron Donovan:

Beginning June 1 folks, lenders originating mortgages being sold to Fannie Mae

Will have to pull a second credit report just before the loan closes!

The new quality control requirement is designed to prevent a type of mortgage fraud called "shotgunning," (which I've never heard of before) but the guidelines could send lenders on wild goose chases. Will Dillard, a vice president of operations at SettlementOne Credit Corp., a San Diego reseller of credit data, told American Banker that pulling a second credit report would help stop such frauds but that lenders might also waste time checking out false alarms. "If they see another inquiry, Fannie would like to see lenders query those creditors," Dillard said. "If you're at the funding table ready to fund and you see a new inquiry popping up, the question is, do you send your underwriter out...to track down Honda Motor if the borrower is also trying to buy a new car?"

Bottom line is your buyers need to know NOT to buy anything on credit, apply for credit, do ANYTHING with their credit until they close on their new home.

Illinois Home Sales up 32.8% in March 2010

Beth Lindner — Wed, 28 Apr 2010 01:45:00 GMT

Illinois home sales up 32.8% in March. Statewide home sales totaled 9,487 in March, the seventh consecutive month of year-over-year increases, according to the latest IAR housing report. The statewide median price held steady at $148,500. Find the April forecast, market talking points along with county-by-county stats. Nationally, home sales rose 6.8 percent, according to NAR's latest report.

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Mortgage Rates At An All Time Low

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Credit Checks for Home Purchases

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