• Below market interest rates
• Down payment assistance grants
• Second mortgages

A 4% Second Lien Deferred Forgivable Loan May Be Used For Down Payment and Normal and Customary Closing Costs:

• Based on principle amount of the 1st mortgage note
• No Interest
• Deferred 10 years and forgiven 1/10 every year
• Fully forgiven after 10th year

Requirements for the home buyer:

• Must complete a pre-purchase home buyer education course under the program
• The certificate must be included in the closing files

So in a nutshell, this program will replace the short term bridge loan program for using the $8,000 tax credit towards the down payment and closing costs and replace it with a second forgivable lien.  For additional information contact me immediately as this is a first come, first serve program.

First, you must understand the local market and where prices are headed along with the demand for real estate in that particular area.  Due diligence is the key here.  Look into the City and Government’s future use plans for that area.  The more you know about that market the better off you will be.

Second, purchase properties with a written business plan in effect.  This is how the professionals do it, this is how you should to.  Make sure you incorporate an entrance strategy as well as an exit strategy for many different scenarios. 

Lastly, analyze all of the costs of ownership upfront.  Everything.  Not just the price you paid for it and what it is worth but how much income it will bring in, what repairs are needed, taxes, insurance, sales commissions, management costs, rental maintenance, etc.  You must know everything upfront because surprises in Real Estate aren’t really surprises, they are more like a blow to the head.

1. San Antonio
2. Austin
3. Oklahoma City
4. Little Rock
5. Dallas-Fort Worth

The factors considered when ranking included unemployment rate, gross product, and home prices.  Most of the Nation slipped into a recession beginning in December of 2007 while the economy here stayed strong throughout 2008.  Home prices have remained relatively stable and any declines have been mild.  Let’s keep up the good work Texas.

The 90 day rule, which is the primary component of FHA’s anti-flipping policy. No FHA funding will be provided for properties purchased within 90 days of the seller’s acquisition of the property.  Proponents of the CAR motion argued that, in the current environment, the effect of the anti-flipping rule was actually to harm potential FHA buyers and to shut them out of the real estate market.  The fact that buyers using FHA financing are less preferable to many sellers than those who have cash and is especially true in the REO area of home sales.  This is because banks want faster escrows than can be expected from FHA financing.  It is frequently the case that an REO property will be in poor condition, requiring repairs, and will not pass an FHA appraisal. Effectively, then, FHA buyers are shut out of the REO market.

Investors buy REOs to hold; others buy to realize a short-term profit. They usually must do rehab work to bring the property into marketable condition and that work adds value and, of course, the investor(s) will seek to profit from this. Does that mean the property will be sold for an artificially inflated value; of course not.  This is especially not true in today’s appraisals where it is hard to get an appraisal to come in at market value.

These realities are shutting FHA buyers out of the REO market and with the 90-day rule they are also shut out of the opportunity to buy a rehabbed house.  Hopefully TAR (Texas Association of Realtors) will jump on the bandwagon and argue the same points along with other states and we can do something about this.

Guidelines issued earlier in the month for a $75 billion housing plan include the potential for banks to get government incentive payments in cases where borrowers are allowed to sell their home at a loss, bypassing the foreclosure process.  Information available at MakingHomeAffordable.gov will help one see how much of a mortgage modification one might qualify for as well as answer some questions regarding loan modifications.  If the borrower (homeowner) can complete the short sale, then the incentives go like this:

The homeowner can receive up to $1500 in relocation assistance and the servicers can get up to $1000 compensation.

“You have a primary lien holder and they’ll love this program because the servicers will get paid an additional $1000 for completing the short sales. On the other hand, you have all the subordinate lien holders in a short sale who also need to give their approval for the short sale in order for it to happen. The problem, though, is that the subordinate lien holders are the ones that are getting totally wiped out and under the program they would receive $3000 for their lien and in exchange they would have to write off the remaining balance of the loan and give up any rights that they would normally have to pursue the borrower thereafter for the remaining balance,” Olsen states.

This program will definitely help the homeowner, bank and speed up the short sale process at the same time; a win win situation for everyone.

Even buyers without A-plus credit should be able to get a loan. “If you go to enough lenders, you can typically get a loan even with a low credit score. The terms, of course, are not as attractive,” says Spencer Rascoff, chief operating officer of Zillow.com.

Please contact me today for a list of lenders who are as eager as you to get the deal closed before the tax credit deadline.  They will even show you how to apply for the credit and get the paperwork ready.

“The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight,” says Jay Brinkmann, MBA’s chief economist, in a published statement.

Brinkmann said that normally there is a large spike in short-term mortgage delinquencies at the end of the year because of high heating bills and holiday expenditures. This year, there was not only no spike, but the 30-day delinquency rate actually fell from 3.79 percent to 3.63 percent.

Thirty-day delinquencies have historically been a leading indicator of serious delinquencies and foreclosures, Brinkmann said.

“[This] gives us growing confidence that the size of the problem now is about as bad as it will get,” he said.

Source: Mortgage Bankers Association(02/19/2010)/RM