This is a great blog post of new laws in California that affect real estate.  If you have any questions, I suggest you speak to Ralph Gorgolione.

The California Housing Finance Agency (CalHFA) is making it easier for California''s first time home buyer’s to qualify for the CHDAP 3% down payment or closing cost assistance program for the Inland Empire residents, which covers Riverside and San Bernardino County.  CalHFA reduced the buyers minimum financial contribution to just 1%! On a home purchase of $200,000, the home buyer only needs to contribute $2,000 of their own funds!

Do you qualify?  Lets find out with this checklist what is required.

What is CHDAP: The CHDAP is a 3.25% deferred payment junior/2nd loan up to 3% of the purchase price.  This 3% can be used to pay your down payment or closing costs.  Yes, California will actually loan you money and not require you make a monthly payment.…it’s almost like a grant in this aspect.  Crazy huh?  CHDAP stands for California Housing Downpayment Assistance Program.

Where is it Available: The CalHFA CHDAP 3% down payment assistance program is available for all counties in California.  This includes cities of Temecula, Murrieta, Menifee, Winchester, French Valley, Corona, Riverside, Lake Elsinore, Canyon Lake, Sun City, Moreno Valley, Chino, Chino hills, Norco, Ontario, Rancho Cucamonga, Fontana, and all cities in California.

Who is Eligible: First time home buyers purchasing a primary residence.  If you haven’t owned a home in the last three years, you qualify.  This means if you had a foreclosure or short sale, you may qualify after your three year waiting period.  This requirement is waived if you are a qualified Veteran or the property is located in a designated target area.

Home Buyer Education: Completing a home buyer education class is required for each borrower.  This can often be done online and is easy.

Property Eligibility: Single family one unit residences only.  Manufactured housing is not allowed.  Condominium’s are allowed but extremely difficult right now to get qualified…..call me for reasons why.

Income Limits: Since the purpose of this program is to help first time buyers in the low to moderate income range, if you make too much you do not qualify.  The limits are determined by county and the number of people living in the home.

• Riverside & San Bernardino County: Range is from $54,600 to $102,950 depending on number of people in the house.
• Orange County: Range is from $73,250 to $138,150 depending on number of people in the house.
• Los Angeles County: Range is from $52,900 to $99,800 depending on number of people in the house.
• San Diego County: Range is from $63,400 to $119,600 depending on number of people in the house.
• Don’t see your county?  Call me.

Sales Price Limits: The maximum sales price can vary depending if the home is an existing resale home or new construction and if the home is in a targeted or non-targeted area.  I know, can they make it more confusing?

• Riverside & San Bernardino County: Max sales price in non-targeted area is $450,000 and $550,000 in a targeted area
• Orange County: Max sales price in non-targeted area is $656,775 and $802,725 in a targeted area
• Los Angeles County: Max sales price in non-targeted area is $656,775 and $802,725 in a targeted area
• San Diego County: Max sales price in non-targeted area is $627,750 and $767,250 in a targeted area

Frequently Asked Questions

Question #1: Do I have to live in the home for a certain number of years or is there a penalty if I sell in 3-5 years like so many other down payment assistance programs have? Answer: nope.

Question #2: Is the 3% CHDAP junior deferred payment loan forgiven at any point?  Answer: Nope.  Payment is due when mortgage is paid off, home sold, or title transferred.

Question #3: Are funds available for the CHDAP down payment assistance program?  Answer: Yes.  About $48 million left.

Question #4: What kind of loan is best used for the first loan?  Answer: Depends.  We need to discuss your situation to determine the best option for you.

Question #5: Does loan approval take longer for this program  Answer: Not really.  Review time by CalHFA is 3-5 days.  If we receive all your pre-approval documentation on time and in order, we can still close in 30.

Question #5: Are non-occupant co-borrowers allowed when using down payment assistance?  Answer: Nope, CalHFA won’t allow it, but I may have other down payment assistance programs that will.

Question #6: Is there a limit to how much the seller can contribute to paying closing costs?  Answer: yes, 3%….it’s a CalHFA rule.  Traditional FHA first loans allow up to 6%.

If you have a question about this or would like to get approved, please call me at (951) 215-6119 or email me at brad(at)homeloanartist.com. I’m here to help.

Inland Empire California Home buyers who were frantically making offers on homes this spring, but missed the $8,000 federal home buyer tax credit deadline on April 30, may be happy they did miss it.

Why? Because if they are still in the market to purchase a home, they could end up saving much more than $8,000 they received from the government.

How is that possible? Two reasons.

1. Interest rates have dropped about .5% since the first quarter of 2010.  Assuming home prices are the same, on a $200,000 loan with a .5% lower rate, a homeowner would save about $21,544.  That’s $13,544 more they would save by waiting to purchase now after the tax credit.  Ok ok, no one keeps one loan for 30 years.  If they just keep the loan for a more reasonable 12 years, they would have broken even.

2. The second reason is that home prices seem to have dropped, or at least stayed the same due to so many fewer buyers making offers.  If home prices haven’t dropped, then there seems to be more credits being offered by the sellers and/or builders to attract buyers.  I know for a fact that most homes are no longer receiving 20-30 offers with-in the first several days of being on the market for sale.  Homes that were not offering seller credits are now starting to concede 3% (or more) to the buyers closing costs.  This could be an additional $5,000 to $$8,000 savings buyer may see due to waiting to purchase after the tax credit.

Moral of the story? I was thinking of several buyers who gave up on home ownership because they didn’t get an offer accepted prior to the $8,000 federal tax credit.  They acted as if the world was coming to an end because of an opportunity that was perceived as being one you can’t miss.  Just because you think you are missing out on an opportunity doesn’t always mean something better isn't right around the corner.  The saying ‘when one door closes, another door opens’ is very applicable in this situation.

So now what? Interest rates are low, some homes are dropping in value, or at least staying stable, and the odds of negotiating a seller credit may be even greater.  If you want to own your own home, this seems to be an even better time to buy then when the government was paying people $8,000!  So take action now and be thankful you missed the tax credit.  Opportunity may be knocking again and the door may be even bigger this time.  So call and get re-approved for an FHA .5% down payment loan (not 3.5%) or our 100% financing purchase program.  Call Brad Yzermans (951) 215-6119.

 

Another Article you may be interested in reading: What is the Biggest Benefit or Reason for Buying  Home?

Few people in California realize that members of the Military's Armed Forces, Foreign Service, and Intelligence community are granted an extension through April 30, 2011 to qualify for the $8,000 first time home buyer tax credit as well as the $6,500 tax credit for repeat or ‘move up' buyers tax credit.  Qualified service members must fully execute a binding purchase contract in California's Inland Empire of Riverside and San Bernardino counties, San Diego, Orange County, or Los Angeles County, by April 30, 2011, and have until June 30, 2010 to close their transaction.

I'll admit it, I don't always agree with our current administrations policies, but President Obama did the right thing by extending this tax credit for our countries military personnel who served overseas and were unable to take advantage of this great opportunity.  I'd actually like to see it extended even further for our military if possible.

Who Qualifies?

Qualified Service Members are members of the uniformed services of the U.S. Military, a member of the Foreign Service, or an employee of the intelligence community.  Qualified service members are those who were on orders for extended duty outside the United States for at least 90 days during period of December 31, 2008 and May 1, 2010.  For married service members to qualify, their 90 day service must have taken place in 2009.

There is also an exemption for those who were forced to return to the U.S. for medical reasons before completing their assignment of at least 90 days.

The government has also waived the three year recapture feature for qualified service members if they have to sell their home due to receiving government orders for extended duty service.

Combine this with a California no down payment 100% VA home loan that requires no monthly mortgage insurance, our military and armed forces personnel have a great opportunity to own their own home with almost nothing out of pocket if negotiated correctly.

Take Advantage Now: If you would like to learn the details in qualifying for either the $8,000 first time or the $6,500 repeat or ‘move up' home buyer tax credit, or even determine how much of a loan you can qualify using the VA loan benefit, just call me (951) 215-6119, email me brad(at)homeloanartist.com, or visit my primary website Inland Empire Mortgage, Rates & Real Estate. I service mainly the Temecula, Murrieta, Menifee, Lake Elsinore, Corona, Riverside, Canyon Lake, Fallbrook and North County areas but can help buyers all over Southern California secure their home financing.

HUD recently announced that starting October 4th (recently delayed), FHA is reducing the amount to be collected for their Up Front Mortgage Insurance Premium (UFMIP). However, FHA will also increase how much they collect on their Annual Mortgage Insurance Premium (MIP - collected monthly) for California's Inland Empire (Riverside & San Bernardino County) home buyers.

Confused? FHA's insurance is a ‘split' premium type of mortgage insurance designed to protect the lender from loss.  FHA collects some up front (UFMIP) and some on a  monthly (MIP) basis.  Don't confuse this with your fire/hazard type homeowners insurance which is completely different than FHA's mortgage insurance.

So what's the big deal?  How does this impact you?  Why would you care?  To figure this out, we need to compare the proposed changes to the current guidelines.  Below is a table to help compare.  This is based on a $200,000 loan amount with 3.5% down payment @ 5%.  Payments below do not include monthly impounded property taxes or fire/hazard insurance.....not sure what those are?  Then call me.

 

FHA/HUD IS REDUCING BUYING POWER & MAKING HOME OWNERSHIP MORE EXPENSIVE:  As you can see, this change will reduce the buying power for homebuyers in Riverside, Corona, Temecula, Murrieta, Sun City, Menifee, Lake Elsinore, Canyon Lake, and others in Riverside and San Bernardino county's Inland Empire.  The buying power drops because the monthly payments increase and raises the buyers DTI (debt-to-income) ratio, therefore reducing how large of a loan they can qualify for.  This change will require buyers to make more money to qualify for the same home loan if buying after October 4th, 2010.  Frank & Brian from famed Think Big Work Small coroborate this and are calling this an actual Homebuyer Tax....watch this video.   

WHAT IF INTEREST RATES INCREASE?  If you are waiting to buy to see if home prices drop, the odds are that interest rates will increase over time......they can't stay artificially low forever....can they?  A 1% increase in the interest rate would add an additional $127 more per month to the scenario above and reduce a persons buying power even further!  Can you imagine waiting until 2011 to purchase a home and rates go up just 1%?  You would end up paying anywhere from $170 more per month for the exact same loan after october 4th or up to $279 more when HUD/FHA eventually increases the MIP to 1.5%.     

So add this to your multiple reasons to buy a home now rather then waiting.  The cost of waiting is just too risky if you are considering buying a home soon.  If that's not enough reason to buy (or refinance) then read this post and watch this video What is The Biggest Benefit or Reason for Buying  Home.

Thank goodness that even with these changes, the cost of owning a home is still often less then renting.  If you would like to find out how qualify for a home loan, learn what your other loan and down payment options are (100% financing still available), or just want to find out what you need to do to prepare to purchase a home, call me at (951) 215-6119 or email me at brad(at)HomeLoanArtist.com.  I'm here to help.  FHA, VA, USDA Mortgage Expert and Home Loan Artist

Beautiful Condo in Temecula at 40051 Cape Cod Lane for sale that would make for a great home. Located in the highly desired Lake Harveston Community.

If you are thinking of buying a home somewhere in Southern California's Inland Empire, you have probably read about the obvious benefits of being a home owner before (see immediate list below).  I'd like you to consider the ‘other', often unspoken benefit of owning your own home.  I'm suggesting that a home can actually ‘build' a person.  (make sure you watch the #1 song Miranda Lambert video to understand this).

Here are the Four Most Common Reasons or Benefits to Home Ownership:  

• Tax Deductions.  For both state and federal taxes, the interest paid on the mortgage is usually tax deductible....it's a tax shelter.  You can also deduct the property taxes you pay.  Both help reduce your taxable income (keep more of your hard earned money) and enables you to receive a larger refund at tax time.
• Home Appreciation.  Homes have lost 50+% of the appreciation since the 2006 bubble high's.  History shows home values increase about 3% a year when averaged out over time.  Between paying the loan balance down and the appreciation in value, you are creating a tangible retirement fund.....in the form of equity.  Equity is the difference of what you owe on the home and what it's value is.  This equity can be leveraged to purchase investment properties in the future and increase your overall net worth and create additional monthly cash flow from renting out properties.
• Payment Stability.  Renters have no idea how much their rent will increase from year to year.  A homeowner with a 30 year fixed has peace of mind knowing that their payment won't change for 30 years.  This is a way to help protect yourself from the impact of inflation and makes your dollar go further.
• Freedom or Pride of Ownership.  You get to decorate and design your home to match your taste.  No loud neighbors to deal with....or play your own music louder than you can in an apartment or condo.  You also have a backyard for your pets, a place for your kids to play, or a place to plant a garden.

For most people, the payment on a home mortgage is often the same or sometimes less then what they pay in rent!!  Home affordability in California is at an all time high. 

In my opinion, the most important reason for owning a home is best said in this song by Miranda Lambert, "The House That Built Me".  It talks about the memories a home brought to this singer as a child.  I often see people cry when they sell their home...even when moving and buying a nicer home, so I know that owning a home plays a significant role in a persons life.

 

I was fortunate to have grown up in the same house (in MN) from the time I was 3 to when I moved out on my own after college.  Looking back at the photo's phto's of my chldhod, growing up with my sister, I realized most of them involve our home and neighborhood.  In fact, I'm still friends with many of the neighborhood kids I grew up with playing baseball, hockey, and basketball in the street......as well as kick the can into the late evenings.  Many experts claim that a stable home is required for a child to blossom into a confident, secure, respectful, and loving adult.  This refers to the actual family life as well as the physical home.  If you are unsure about this, just ask a person who's dad grew up in the army and moved multiple times how much that impacted their adolescence.     

I am so thankful for the stability my parents brought to my childhood (thanks Mom & Dad).  A home can act as a refuge from the negative forces of this world, helps shape a childs life, and helps them succeed later in life.

Life is short, we only grow up once, and owning your own has all kinds of financial benefits, but the memories that an actual home can provide is worth more than all the money in the world.  I believe we owe it to our kids to provide this kind of stability in their lives....and create memories that will last a lifetime.  

If you would like your kids to experience stability in their life by owning your own home and create lasting memories, I encourange you to find out what it takes to qualify for a home loan.  If you need to improve your credit score, then call me for some direction or advice.  I'm here to help.  Brad Yzermans (951-215-6119) or visit www.HomeLoanArtist.com.

P.S. And don't worry, you don't need a down payment! 

Serving the communities of Temecula, Murrieta, Menifee, Wildomar, Canyon Lake, Lake Elsinore, Hemet, Riverside, Moreno Valley, and Corona.....and the entire Inland Empire region.

Tags: Appreciation, California, Home Equity, home loan, Home Ownership