Cheryl Powell with Remax Executive Realty- Concord NC- Real Estate Blog

MAJOR Changes Coming to FHA in 2013...The Time to Buy is NOW!

Sun, 07 Apr 2013 12:20:04 -0700

If you’ve been considering buying a home and are waiting for the right time, now is the time to make your move. Interest rates are still at historical lows and prices have started increasing again, so there will likely never be a better time to buy a home or an investment property!

FHA has increased its monthly mortgage insurance premiums several times over the past few years and soon, FHA will be adding tougher mortgage insurance requirements and making other changes to strengthen its finances.

· Effective for FHA case numbers assigned on or after June 3, 2013- FHA will require most borrowers to pay mortgage insurance, based on the unpaid balance, for the life of the loan. Currently, FHA mortgage insurance premiums can be canceled when a homeowner has repaid 22% of the original principal balance, after paying mortgage insurance for a minimum of 60 months. This change will cost buyers many thousands of dollars over the course of a 30 year mortgage.

· In 2013 it also will become more complicated for borrowers with low credit scores and high debt-to-income ratios to get an FHA loan.

There is some good news to announce too. If you’d like to purchase a home now, but don’t have the 3.5% required FHA down payment, there are several down payment assistance programs available. There are also a few 100% (no down payment) programs available. Not all of the programs are for 1st time homebuyers or low income homebuyers either. Contact me anytime to discuss your real estate options.


Cheryl Powell
ABR, SFR, Broker, Realtor
The Powell Team
Remax Executive Realty
Mobile: 704-363-8902
cherylpowellrealtor@earthlink.net

Visit Our Website

USDA Rural Development Loan News - Eligibility Map Changes Postponed Until September 2013

Sun, 07 Apr 2013 11:46:27 -0700

Charlotte area Realtors have been dreading the upcoming changes to USDA Rural Development eligibility maps since it was announced last year. Several areas that have been USDA eligible for many years were slated to become ineligible as of March 27, 2013. These areas included Mooresville, Mount Holly and other popular USDA financing areas. However, we've just been given a reprieve!

March 22, Congress passed the FY13 Continuing Resolution that contained a specific provision extending eligibility for all rural communities that are currently eligible for USDA Guaranteed and Direct Home loans until September 30 of this year. The planned re-drawing of USDA Rural Development loan eligibility lines would be based on the 2010 Census population date. Currently, eligible areas are based on 2000 Census population data.

Rural advocates have proposed H.R. 858, the Rural Housing Preservation Act, which would extend the current boundaries until 2020. I'm hopeful that this will happen, because the recovering real estate market needs all the help it can get!

For more information about USDA Rural Development home loan programs, click the following links to view my previous blog posts on the subject.

USDA Rural Development Home Loans

USDA Rural Development DIRECT Loans - Subsidized Payment Loan Program

Contact me anytime to discuss your real estate needs.


Cheryl Powell
ABR, SFR, Broker, Realtor
The Powell Team
Remax Executive Realty
Mobile: 704-363-8902
cherylpowellrealtor@earthlink.net

Visit Our Website

New Home Loan Waiting Periods After Bankruptcy, Short Sale, Foreclosure or Deed In Lieu of Foreclosure

Mon, 21 Feb 2011 10:24:12 -0800

Have you had a Bankruptcy, Foreclosure, Short Sale or Deed in Lieu of Foreclosure and are wondering how long you have to wait before you can obtain a new home loan? Here are the guidelines as of Februrary 2011, which I verified with a loan officer friend.

Of course, every rule is made to be broken and under the right circumstances of reestablished credit and an underwriter waiver/exception you may be able to qualify for a new home loan in less time than the general seasoning periods. A seasoning period, in this case, is the mortgage industry term for waiting period.

BANKRUPTCY

♦ Chapter 7- FHA & VA require two years seasoning. Conventional loans now require four years seasoning. If the bankruptcy has been discharged at least one year and less than two years, it is possible to obtain an FHA or VA mortgage. It must be documented that the bankruptcy was due to an extenuating circumstance. For example a loss of job, acts of nature, medical emergencies, etc. USDA Rural Development generally requires three years seasoning after discharge, but may make an exception before that with reestablished credit and an underwriter "waiver".

♦ Chapter 13- This type of filing indicates an effort to pay creditors. FHA and VA will allow borrowers to purchase a home after one year from the date of discharge if the payments have been made on time and their payment performance has been satisfactory. Conventional loans require 2 years from discharge date of 4 years from dismissal date. USDA Rural Development generally requires three years seasoning after dismissal, but may make an exception before that with reestablished credit and an underwriter "waiver".

SHORT SALES

♦ Conventional and VA loans require two years minimum seasoning on a short sale.

♦ FHA will allow borrowers to obtain a new mortgage after a short sale if: The borrower was current on their mortgage and other debts at the time of the short sale and proceeds from the short sale serve as payment in full.

♦ FHA will not allow borrowers to obtain a new mortgage after a short sale if: The borrower is taking advantage of a declining market or are purchasing a similar or superior property at a reduced price within commuting distance.

♦ USDA Rural Development generally requires three years seasoning after discharge, but may make an exception before that with reestablished credit and an underwriter "waiver".

FORECLOSURE or DEED IN LIEU OF FORECLOSURE

♦ FHA requires three years seasoning on a borrower with a previous foreclosure or deed -in-lieu of foreclosure. If extenuating circumstances can be documented exceptions can be granted.

♦ Conventional loans now require a seven year time period from completion date.

♦VA loans require a two year seasoning period before acquiring a new VA loan. If the foreclosure was on a VA loan then the applicant may not have full entitlement available for the new loan.

♦ USDA Rural Development generally requires three years seasoning after discharge, but may make an exception before that with reestablished credit and an underwriter "waiver".

Contact me anytime if I can help in any way. I'd love to help you find your new home!

Concord NC $5,000 Downpayment Assistance Program

Sun, 20 Feb 2011 00:28:26 -0800

This Down Payment Assistance Program is provided through the City of Concord's Business and Neighborhood Services Division, which receives HOME Investment Partnership Funds, allocated annually through the Department of Housing and Urban Development (HUD).

Home buyers can receive a depreciating loan of up to $5,000 to put towards their down payment, prepaids, or closing costs. Applicants of this program must be a first-time homebuyer and have annual incomes that do not exceed eighty-percent (80%) of the median income of the area. If you haven't owned a home in the past 3 years, you are considered a 1st time home buyer for the purposes of this program... displaced homemakers and single parents are also included. Applicants must attend an 8-hour homebuyer education workshop at Prosperity Unlimited, Inc prior to the closing date. The home must be located within Concord City Limits.

The maximum assistance available is $5,000, and is in the form of a five-year depreciating loan. The loan will depreciate 20% per year for the next five years, at which time the loan will be considered paid in full. Buyer must occupy dwelling as the primary residence for at least five years, as to maintain the affordability requirements set forth by the U.S. Department of Housing and Urban Development. The sale of the property during the affordability period triggers repayment of the direct HOME subsidy that the buyer received when he/she originally purchased the home.

Contact me anytime for more information about this program and other downpayment assistance programs for buyers in Concord NC and surrounding areas.

FHLB Grant for NC 1st Time Homebuyers Down Payment Assistance

Sat, 29 Jan 2011 00:11:01 -0800

Many people haven't heard of the FHLB (Federal Home Loan Bank) grant program for 1st time home buyers in North Carolina, so I thought I'd share information about this great program. Similar programs may be available in other states.

This program is only available through member banks of the Federal Home Loan Bank (FHLB) system. The only participating NC banks that I am aware of are RBC Bank and Monarch Mortgage. As of today, both of these lenders have their 2011 funding for this program. I know loan officers with both of these lenders, so let me know if you need a good loan officer to contact.

It is my understanding that as of today, 2/21/2011, $7500 is available to 1st time home buyers. This funds can be used for down payment assistance, interest rate buydown, and/or principal reduction. There is a maximum total household income of 80% of the Area Median Income, so check with your loan officer for the exact maximum income limits for the area you plan to purchase your home. The grant is initially set up as a 0% interest 2nd mortgage, but it is forgiven at 20% per year that the homeowner lives in the property and is completely forgiven after 5 years!

I'd love to help you find your new home in the Concord and Greater Charlotte NC Area, so give me a call if I can be of assistance in any way.

UPDATE (1/26/2012): The 2012 FHLB Grant Program offers up to $5,000, instead of the previous maximum of $7,500. Qualifying buyers would receive 4 times the amount they put into the transaction from the FHLB Grant Program, for a maximum of $5,000 assistance with $1,250 buyer funds in the transaction.

UPDATE (4/12/2013): The 2013 FHLB Grant Program is still initially set up as a 0% interest 2nd mortgage, however there has been one significant change. If the home is sold during the first 5 years that the homeowner lives there after purchase, 100% of the down payment assistance will recaptured at closing. The recapture amount is now reduced by 20% per year during years 6 through 10 that the homeowner lives in the home after purchase and is completely forgiven after 10 years.

Also, RBC Bank was acquired by PNC Financial and no longer offers this program. However, SunTrust Mortgage also participates in the FHLB program.

New "Due Diligence" NC Offer to Purchase & Contract- Effective as of 1/1/2011

Fri, 28 Jan 2011 23:01:18 -0800

Do you have questions about the new North Carolina "Due Diligence" Offer to Purchase and Contract? If so, you're not alone! The NC Association of Realtors made dramatic changes to the standard NC Offer to Purchase and Contract, which went into effect on January 1, 2011. New terms were added, such as a Due Diligence Fee paid by the buyer DIRECTLY TO THE SELLER, and a Due Diligence Period. Gone are the inpsection period and loan commitment period, both of these items now fall under the Due Diligence Period. This video, created by the NC Association of Realtors General Counsel, may clear up some of the confusion.

Changes to Offer to Purchase & Contract as of January 1, 2011 from NC Association of REALTORS on Vimeo.

I have been trained and have already written/negotiated several offers using the new Offer to Purchase & Contract. So if you are looking for an experienced and knowledgeable Realtor to help you through a NC real estate transaction, give me call anytime.

Short Sale- Avoid Foreclosure

Thu, 06 Jan 2011 14:17:30 -0800

If you are having difficulties paying your mortgage and are considering walking away from your home, you owe it to yourself and your future to consider a short sale instead of letting the bank foreclose.

Contact a Realtor who is a short sale specialist, to explain the process to you and get your home listed when you first start having trouble paying your mortgage. Don't wait until months have gone by and the foreclosure sale is pending.

Check out the following video story of how one homeowner avoided foreclosure and sold their home as a short sale.

If you own a home anywhere in the Charlotte or Concord NC area, I would love to help you avoid foreclosure too. I have earned the National Association of Realtor's (NAR) Short Sale and Foreclosure Resource (SFR) designation and have several years experience successfully closing short sale deals. Contact me anytime!

2009-2010 Homebuyer Tax Credit Extension- First-Time & Repeat Buyers

Fri, 22 Jan 2010 11:09:11 -0800

The Homebuyer Tax Credit has been extended to include home purchases with a contract date by April 30, 2010 that close no later than July 1, 2010. In addition to 1st-time homebuyers, the tax credit has been expanded to include certain repeat homebuyers.

According to media reports, this will be the last extension of the homebuyer tax credit. The tax credit, historically low interest rates and buyer's market home pricing, make this a great time to purchase real estate. Hurry before it's too late!

The information below provides basic information about the current tax credit, call me today for more detailed information.

916 Harbour View Cove - Harbour Towne subdivision - Kannapolis NC

Tue, 19 Jan 2010 10:16:29 -0800

APPROVED Short Sale opportunity to purchase this spacious open floor plan home at $35,000 below tax value!

4 Bedroom
2 Full Baths & 1 Half Bath
More than 2200 heated square feet
Large Great Room with electric fireplace, lots of windows & ceiling fan
Huge Kitchen with lots of cabinets, wide crown molding, window over sink, pantry & breakfast area
Formal Dining Room with crown molding & chair rail can be used as FLEX space to suit your needs
Master Bedroom with walk-in closet, double window & ceiling fan
Master Bath with dual vanity, garden tub & separate shower
Vaulted Bedroom 2 with walk-in closet & ceiling fan
Vaulted Bedroom 4/Bonus with spacious closet & triple window
Large Laundry Room with Washer & Electric Dryer Included
Mostly level cul-de-sac lot with lots of parking space & privacy fenced back yard
Attached 2 car garage
Priced to sell quickly at $139,900
3% buyer closing costs included with full price offer!

MLS#: 907097

For more information on this house or other homes for sale in Cabarrus County and Kannapolis NC,or general information on Kannapolis NC area real estate, call Cheryl Powell with The Powell Team at 704-363-8902 or visit www.ThePowellTeam.net

3036 Rockingham Lane - Southern Chase Subdivision - Concord NC

Sun, 09 Aug 2009 16:39:57 -0700

Open floor plan ranch with covered front porch & lots of upgrades.

3 Bedrooms
2 Full Baths
Built in 2001
Laminate floors in formal Living Room, Great Room, Kitchen & Dining Area
Great Room with wood burning fireplace & recently installed French doors with blinds between glass
Kitchen with GAS range, built in microwave, dishwasher and pantry
Formal Living Room
Master Suite has private bath with garden tub
Newly installed custom patio
This is a Short Sale, priced to sell quickly at $88,000

MLS#: 891296 - SOLD

For more information on this house or other homes for sale in Cabarrus County and Concord NC, or general information about Concord NC area real estate, call Cheryl Powell with The Powell Team at 704-363-8902 or visit www.ThePowellTeam.net

1532 April Knoll Court - Cabarrus Crossing Subdivision - Huntersville (Cabarrus County) NC

Sun, 09 Aug 2009 16:09:06 -0700

Short Sale opportunity to purchase this 4 Bedroom POOL COMMUNITY home at $17,060 below tax value!

4 Bedrooms
2 Full Baths & 1 Half Bath
2" Blinds throughout
Great Room
Kitchen with black appliances, lots of cabinets, pantry & breakfast area
Formal Living Room
Master Suite has walk-in closet & private bath with garden tub & sep shwr
Master Bath with garden tub & separate shower
Attached 2 car garage with door opener and keypad entry
Cul-de-sac lot
Conveniently located off Hwy 73 between I-77 & I-85
Low Cabarrus County Taxes ONLY!
Community POOL and playground
Priced to sell quickly at $145,000
READY TO MOVE IN

MLS#: 891298 - SOLD

For more information on this house or other homes for sale in Cabarrus County and Huntersville NC,or general information on Huntersville NC area real estate, call Cheryl Powell with The Powell Team at 704-363-8902 or visit www.ThePowellTeam.net

2009 First Time Homebuyer's Tax Credit Information- Hurry before it's too late!

Wed, 08 Jul 2009 14:17:51 -0700

If you are a First-Time Home Buyer or haven't owned a home in the previous 36 months, you may be eligible for an $8000 1st Time Home Buyer Tax Credit! You must close on your home purchase by November 30, 2009. Check out the information provided below or contact Cheryl Powell with Remax Gold at 704-363-8902 or cherylpowell@remax.net for more details.

Considering the bargain list prices on many homes, record low interest rates and the $8000 1st-Time Homebuyer Tax Credit... now is one of the best times ever to buy a new home. Hurry before prices increase, interest rates rise and the Tax Credit expires!

8220 Chatham Oaks Drive - Concord NC - Poplar Woods Subdivision

Thu, 18 Jun 2009 00:30:48 -0700

Short Sale opportunity to purchase this spacious open floor plan home located in desirable Concord POOL COMMUNITY, at a great price!

4 Bedroom
2 Full Baths & 1 Half Bath
Full Brick Front
More than 2100 heated square feet
Large 2-Story Great Room with laminate flooring, wood burning fireplace, lots of windows & ceiling fan is open to loft above
Kitchen with pantry, electric range, built-in microwave & dishwasher
Dining Room with laminate floors
Main level Master Bedroom with walk-in closet, ceiling fan and deluxe private bath with dual vanity, garden tub & separate shower
Loft overlooking Great Room with built in shelves, ceiling fan and open railing
HUGE 19' x 19' Bedroom 4/Bonus Room
Main Level Laundry Room
Crawl Space foundation
Split Rail Fenced Back Yard
Attached 2 car garage
Tax value is $210,320
LOW Cabarrus County Taxes ONLY
Priced to sell quickly at $150,000

MLS#: 891753 Off Market

For more information on this house or other homes for sale in Cabarrus County and Concord NC,or general information on Concord NC area real estate, call Cheryl Powell with The Powell Team at 704-363-8902 or visit www.ThePowellTeam.net

311 Valley Brook Lane - Concord NC - Stonebridge Townhome Community

Thu, 18 Jun 2009 00:09:30 -0700

Enjoy carefree living in this lovely townhome located near downtown Concord. Lots of upgrades and ready to move in!

2 Master Bedrooms
2 Full Baths & 1 Half Bath
Great Room with laminate floors, ceiling fan, decorative track lighting, crown molding & French doors leading to patio
Kitchen with upgraded raised panel oak cabinets, raised bar & all black appliances including refrigerator, smooth top range, dishwasher & built-in microwave
Dining Room with laminate flooring, bay window crown molding, chair rail & ceiling fan
Master Suite 1 with walk-in closet, crown molding, ceiling fan & private full bath
Master Suite 2 with ceiling fan & private full bath
Upstairs Laundry with Washer & Electric Dryer Included
Coverered front porch
10'x11' patio
Beautiful location w/trees & creek behind building
1-Car Attached Garage
1 Year Home Warranty Included
Priced at $124,900

MLS#: 891295 - EXPIRED

200 S Rose Avenue - Mill Village - Near NC Research Campus in Kannapolis NC

Wed, 17 Jun 2009 12:39:45 -0700

Bungalow style ranch located in the heart of Mill Village...only .58 miles from the Core Laboratory at the new NC Research Campus.

2 Bedroom
1 Bath
Rocking chair front porch with newly rebuilt floor 5/09
Spacious Living & Dining Rooms w/hardwood floors
Kitchen w/skylight & refrigerator/range included
Hardwood floors in both Bedrooms
New water heater 1/09
Washer & Dryer included
Storage Building
1-Car Carport
Fenced Back Yard
Drastically reduced and now offered at a Short Sale price of $72,900

MLS#: 891297 - WITHDRAWN

For more information on this house or other homes for sale in Cabarrus County and Kannapolis NC, or general information on Kannapolis NC area real estate, call Cheryl Powell with The Powell Team at 704-363-8902 or visit www.ThePowellTeam.net

Thursdays on Main - Under the Oaks at Veterans Park in Kannapolis NC

Fri, 29 May 2009 17:17:29 -0700

Thursdays on Main is a lunchtime music series being held this May and June in Veterans Park - Kannapolis NC. The concert series is FREE to the public and features live music ranging from jazz to classical to big band music. Lunch will be available for purchase from downtown vendors, or you can bring your own.

Veterans Park is located at the corner of Main and E. First Street - Kannapolis. Bring your lawn chairs or blankets and join the fun from 11:30am to 1:00pm!

Music Schedule for the remaining performances:

June 4 The Mark Hoffman Trio Classical

June 11 The Chris Dixon Duo Acoustic/electric guitar

June 18 Southern Junction Country

June 25 Prime Time Community Band Variety of styles

Restaurant Schedule for remaining concerts:

June 4 46

June 11 Village Grill

June 18 DePompa's Comfortable Foods

June 25 Pizza Hut

*Bruster's ice cream will be for sale at every concert

For more information, contact the Kannapolis Parks & Recreation Department at 704-920-4343.

NC Research Campus Farmers Market - Kannapolis NC

Thu, 28 May 2009 20:09:54 -0700

The Farmers Market at the N.C. Research Campus, in Kannapolis North Carolina, opened for its second year on Thursday, May 7. It's a great way to support the local economy by purchasing produce grown within 100 miles of Kannapolis.

Live music is also provided to add to the fun!

Time: 4:00 to 7:00 pm, THURSDAY evenings beginning May 7, 2009 and ending October 29, 2009

Location: Kannapolis, NC - West A Street between the former Cabarrus Bank Building & Transit Damage Furniture

To view and print a flyer with all the details, click the following link: N.C. Research Campus Farmers Market

Mount Pleasant NC - School Information Resources

Mon, 25 May 2009 15:18:40 -0700

If you're considering a move to Mount Pleasant NC and would like more information about the public schools, check out the helpful links below.

Visit the Cabarrus County Board of Education website for important school information for Newcomers to Cabarrus County

Check out the NC School Report Card website to obtain comprehensive information about NC schools, including important information about student achievement, class size, school safety and environment, and teacher quality as well as demographic details about schools and districts.

CLICK HERE to research public, private, and catholic schools and districts across the country.

Garden Tour in Concord NC - Saturday May 30

Sun, 24 May 2009 20:08:53 -0700

On Saturday, May 30^th, downtown Concord will offer a tour of 6 private gardens, plus the one at the historic Forest Hill United Methodist Church. The tour route is 2 miles long, and can be walked or driven. Concord restaurants along the route will be offering samples from their menus to visitors. For more information read the Charlotte Observer article Concord opens its gardens.

Honor Fallen Heroes in Salisbury NC this Memorial Day

Sun, 24 May 2009 19:58:27 -0700

Memorial Day is the time for Americans to remember and give thanks to the men and women who have died while serving our County in the military service. If you live in the Piedmont of North Carolina and are looking for a place to pay tribute this Memorial Day, you may want to visit the Salisbury National Cemetery. This facility serves veterans in a 23 county area of the Central Piedmont Region of North Carolina.

The historic section of Salisbury National Cemetery was established by Confederate authorities to serve as the burial ground for captured Union soldiers incarcerated at the prison in Salisbury, and is located at 202 Government Road in Salisbury.

The Salisbury National Cemetery Annex is located behind the William "Bill" Hefner VA Medical Center at 501 Statesville Boulevard in Salisbury.

Let's not forget to honor all who have served and are currently serving in our Nation's Military Services on this Memorial Day!

$8000 tax credit as downpayment... HUD says program NOT killed!

Thu, 21 May 2009 11:58:03 -0700

According to my lender sources and The Arizona Herald article "HUD says bridge-loan program hasn't been killed", HUD is still moving forward with a plan to let first-time homebuyers use the currently available tax credit of up to $8,000 as collateral for "bridge loans" to cover the down payment on FHA insured mortgages.

According to the article, HUD spokesperson Brian Sullivan stated that the program details haven't been finalized and would not say when the bridge-loan program would be initiated, or whether it would be substantially different from what originally was announced.

Let's all keep our fingers crossed that this program will be approved... it might just be the shot in the arm that the real estate market and our economy needs to recover!

For background information regarding this potential program, read my previous blog post: HUD withdraws option to use $8000 tax credit as down payment... at least for now

US Treasury Department Announces Short Sale Plan

Thu, 21 May 2009 09:41:03 -0700

I recently read an article in the RE/MAX Times (a publication for RE/MAX Agents) regarding The U.S. Treasury Department, who recently unveiled a plan designed to streamline and encourage short sales. Under provisions of the newly created "Foreclosure Alternatives Program," the process will soon include standardized documentation, cash incentives to lenders and moving allowances for homeowners.

Here's a Treasury Department fact sheet about the plan, as well as a release from the National Association of Realtors. You may also want to read The New York Times story, headlined "Lenders More Open to Short Sales".

Many real estate agents avoid short sale listing and buyer transactions, because of the long, frustrating and often unsuccessful process. But, with distressed properties currently accounting for a large segment of US real estate transactions, I think it's time that all agents become more knowledgeable about short sale and foreclosure property transactions.

I've represented buyers and sellers of short sale properties for many years, and l'm very excited about this initiative to streamline the short sale process! If this program succeeds, it will save short sale listing agents a lot of time and help distressed homeowners get out of a bad situation in a more timely manner.

2009 Coca-Cola 600 in Concord this Sunday

Wed, 20 May 2009 10:50:27 -0700

Well, it was bound to happen. Given today's state of the economy, many people are travelling less and spending less on entertainment. An article in The Independent Tribune says that business at The Lowe's Motor Speedway in Concord has been "slower than usual". One vendor says that his business is off by 60%.

If you've been avoiding going to the races because tickets were sold out or you'd prefer not to fight the huge crowds, this may be just your opportunity. The Coca-Cola 600 will be in Concord this Sunday, May 24, 2009 and there are plenty of good seats still available. According to local media, there are also hotel vacancies near the track this race week.

HUD withdraws option to use $8000 tax credit as down payment... at least for now

Tue, 19 May 2009 12:07:37 -0700

There's been a lot of buzz in the real estate and mortgage industries about FHA allowing home buyers to use the $8000 tax credit as a down-payment. However, in this case the government giveth and the government taketh away!

Tuesday May 12, 2009, in an address to several thousand REALTORS® gathered at "The Real Estate Summit: Advancing the U.S. Economy," at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, DC, HUD Secretary Shaun Donovan said that FHA was going to enable home buyers to access the $8,000 tax credit at closing, so the funds can be used as a down payment. This was to be accomplished by allowing FHA's approved lenders to "monetize" the tax credit through short-term bridge loans, which would have allowed eligible home buyers to access the funds immediately at the closing table. FHA/HUD had also posted mortgagee letter 2009-15 (ML 09-15) on their website, which explained the program. CLICK HERE to read NAR's article about the announcement

However, according to several lender sources and information found on-line, later the same day Secretary Donovan's remarks were retracted and FHA/HUD removed the ML 09-15 from their website.

HUD doesn't mention the embarrassing misinformation anywhere on their website, so at least for now it seems that the reason for the program being withdrawn (or at least delayed) will remain unclear!

Here are some links to on-line articles that I found regarding HUD's change of heart...

www.thetruthaboutmortgage.com/fha-may-scrap-homebuyer-tax-credit-for-down-payment/

www.mortgagenewsdaily.com/05182009_first_time_buyer_tax_credit.asp

www.azcentral.com/arizonarepublic/business/articles/2009/05/18/20090518biz-downpayment0519.html

When a Buyer Changes From Conventional Financing to FHA or VA... AFTER CONTRACT

Thu, 14 May 2009 16:32:53 -0700

Recently I became aware of a real estate transaction where the Buyer decided to change from Conventional Financing to VA Financing, after the effective date of the contract. This Buyer didn't ask the Seller to contribute toward their closing costs. The Buyer decided that they wanted to get a VA loan, so their agent sent the FHA/VA Addendum to the Seller's agent requesting the Seller's signatures.

Here's the problem... VA loans prohibit Buyers from paying certain types of fees that are often charged by lenders, escrow companies, settlement agents, and title companies. They are called "non-allowable" fees. They still get charged anyway, but Buyers are "not allowed" to pay them. The result is that the Seller ends up paying them instead and their net proceeds from the sale are reduced. Non-allowable fees can vary by location... in this case the Buyer's non-allowable fees that the Seller is being asked to pay are over $1500!

So, with less than 2 weeks until closing, this deal may be dead. All because the correct financing type and required addendums weren't included with the Offer to Purchase and Contract.

In the State of North Carolina, if the Seller had already agreed to contribute at least $1500 toward the Buyer's Closing Costs, there would be no problem. Because, the NC Offer to Purchase & Contract states "Seller shall pay at closing $______ toward any of Buyer's expenses associated with the purchase of the property, including any FHA/VA lender and inspection costs, that Buyer is not permitted to pay, but excluding any portion disapproved by Buyer's lender.

I ALWAYS explain the additional Seller fees that may be incurred when a potenitial Buyer utilizes an FHA or VA loan, to my Seller Clients, when reviewing the Seller Net Sheet during the listing appointment. In this case the Seller was unaware of the additional fees involved if the Buyer utilized a VA loan!

Obviously, the Buyer in this deal should have determined the type of financing they intended to use BEFORE submitting an Offer to Purchase. But, it is our responsibility as Realtors to educate our Buyer and Seller Clients on such matters during each real estate transaction.

Have you encountered a similar situation? What do you think?