Some great news...On August 1st, Congress introduced H.R. 6694, a bill which would reauthorize and reform charitable down payment assistance.  The bill would remedy a harmful provision in the new housing law which limits homeownership opportunities for low and middle-income Americans and was sponsored by U.S. Reps Al Green (D-TX), Gary Miller (R-CA), Maxine Waters (D-CA), and Christopher Shays (R-CT).  The bill seeks to ensure that providers of the down payment assistance operate in a transparent manner to guard against conflicts of interest.  The bill also includes language to ensure that FHA maintains its financial stability by permanently authorizing the Secretary to assess higher premiums to higher risk borrowers.   Let your elected officials in Congress know that you support H.R. 6694 by contacting the U.S. Capitol Switchboard at 202.224.3121 OR learn more at....www.supporthomeownership.com 

I had some questions about mobile home financing this week so thought I'd share some information.   We only do FHA insured loans on mobile homes now...I'm sure there are still some conventional programs out there but the rates are probably pretty outrageous.    Here are the basic guidelines for an FHA loan on a mobile home:   -Mobile home must be a double wide built after 1986 -It must be permanently affixed to the ground and on under 10 acres  -There must be an Engineer's report, Well water test(if not on city water) and Septic Inspection done.  These may be paid by the borrower or the seller but must be done and meet FHA guidelines for FHA approval which means they must be done first. 

Wow, the DOW is down almost 400 points as I write.  Also, the unemployment rate came in higher than anticipated-the largest increase in 22 years!  Will these factors impact mortgage rates for the better?  I have to say that I am hoping they do as I'm sure you are, too.  It really is awful that, we as loan officers, get excited at the expense of others.  It's not direct though-it's not like we're wishing the stock market would take a dive or for Tom, Dick, Harry and Sue to get fired.  It's just basically a numbers game.  If rates decrease we can lock loans and make our borrowers happier and hopefully, our pool of buyers will increase, too.

I am writing this week to remind you that the FHA also does condo loans.  Advertising that your condo listing is FHA Approved is a terrific selling point-especially in the current mortgage market.  If you have a condo listing and aren't sure if it is FHA Approved, you can go on the HUD website at http://www.hud.gov/ or BETTER yet call me and I'll look it up for you.    Conversely,if your buyer is looking for a condo, do them a favor and find out if the ones they are looking at are FHA Approved.  Since the mortgage meltdown, fewer buyers have the ability to gain loan approval with the constant reduction of loan products available so remember FHA is a super option.  FHA loans are a lot less costly and FHA loans are no longer difficult!

One of the greatest reasons for choosing an FHA loan is because the allowed seller contributions are increased from 3% to a whopping 6%!   Here's an example:  The house the borrower is interested in is listed and valued at $100,000.You might be thinking about making an offer for the property in the amount of $94,000 since it is common practice to bid under the list price. But instead of placing that lower bid you might want to accept the list price as is on the condition the seller pay 6% of the value toward your closing costs. So now closing costs are covered and the seller is still getting the same amount of money they thought they would be in the first place.  

This method also works if you have good reason to believe the property is valued  higher then the sales price. In the case the seller will not accept any amount below $100,000 and you have very good reason to believe the property is valued at $106,000 or more you can add that 6% to the top of the loan which means a loan in the amount of $106,000.  Keep in mind the sales price must now be increased to $106,000 and now include a seller concession of $6,000 and the end result is the same for the seller.

Back in May of 2006, the IRS adopted a position that non-profit programs should not participate in down payment assistance programs.  Then in May of this year, HUD proposed a rule that, basically, would end all down payment assistance gift programs.   However, this week the judge awarded an injunction which will prohibit HUD from facilitating the final rule until either the later of February 29th or a decision in this case against HUD is made.  This means that DPA programs can still be used in purchasing contracts if done on or before February 28th or the date that the case against HUD is settled.  We do lots of FHA loans and often have borrowers who need assistance with the 3% required down payment so we are very happy to hear this!

My office has been in business for 14 years doing all types of loans but has had it's greatest success in doing FHA loans.  We use and have used an FHA loan everytime we can instead of sub-prime and this is more important now than ever.  As you may know, FHA loans are not solely credit-score driven but are based on the "whole picture" of the borrower(s).  The running joke in our office is that we are GLAD to see a mid-FICO in the middle 500's because so often we are helping folks with mid-FICO's between 499-550.  We use down payment gift programs and can roll the down payment, closing costs and prepaids into the loan for those folks that need to come to the table with little to nothing.