What does it mean if the NFIP is not authorized and Section 502 loans (USDA RD) are not funded by Congress? All of you should have received an email from the NAR about Section 502 and NFIP and how Congress left it unattended before breaking for the Memorial Day stretch. Included in that email is a link to voice your opinion with your Senators and Representative.
To give an idea of the numbers of home purchases which are affected nationally by the failure to re-fund Section 502 take a look at this report at Fannie Mae. Note the use of 502 has doubled every year for the last 2 years. During the sub-prime days these loans were largely overlooked but with the collapse of the sub-prime industry they have become a mainstay.
Section 502 allows home buyers to purchase homes in designated rural areas with no down payment. They still must pass stringent qualifications with income, assets and property value but for the purchase of the property itself there is no down payment requirement. These loans are highly attractive to lenders due to (a) their relatively low default rate and (b) the loan is guaranteed against default. As with most other loans today Fannie Mae is the largest purchaser of these loan products.
Many areas in north Cherokee and east Bartow are eligible for Section 502. As you already know these areas are facing their own forms of recession and employment challenges and stalling the sales of existing and new homes because Congress simply placed funding of this program on a back sheet is unacceptable. Every home sold not only means a benefit to the seller and buyer but to the community at large including insurance agents, loan officers, underwriters, movers, local retail shops (curtains, rugs, furnishings, tools), real estate agents and brokers, closing coordinators, movers, appraisers, attorneys, title agents ... need I continue?
Congressional failure to make the authorization of the NFIP could not have come at a worse time. Flooding in the southeast and now the west with Georgia, Nashville, Arkansas and now Oklahoma being hit with some of the worst flooding in decades if not centuries awareness of the need for flood insurance is at an all time high. Furthermore due to these widened flood areas there are re-designation of formerly "safe" zones into designated flood areas meaning thousands of homes which did not require flood insurance now do. Areas in Cobb, Fulton, Paulding, just to name a few locally, are now being resurveyed and designated as or considered to be designated as flood zones. (FEMA flood map search)
According to reports from the National Flood Insurance Program (NFIP) as of September 2007 there were 80,870 homes participating in the program. That same year there were only 82 claims. Those are the most recent statistics and we already know there were thousands of claims in fall of 2009 when the massive flooding hit the metro Atlanta area as well as other areas of Georgia. One only need use a little estimation to determine how many deals are not closing or are slow in closing due to non-authorization of the NFIP.
Please follow the REALTOR Call To Action and contact your Senators and Representative today to make sure our voices are heard and they make this a hot priority. What we do not need right now for the sake of our customers (buyers and seller alike) is anything else to unnecessarily stall an already weakened housing market. Use this link and please forward it to your friends. Also feel free to telephone your Senators and Representative and share your concerns.
There is an unedited video on YouTube I recorded about this which may help give some leverage to the numbers which are echoed herein.
Ken Cook - Web coder (I write the programs that make the whole world zing!) (678) 439-8683 Anything your mind can conceive I can create - online that is!
Social Media Edge Radio - seriously true professionals who won't misguide you with some crap they made up to sell more books and seminars. Every Tuesday at Noon eastern.
RETSORadio - part of the RETSO family. Great tech information and updates from people who have the answers, people who speak and product and service users.
NOTICE: I have been writing in this blog since July 2006. Some of the older articles may contain information that has changed. Please check the date and phone me if you have any questions.
Boy, there are quick to pass some pork or increase taxes... or crap and trade... but they can't do things like this and let them fall between the cracks.
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