Even with the "declining market" hoop to jump through here in beautiful, sunny Florida, people still need to buy and sell houses. While many are crying "poor me" for the slower market here and the tightening-up on the mortgage restrictions, there actually ARE still some good First-Time Buyer programs specifically for Florida and specifically for Orange County in Florida. MY WAIVER: I am NOT a loan officer, merely a licensed REALTOR(r) in Florida and I have a pretty good knowledge of real estate and only enough knowledge about mortgages to get myself into trouble. I leave mortgage to the mortgage gurus that I work with. :) Keep in mind that if you're BUYING a home in Central Florida and you're getting a Conventional Loan, even if you qualify for 100% financing, you will need 5% DOWN, yep, FIVE PERCENT DOWN of the total purchase price due to the declining market here. OUCH! Some people have 5%, 10%, or even 20% down, which is GREAT--but not everyone does.
However, here's what I've learned re: First Time Buyer Loans in a nutshell, About VA & FHA Loans:
VA LOANS: NOT Everyone Qualifies, Of Course--You Must Be a Veteran and Have Served Our Great Country
A good source for real 100% financing is a VA (Veteran's Administration) loan. The caveat here is--you must be a Veteran. :) Also, VA loans are not just for first-time buyers--you CAN get more than one VA loan, but there are of course restrictions to that and it'll cost you a little bit more with the "funding fee"--think of that as the mortgage insurance, that's rolled into the loan. In Central Florida, you can get a VA loan for up to $417,000 AND, if you use my company's sister company, Watson Mortgage Services, you can go up to $650,000--but you have to have 25% down for the remainder, in that instance. So, you can get a pretty decent house for about $400,000 and 100% financing/no money down OR you can get an even nicer house if you have a little bit of money to put into the transaction and can get a house for up to $650,000. Not a bad deal. Oh, yeah--and you may ask the Seller to pay up to 4% (of the total purchase price of the house) toward the Buyer's closing costs, pre--paid items, and escrowed items. Oh, and the WDO (Wood-Destroying Organism) Report MUST also NOT be paid for by the Buyer; sometimes, though, it's hard to get the Seller to pay for that but the government has rules we must follow.
But Here is What is Quickly Becoming One of My Favorite Loans: FHA--And It's Not Just for First-Time Home Buyers:
So, for the rest of us who are not Veterans or are only Navy brats or ex-Air Force wives and don't have the option of a VA loan, we have the remaining options of: 1) a conventional loan (still a good option, but as of today, you probably need at least 5% down of the total purchase price of the house and not everyone has that money) or 2) an FHA (Federal Housing Administration) loan.
NO, FHA is NOT just for first-time Buyers, either. It's for someone who wishes to purchase a property up to $268,850 in Orange County (or Seminole County, too). Yeah, I know that's such a random, weird number but the government sets the rules and you can buy a fairly decent house (first-time or otherwise) for in the $260,000s, don't you think?
No, FHA is not 100% financing, either; it's actually 97%-ish, with 3% required in the transaction. That 3% can come from either the Buyer, the Seller as a seller "concession," or as "gift" fund from a family member. One of the main things that differentiates a Conventional loan from an FHA loan is what the allowable Seller-paid contributions to the transaction are. Think of that as everything that the government will allow a Seller to help with for the Buyer to get into the house. Conventional typically will only allow the Seller to contribute money/equity up to 3% of the total purchase price of the house to help the Buyer. But with FHA, they will allow up to 6%! Yep, that's TWICE what a Conventional loan will allow. Plus, it gets even better: With some First-Tiime Buyer programs, they will allow a combination of Seller contributions, Seller Gifts, and/or Family Gifts that go over-and-above that 6%ceiling. You just need to have a Seller so committed to selling, that they'll agree to participate in one of those programs.
One of the most misundertood things with both FHA and VA loans, not just the prospective Buyer but the PROPERTY ITSELF must be appropriate for this type of financing. If an agent lists the property as "As-Is" (or, the Seller won't make ANY repairs to the property), then there can probably be NO financing on the property through FHA or VA. So, if your agent is listing your house As-Is or you choose to have it listed in As-Is condition, then you are cutting out a LARGE part of the Buyers for the property. If the property is a single-family house, then it must have all warrantied items in good working condition (appliances, electrical system, plumbing systems, etc.) and the roof must have at least 2-5 years remaining life in it, depending on the loan program. If the property is a townhome-ownership (meaning it has land attached to it), then it's treated as a single family home.
If the property is a condominium ownership (meaning there is no real property/land associated with the transaction), then there are only certain condo communities that will qualify. See this link to check out if your condo complex is in an FHA-approved community or not here: https://entp.hud.gov/idapp/html/condlook.cfm
Well, now that I've got you interested, I'm off to show homes to some customers of mine who are buying a home with an FHA loan and getting $20,000 in Down Payment Assistance through Orange County. With the mortgage rates having dropped again last week, we need them to find THE house this week so we can get it under contract. TTFN! Have a great weekend. If you have any questions, please feel free to call me or visit one of my websites below.
Courtesy of:
Lisa Spalding, Watson Realty Corp.
Cell: 407-267-0304
http://www.winterparkhomefinder.com/
www.fl.living.net/Realtor/1210315
http://www.orlandoareapropertysource.com/
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