NEW LOAN GUIDELINES: YOU BETTER BUY NOW!!!!!!

I have spoken to a couple of my lender partners in regard to the new lending laws as a result of the reform bill just signed by the President.  Everyone is still sorting our all of the effects of this law and how it will ultimately work out.  The new rules kick in October 1, 2008.  However, here are some things we do know:

1. The Nehemiah Program will be eliminated.  Nehemiah allows the seller to contribute the down payment or a portion of it to a charitable group, who in tern contributes it to the buyers for the down payment.  Sellers may still contribute up to 6% for closing cost.
2. The down payment requirements will be raised from 3% to 3.5%. 
3. The FHA Limits will be permanently increased from $362,500.00 to a number based on the Median Home Values in the area.  I do not have the exact % of Median Home Value in front of me, but it is generous.   

 What this means is the buyer will have to come up with their own down payment.  They can still get gift money from friends and family.  I think the concern is that home values are getting inflated so the sellers can make the Nehemiah Contributions.

 By having the buyer come up with their own down payment and by increasing the down payment to 3.5% the buyer has more invested in the property and is less likely to walk away from it. 

 Right now the FHA loan limits are higher than $362,500.00, but a loan over that amount comes at a higher interest rate.  Whether or not we still have the boundary figure will be up to the individual lenders.  I suspect as the market recovers the boundary will disappear or increase. 

 What it means today is if you want to get in a home with a minimum of 3% and try to get a Nehemiah contribution you need to be getting into escrow NOW.  Contact me and I can put you in touch with a quality lender to get you pre-approved and I will find a home that meets you needs in your budget for you.  If you have friends or family that need to buy now have them contact me NOW.  TIME IS SHORT CALL NOW.

Or go to my web site www.AskGene.info

 I will keep you updated on the changes and other options.