Many times a required continuing education course will shed light of issues that we all take for granted.

FHA, VA, & Rural Development loans ;are picking up the slack of many of the programs that conventional mortgage companies have stopped offering.

The new minimum requirements starting January 1st will be 3.5% down with FHA loans, the down payment can come in the form of a gift, and closing costs, pre-paid discount points even interest rate buy downs can be picked up by the seller not to exceed 6% of the sales price.

The Va loans offer much the same and can include loans of 102% of the appraised value. These loans also feature the ability to assume the loan by the next owner, which may be a great selling feature down the road, if rates go back up, and save the next buyer a bunch of closing costs as well.

Rural Development, as the name implies can only be used in designated areas deemed to be rural. But offer high loan limits and easier restrictions that the old days when income levels were very restrictive and pre-payment penalties made the loans hard to negotiate..or painful at resale.

The biggest difference is the cost of Mortgage insurance, compared to conventional loans.

The government insured programs do require mortgage insurance for these high loan to sales price ratio loans but because these are guaranteed the subsidized loans the monthly mortgage insurance is less than conventional loans.

If you haven't looked into the 203K streamline loans you should.

This loan allows people to finance the purchase price along with improvements for up to 110% of the after improved value. with all the proposed work being completed after the closing. In some cases this type of loan has been used to complete a sale that didn't appraise at the current contract sales price, but with improvements and 110% financing allowed this hurdle to be cleared.

The pie in the sky 4.5% 30 year fixed rate ghost may never materialize (for your buyers / or anyone).

Much discussion was bantered around regarding the leak of news on this phantom rate, being offered. None of the well informed mortgage people I have spoken too can say for sure if it will ever come to pass. And if it does what the terms will be. If for example you can only get it as a first time buyer that kills a lot of potential buyers, if it required 25% down,, credit scores above 720 or extremely low loan limits it will help but a very few. What the FHA, VA & the RD loans provide now is a streamline way to refinance if the rates do get better, they allow seller contributions to buy down interest rates to the lowest level seen in our life time and they do it while  housing is soft and sellers are willing to make contributions. This combination is a prefect storm for buyers.

If you have buyers waiting for a ghost rate, tell them the hard evidence is that current interest rates, housing prices and choice of inventor has never been better than now. Waiting may lose them the current programs, choice of property and sellers motivation may evaporate at the same time.