BYE BYE 8k credit for down payment

This is an article Posted by Rona Fischman

Remember that promise that Shaun Donovan, HUD Secretary made at the Realtor mid-year meeting on Monday? The one about that the $8000 tax credit being made available for down payments? Well, the promise is broken.

I got this notice from NAEBA headquarters this afternoon:

According to contacts with both FHA and HUD, Mortgagee Letter 2009-15, which stated that first-time homebuyers would be allowed to use the tax credit for their downpayment, has been rescinded. On a phone call with FHA, Kim Kahl was told, “The mortgagee letter has been rescinded for the time being.” NAEBA President John Sullivan was told something similar when contacting HUD. Neither FHA nor HUD gave further details.

FHA to allow use of 8000 tax credit

n a move that the NAR has been lobbying for, FHA today announced that it would begin allowing its lenders to let first time home buyers use the $8000 tax credit as a down payment on a home.

HUD Secretary Shaun Donovan made the announcement during his address at the 2009 REALTORS(r) Mid-Year Legislative Meetings and Trade Expo being held in Washington, D.C..

“We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to “monetize” the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly.”

This has enormous implications for the housing market

Los Angeles Neighborhood Stabilization Program (NSP)

The City of Los Angeles Housing Department (LAHD) has started to offer a purchase assistance financing to eligible low- and moderate- income homebuyers seeking to purchase a foreclosed home in a NSP Priority Area in the City of Los Angeles. The first step should be a buyer to get pre-qualified by a Participating Lender (In case you didn’t know I am one of those Participating Lender) Visit my website The city will not allow reservations from non participating lenders. Then hire a Real Estate Agent to help you search for eligible properties. Then just read below for the rest.

How do you qualify for the NSP?
1. The property must be foreclosed
2. Property must be vacant at time of listing
3. The property can be any type of permanent residential dwelling unit, such as detached single family structures, townhouses, condominium units
4. Properties must be appraised by a state certified residential or general appraiser. The appraisal must be done within 60 days of the final offer to purchase.
5. When buying foreclosed homes from lenders or other mortgagees, the purchase price must be at a discount from the appraised value. HUD requires that the home buyer must seek the “maximum reasonable discount” from the seller. The minimum discount is 5% for each NSP property.
6. Properties must be located within an NSP Priority Area of the City of Los Angeles. Please visit the Los Angeles Housing Department’s (LAHD)
website atto view maps of the NSP Priority Areas and to determine whether the house is in an eligible area.
7. Households whose incomes are at or below 120% of area median income are eligible for this program. The following chart shows the maximum income limits.

2009 Maximum Income Limits for NSP

8. Home buyers must not presently have an ownership interest in any real property.
9. Home buyers must attend and complete an eight (8) hour Homebuyer Education Class certified by HUD that is taught by one of LAHD’s approved home buyer education providers. (see the end of the blog)
10. Home buyers must occupy the property as their primary residence.
11. At its own expense, LAHD will inspect every property to be purchased under this program and determine if rehabilitation repairs are required. If repairs are required, LAHD can provide a loan up to $50,000 for those repairs. Homes requiring rehabilitation that is estimated to cost more than $50,000 are not eligible.

Side Note
LAHD APPROVED HOMEBUYER EDUCATION PROVIDERS
All Applicants applying for the LAHD Purchase Assistance Programs are
required to attend an eight (8) hour homebuyer education course given by an
LAHD Approved Homebuyer Education Provider.
ACORN
2010 Wilshire Blvd., Suite 604
Los Angeles, Ca 90057
(213) 484-1475
Languages: English and Spanish
Website: www.acornhousing.org

Korean Churches for Community
Development (KCCD)
3550 Wilshire Blvd., Suite 922
Los Angeles, Ca 90010
(213) 955-1500
Languages: English and Korean
Website: www.kccd3300.org

New Economics for Women (NEW)
303 South Loma Drive
Los Angeles, Ca 90017
(213) 483-2060 ext. 106
Languages: English and Spanish

East LA Community Corporation (ELACC)
530 South Boyle Avenue
Los Angeles, Ca 90033
(323) 269-4214
Languages: English and Spanish
Website: www.elacc.org

LA Neighborhood Housing Services (LANHS)
3926 Wilshire Blvd., Suite 200
Los Angeles, Ca 90010
(213) 381-2862
Languages: English and Spanish
Website: www.lanhs.org

Shalom Center
2975 Wilshire Blvd., Suite 415
Los Angeles, Ca 90010
(213) 380-3700
Languages: English and Korean
Website: www.shalomcenter.net
Website: www.neweconomicsforwomen.org

West Angeles Comm. Dev. Corp. (WACDC)
6028 Crenshaw Blvd.
Los Angeles, CA 90043
(323) 751-3440 ext. 29
Languages: English
Website: www.westangelescdc.org

Mortgage Rates Reviewed

The Mortgage rates rallied today as Mortgage Backed Securities (MBS) saw a strong demand and reprices for the better were seen. I would have to say rates will open better than today, but it is a volatile time and can see a reversal fairly quickly. The rates were seen at about 4.5 with a little over a point and 4.875 seen with 0 points.

We are close to all time high so there is hope, but no promises. Contact me to keep up daily

Mortgage Backed Securities

Home Valuation Code of Conduct (HVCC)

Starting May 1,2009 the mortgage landscape will change. This is for loans sold to Fannie Mae and Freddie Mac not FHA. The new Home Valuation Code of Conduct (HVCC) will be enforced. Effective May 1, appraisals must be ordered by “the lender or any third party specifically authorized by the lender including but not limited to appraisal companies, Appraisal Management Companies AMC and correspondent lenders.” In general, state-licensed appraisers will work for these independent appraisal companies or correspondent lenders, which in turn will manage all aspects of the appraisal process. That is, order the appraisals, co-ordinate the appraisal inspections of the homes, collect for the appraisals, deliver the appraisals to the lender and pay the appraisers.

For this work, the AMC will extract a fee, which will ultimately have to be passed on to the consumer. The HVCC explicitly prohibits mortgage brokers and real estate agents from ordering appraisals. Lending institutions which include banks and mortgage bankers will be able to create their own independent appraisal companies or AMCs and put someone other than a loan originator or anyone paid on a commission basis in charge of communicating and ordering the appraisals.

This new rule will put both the consumer and loan officers against the wall. This is will cause a delay and with no real way to know a range of value before the appraiser going out there. Over regulation has taken hold and will hurt consumer in the long run.

Is Your Condo Not FHA approved?

Hi All,
If you can not find your condo on FHA website to see if it is approved then these are the conditions to get a spot approval or contact me to help you out Juan Cepeda on the web

CHECKLIST
FHA SPOT APPROVAL
ON A CONDOMINIUM PROJECT

This is the required documentation to review a condominium project for FHA “spot” approval. Packages will not be reviewed until ALL documentation is received:

□ Copy of legal description (must be owned fee simple and provide for an undivided ownership of common areas by unit owners)
□ Copy of all CCRs – (cannot contain any rights of first refusal or restrictive covenants)
□ Homeowner’s Association letter – must state
- How long the Homeowner’s Association has controlled the common areas (minimum for approval is one year)
- If there any special assessments pending
(none allowed)
- Year completed (both project and Master Association) and if project is subject to any additional phasing or annexation
(must be complete & not subject to additional phasing)
- Any pending legal action against the association, or it’s officers or directors
(none allowed)
- Number of units in the building and number of units sold
(90% must be sold)
- Number of units owner occupied
(51% minimum)

□ Print out from title company showing owner’s name, address (both physical and mailing) (to verify both 51% owner occupancy and to verify no single entity owns more than 10% of the total units in the project AND
□ Copies of 1st page ONLY of all deeds of trust in the project (to verify no more than 10% of the total units are encumbered by FHA insured mortgages in projects over 30 units; to verify no more than 20% of the total units are encumbered by FHA insured mortgages in projects of 30 units or less)
□ Copy of master insurance policy (project must have appropriate hazard, liability, and flood insurance (if applicable)
□ Copy of annual reserve study (there must be a reserve plan and a reserve fund, separate from the operating account, that is adequate to prevent deferred maintenance)

New FHA FICO HIT Coming

There is some speculation that in the very near future, investors will begin to apply fico-based adjustments to FHA pricing. If you have transactions going with lower scores (below 660) I would advise locking them in soon to avoid these hits. If you have clients that have credit scores below 660 be aware they will not get the best pricing on the market.