Mortgage Discussion for the Panhandle area

It has never been more obvious to me that government loans are the way to not only survive but thrive in a less than perfect market. With the 100% opportunities still available with VA and USDA (Rural Development) these loans are the best choice for those customers that will fit the guidelines. Those that do not, FHA is still the leader in the market. Between SHIPP ( if qualified) and the DAP (Down Payment Assistance Programs such as Nehemiah and Ameridream) plenty of prospective home buyers still have opportunities to buy a home with less than perfect credit and no cash for down payment. Spring is here and Summer is fast approaching. Buyers are looking and with the FHA new limits at $271,050.00 more buying power exist to make 2008 a good year. Here are some quick facts that may help you decide what a customer can buy and how:

FHA

1. Loan limits are $271,050.00
2. Nonoccupying co-borrower can be used for credit, income or assets
3. Less than 580 credit score is considered with good history in the past 12 months
4. 97.75% loan to value loans with SHIPP or DAP helping the downstroke
5. Collections generally do not need to be paid if not affecting title
6. Previous chapter 7 Bankruptcy or foreclosures are OK over 2 years
7. Current chapter 13 bankruptcy is OK with 1 year pay history 
8. Lack of credit or no credit will close as well
9. 1 year self employed borrowers can close if they have a 2 year history in the same field of work
10. Cash to close can come from gift, DAP, SHIPP, sweat equity, even cash kept at home will be considered

VA

1. Over $417,000.00 can be considered
2. Reasonable credit accepted
3. 100% Loans
4. Seller can pay all closing cost + up to 4% of loan for other buyers needs
5. Higher debt loads are always considered
6. No mortgage insurance saving money in monthly payment

USDA

1. Lend off appraised value not purchase price
2. 102% Loan to value
3. Can lend over purchase price for closing cost, pre-paids or other credit needs
4. Less than perfect credit is OK with good past 12 months
5. 620 score credit is approved no questions asked
6. Less than 620 is acceptable with explanations (closed a 535 this week)
7. Must be in USDA area and meet income restrictions
8. No assets needed if no cash at closing
9. No mortgage insurance = lower monthly payments

All 3 have rates hovering around 6% so no subprime here. Hope this helps.

Yes, spring is here and homes are selling. We are closing a good many "no money down" deals as they seem to still be the market place. I was asked by a realtor this week what type of loans I closed and I responded with "A paper; FHA, VA and USDA". Thinking I was somewhat clever I went on to explain we are still finding buyers with little or no money to spare for a large down payment. The realtor asked me how I closed these loans when we have no 100% loans anymore. It was that comment that made me realize I was not so clever. A realtor who knows me is believing in wrong information. We have many ways of closing mortgages with little to no money down by a buyer. V.A. is 100% and still strong. USDA or Rural Development is 100% and stronger than ever. FHA is 97.75% but with down payment assistance a buyer stills have no down payment. The other big help is all these loans are self insured. That means you need not pay attention to the hype about MI (Mortgage Insurance) companies. There is no MI on an "A" loan (FHA, VA, USDA) in fact only FHA has MIP with is an FHA self insurance guaranteed by our government.

Your worst enemy in closing sales today are the media. Between the radio, TV, newspaper and other outlets buyers are scared and do not know they can still buy. It is all of our jobs to educate the public and give them the opportunity of home ownership.

This is huge. The new loan limits came out today officially today and the new maxium loan for our area is now $271,050.00 up from yesterday's limit of $200,150.00. This will open up a new market for homes in the mid $200K range. Also did you know the rates for FHA are lower than those for Fannie at this time? Also the mortgage insurance for FHA is lower as well. There is no reason homes should not be flying off the market.

Other news for the week is HUGE also. You may be aware the "Down Payment Assistance Programs" (Nehemiah, AmeriDream and others) were in a court battle with HUD (Dept. of Housing and Urban Development) to stop them from helping home buyers. That battle is over and the Down Payment Assistance is here to stay. HUD lost the battle and we have these great programs to help potential home buyers who have no money for down payment.

This week gives us GREAT news on two fronts. Sell a home today FHA and use down payment assistance to give your customers the money down. Call me if you want more information.

HIP HIP HOORAY!