FHA & VA Home Buyers Have A Golden Opportunity
Consider this; new figures out today on the continued housing market slump making news, yet again, with new construction brining in national number of an 8.5% drop in sales for the first three months of this year and the National Association of Realtors sites a continued lag in March 2008 real estate sales of just under 17% of the March 2007 figures. These numbers are equal to figures we saw over a decade and half ago, back in 1991. Your FOX 10 MLS-Experts have the right answers to help educate sellers about selling in today's real estate market environment. Buyers also need to learn why buying in today’s market is a good idea.
In April 2008, new underwriting guidelines were published to most, if not all, of the major lending investors, such as FlagStar, IndyMac, Provident, Countrywide, BofA, Wells Fargo and the other mortgage lenders, still in business (check out http://www.mortgageimplode.com/ where you can read about 252 mortgage lenders and/or investors that have gone out of business since the middle of 2006)
The major MI (Mortgage Insurance) companies, Genworth, MGIC, RMIC and Radian have all increased limitations on mortgage insurance requirements. The MI parameters are even more restrictive in markets that are characterized as “declining”. Oh yes… and BTW… Maricopa County, Coconino, Yavapai, Gila, Pinal, La Paz, Yuma, Mohave and Pima are all considered to be DECLINING markets.
MORTGAGE INSURANCE IS NOT AVAILABLE FOR THE FOLLOWING:
- Any LTV (Loan To Value) with FICO below 620
- Any LTV above 97%
- All Stated Income Loans LTV’s over 95% with FICO below 680
- Loans with potential negative amortization
- Cash Out Refinances on Investment properties FICO less than 680 on LTV’s over 90% in a declining market
Also in April, the Maricopa County Tax Assessor published his expected value window for properties, across the county. The Assessor is projecting devaluation of as high as 41% in the West Valley with an average devaluation of property values hovering around 15%.
The Temporary Loan Limit Increase for FHA loans, passed by President Bush’s economic recovery act, has altered (only until December 31st 2008) the maximum FHA loan limit from just over $263,000 up to, in Maricopa County, $346,250. According to the Arizona Regional Multiple Listing system, nearly 70% of the homes that sold, and closed, within the past 150 days, sold for under $346,250. Only a micro-fraction of the closed transactions took advantage of the FHA loan platform. Single family residential home existing inventory currently hovers right around 57,000 units. Nearly 65% of that inventory will fit the FHA finance platform.
Even better news! About two or three years ago, FHA/HUD implemented a hybrid of the popular FHA 203(k) financing platform. Today, qualifying buyers and homes can take advantage of what FHA refers to as their FHA 203 “Streamlined (k) loan platform. These types of loans allow a buyer to finance up to $35,000 for minor repairs and upgrades and these repairs and/or upgrades can be completed AFTER the transaction closes.
The use of FHA loans has been dormant since the beginning of this millennium. With lenders tightening lending parameters for conventional loans, the “Govies” FHA and VA loans, are going to be the product of choice, a staple of the lending arena and a necessity.
FHA loans are not, in and of them selves, FICO driven, although many lenders are placing FICO requirements of not less than 620 on borrowers. Again, this FICO requirement is not HUD/FHA driven. It is simply lender’s, and major investors, showing their nervous feelings about lending any money to anyone who cannot demonstrate a somewhat solid credit worthiness.
VA loan limits, for Maricopa County, are currently set at $417,000 and… what most vets don’t know, is that the vet can use their VA loan privileges again and again, once the previous VA loan has been paid off. Additionally, many… if not most… vets don’t know that if they have used their VA loan privilege in the past and still have an active VA loan… if that existing loan has not consumed their entire VA entitlement of $417,000 they can use the balance to purchase a new/additional home with the remaining entitlement.
Please feel free to give us a call at (602) 796-5674 if you have any questions.
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Bye for now,
Lori & “G-II”