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This is a story of a home owner who purchased a home with extensive fire damage.  They brought this 1870's historic home back to life using a FHA 203k Renovation mortgage to complete all the needed repairs and more.  A piece of Kalamazoo, Michigan's history has ben restored!

 

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Great news!  It keeps getting easier and easier to finance manufactured homes.  Here are four possible ways to finance manufactured homes!  The basic programs that will work for manufactured homes are:

  • FHA - 3.5% down
  • FHA 203k Renovation - 3.5% down
  • VA - 0 Down
  • Conventional - 10% down

Some other things that are a little different with manufactured homes:

  • Doublewides only
  • Structural inspection needed
  • Must be on Permanent foundation
  • Affidavit of affixture required

Generally looking for a 630 score or higher, a small savings, good rental history, etc. . . 

Follow This Link For A Flyer

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Great News!

Effective Oct. 1, 2016 HUD homes financed with FHA-insured financing are eligible to be purchased with only $100 down.  This sales incentive is for properties in Michigan and Ohio.  You can get a list of HUD homes for sale in your area at HudHomeStore.com or give me a jingle and I will hook you up with a local Real Estate agent that can get you into the homes.  We can use this program on a standard FHA 203b loan, FHA 203b with a repair escrow, or a FHA 203k Renovation loan.  More information about repair options click here.  Check out the video below for more info!  Visit our marketing library to download a flyer for this program!

 

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The FHA 203k home improvement loan is one option for today's home buyer.  It allows all sorts or repairs and upgrades to be financed into the mortgage.  Best of all it keeps the down payment low.  Many Kalamazoo area home buyers have taken advantage of this program and used it to fix up outdated properties.  We also have a special incentive for buyers looking to do energy star improvements to the home Check it out!

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Great News!

I love saying that because it seems over the last five or six years everything's been, heads up this bad thing is happening.  Not this time, there are two changes that are great news for the housing market.  Conventional 3% down is back & FHA has reduced there monthly mortgage insurance!  Let me explain . . .

First a little history on the way this all went down.  Back middle of December 2014 Fannie Mae announced that they were bringing back the 3% down conventional loan program.  The program had gone away a few years ago during all the tightening.  The new 3% down program has some fairly tight credit qualification, but overall is a great option for first time buyers with a good credit history.  When compared to FHA at the time the mortgage insurance was less in most cases.   Personally I think what happened after the Fannie announcement is FHA did a little math and figured out that they were going to lose the pool of buyers that had good credit. Then the loans they would end up with in their portfolio would be the more troubled loans.   Think 1000's of loans, when your looking at x% go into foreclosure now; losing the strong loans means  x% that go bad is a lot higher.  Not good if your FHA!

So here were are less than a month later and FHA announce a huge reduction in monthly mortgage insurance.  Which means the FHA program is more attractive now to most buyers seeking low down payment options.

Lets look at an example: (note PMI and rates vary based on a number of factors such as credit score, so specific borrower will see slightly different numbers.)

  Conv. Old FHA New FHA
Purchase Price $150,000 $150,000 $150,000
Down Payment $4,500 $5,250 $5,250
Upfront PMI $0 $2,533 $2,533
Monthly PMI $158.84 $161.54 $101.71
PMI Paid After 5 yrs $9,530.40 $12,225.40 $8,635.60

One more thing that should be mentioned.  With the 3% down conventional the interest rate is higher than FHA, how much higher depends on credit and other factors. Expect to see roughly a .5% higher interest rate.  That combined with the higher PMI makes the FHA option rule over a 3% down conventional in most cases.  The one down side to FHA is that the mortgage insurance never goes away.  I'd love to see FHA go back to the days where the MI dropped off when the loan reached a 78% loan to value.  So I suppose buyers who are going to be in the home for many years may be better off with a conventional 3% down loan over FHA.  However most people move every 5 years or so.

Check out the short video I made for more information or give me a call!

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I was going over loan options with a home buyer the other day and realized that we spend a lot of time talking about mortgage insurance and when comparing loan programs for people the cost of the PMI really comes into play.  When I sat down to make this video I was simply going to go over the basic options and the costs associated with each.  The video turned into more of a why not to get a FHA loan, which wasn't my intent.  However, the numbers don't lie FHA is the most expensive loan out there right now.  Its the new "subprime"  funny that the government loan program who's mission statement reads: "HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all . . . " is the most costly of all the home financing options.  Anyways, we close tons of FHA loans and it is often the only option for people wanting to buy now; so enough said.  The chart outlines the basic's reach out to me anytime with questions.

 

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Yeah the shutdown is a big deal for a lot of people and their families, but the houseing market certinaly hasnt come to a screaching hault.  I was headed into work today listening to the radio and all the news about the government shutdown.  We all knew it was possible and by the end of the day yesterday pretty much inevitable.  The congressmen being interview on the radio made it sound like the housing market was going to come to a screeching halt.  Heck you would think that all the Realtors and Loan Officers were going to get a couple weeks off while Uncle Sam figured things out.  Well I got some breaking news, we are all still here, still working away, & most importantly still closing loans!  So what’s the real deal?  What loan programs have been affected by the shutdown?  Here’s the scoop:

  1. Conventional Loans: Unaffected - depending on income basically the IRS will not issue tax return transcripts (Form 4506 T). Typically these are ordered & reviewed prior to closing.  Any loan that has other income (mainly self employeed borrowers) that would be reported on the tax returns will not be able to close until we have the tax transcripts. This includes borrowers trying to do 5 to 10 financed properties as those require IRS tax transcripts to deliver to Fannie Mae. So borrower who recive a w2 we can close no problem.
  2. VA Loans (veterans administration): Unaffected
  3. FHA Loans:  Unaffected   (at least for the foreseeable future, so basically if this thing drags out for months FHA could be affected but it's not very likely)
  4. RD Loans Affected - this ones kind of a big deal.  Since everyone is still working except for the people at RD we can still get the file ready to close.  However, we for we can close the loan RD needs to issue a conditional commitment and the final loan has to be run thru their system.  Currently there is nobody there to review the file and the system (GUS) that we run the loans thru is offline.  So plan for delays on all RD files.  How long is unknown, but for loans here in Michigan if the file isn’t up at RD already it will be at least 30 days from whenever all those government employees go back to work.

So to recap we are still closing and funding all loans with the exception of those rural development loans. 

If you want more info you can read the governments contingency plan here http://www.whitehouse.gov/omb/contingency-plans

 

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Are you a buyer looking to purchase a HUD home or a Realtor looking so sell a HUD Home?  Eaither way, in this video we explain:

  • how to understand the financing options for puchasing HUD homes
  • how to understand www.hudhomestore.com
  • repairs on hud homes
  • bidding on hud homes
  • Low Down Payment Options
  • and so much more!

Print out with more info here

Also check out this video: Appraiser Nailed You With Required Repairs - No Worries!

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Effective April 1st 2013:  FHA borrowers should make sure their lender has the purchase contract and pulls the case number prior to April 1st!

Once again FHA has made moves to bolster capital reserves.  Without getting too mush in to the why, lets just say HUD felt that their reserves may dip too low, so they are jacking up the costs for FHA buyers.  Here's the details:

FHA Takes Steps to Bolster Capital Reserves

On Wednesday, the Federal Housing Administration announced a series of changes to strengthen the Mutual Mortgage Insurance Fund and improve risk management. Most of the changes were outlined last fall in the wake of the FHA Actuarial Report showing the MMI Fund with a negative economic value.  Among the changes, FHA will:
 

  • Increase its annual mortgage insurance premium (MIP) for new mortgages for case numbers assigned on or after April 1:  
    • by 10 bp for all 15-year, and all 30-year less than $625,500 - what this means is on a 150k loan the payment woudl go up $12 per month.
    • adds a new 45 bp annual premium for 15-year loans with LTVs less than 78% (previously, these loans had no annual MIP, now on a 150k loan a borrower would pay $56 per month)
  • Require most FHA borrowers to continue paying annual premiums for the life of the loan, effective for case numbers assigned on or after June 3:
    • loans with LTVs > 90%, MIP will be for the life of the loan
    • loans with LTVs <= 90% MIP will remain in force for 11 years

This is the big change as it means most borrowers will never get out of paying the mortgage insurance which current drops off when the loan reaches a 78% LTV and they have been paying it for 5 years.  Although statistically most borrowers are not in a mortgage more than 5- 7 years with rates at historic lows this time frame is expected to increase.  On a 150k loan a borrower would pay $168 per month for mortgage insurance the entire life of the loan.

Additionally FHA will require lenders to manually underwrite loans for borrowers who have a decision credit score below 620 AND a total debt-to-income (DTI) ratio greater than 43 percent; effective for case numbers issued on or after April 1.  Lenders will be required to document compensating factors that support the underwriting decision to approve loans where these parameters are exceeded.

The Bottom Line:  Realtors working with FHA borrowers and buyer obtaining FHA Financing should try to get an accepted offer over to their lender prior to April 1st, 2013  to avoid these increase.  Better yet put 5% down and get a conventional loan to avoid the high mortgage insurance associated with FHA financing!

 

Published in Jeremy's Blog

FHA raises the cost of home ownership AGAIN! Learn about the changes coming 9/7/2010.

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