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FHA Changes-Impact on Cary Homes For Sale
David Williams (L) w/ FHA Commissioner David Stevens
Back in December I blogged about possible upcoming changes to FHA loan requirements – well it’s arrived – The FHA recently announced major changes to their requirements for buyers/borrowers. These increased standards could reduce the number of buyers that qualify to purchase Cary Homes For Sale. The changes are aimed at shoring up the FHA’s long term stability – which I think is definitely positive in the big picture/long term - it’s the individual buyers and sellers on a local level, like right here in Cary that will see and feel the impact – anytime the requirements become stricter for securing home loans the available buyer pool is reduced. However one of the major contributors to the recent housing market downturn was buyers purchasing too early or too high. The current FHA commissioner David Stevens is from the real estate industry, having worked on both the mortgage side and brokerage side – I believe he brings a common sense mindset to the FHA restructure.
FHA’s Changes to Borrower Requirements
- The upfront fee charged for the mortgage insurance premium (MIP) will be raised to 2.25%
- The Seller contribution (closing costs etc) is reduced to 3% instead of previous 6%
- To Qualify for a 3.5 % minimum down-payment requires credit score of 580 or higher
- Less than 580 Credit Score will require 10% or more down payment
- Several new lender requirements aimed at protecting the borrower
Like to read detailed FHA policy? FHA Commissioner David Stevens recently wrote an article covering the FHA changes.
Thanks for Reading our Cary Real Estate Blog. Post Authored By: David Williams
David’s a Licensed North Carolina Realtor & The Voice of CaryRealEstate.com
Cary Real Estate Reports: Why FHA Financing Could Become Out of Reach For Many
David Williams (left) & FHA Commissioner David Stevens at National Association of Realtors Convention
It may become more difficult for a home buyer to obtain FHA financing. In Washington there’s pending legislation to increase the requirements for buyers using FHA as the source of their home financing. These new regulations would make it more difficult for buyers to qualify. It’s called the “FHA Taxpayer Protection Act of 2009″. The reasoning behind the new regulations is to shore up the stability of FHA – this in itself is a controversial topic – FHA maintains reserves in the event of borrower defaults – how much should be in those reserve accounts and how they are calculated are often disputed – go figure, right!
Here’s the bottom line of the new proposed FHA Home Loan Requirements:
1) Increase the minimum buyer down payment from 3.5% to 5%
2) Reduce the amount the home seller can contribute as concessions (seller paid closing cost) from 6% down to 3%
3) Raise the minimum credit score requirement
Just a heads up – if you’re planning to purchase a home using FHA, now may be the time – before it becomes more difficult!
Thanks for Reading our Cary Real Estate Blog. Post Authored By: David Williams
David’s a Licensed North Carolina Realtor & The Voice of CaryRealEstate.com
David Williams & Cary Real Estate Attorney Rick Twomey offering class on new RESPA changes
David Williams and local real estate attorney Rick Twomey will be offering a class for Cary area real estate agents on the changes to RESPA (Real Estate Settlement Procedures Act) that go into effect January 1, 2010.
Specifically this class will be covering the new standardized Good Faith Estimate that all lenders will be required to provide home buyers and the new revised HUD-1 closing form.
The changes stem all the way back to round table discussions that HUD conducted in 2005 – the main objective of the changes is providing the consumer with greater clarity and transparency in the cost related to home purchases and home mortgages.
The class will be held December 16th from 10am – 12pm.
Location: Hope Community Church, 821 Buck Jones Rd Raleigh NC 27606
Cost: $20 RSVP to Claire@CaryRealEstate.com
This event is open to all area real estate agents. Read the rest of this entry »
Cary Real Estate Spends a Few Minutes with National Association of Realtors Chief Economist
Last week I had the pleasure of attending the National Association of Realtor’s Convention in San Diego – One of the sessions was led by Dr. Lawrence Yun, Chief Economist for the Association. During the presentation Dr. Yun shared his forecast for the 2010 National Real Estate Market – here are few highlights.
I hesitated to write this post, as I’ve often been quoted as saying that looking at the national real estate news is like listening to a national weather forecast - the national numbers represent averages – what’s truly important to you is understanding your local market. I decided to write the post, mainly to share my takeaway – on a national level the real estate forecast for 2010 is positive news. I concur, on a local level we are seeing an increased number of properties going under contract and closing.
The Tax Credit Stimulus for 1st Time Buyers generated an additional 300,000 – 400,000 buyers – total of 1.5 million frst time home buyers for 2009.
47% of ALL Home Buyers were First Time Home Buyers – This is the Highest percentage in years, usually hovers around 40%
15% Increase in the number of sales transactions – which represents an additional 800,000 sales!
We’ve seen 8 Straight Months of Increase in Number of Pendings (numbers adjusted for seasonal averages)
3-5% Average Appreciation will return
9 Month Current Supply of Homes Priced under $250,000
10 Month Current Supply of Homes Priced $250,000 – $500,000
15 Month Current Supply of Homes Priced Over $500,000
Current National Average Supply of Homes: 8 Months – We hit a low of 4 months supply in January 2005 and hit a high of 12 months average supply – so the numbers are improving.
Helpful Point – a ‘balanced’ market has a 6 month supply of homes – when you have more than 6 months supply it represents a buyers market.
Dr Yun also noted that new home construction starts are now well below average – which could lead to a lack of supply of new homes as the market strengthens.
The continued recovery of the real estate market hinges significantly on home prices stabilizing – should the market see another decline in home values, that would create a ripple effect of ’strategic defaults’ – that is home sellers choosing foreclosure as their home would be valued less than what they owe. We are fortunate in the Cary market area, our foreclosure rates are well below the national average.
National Real Estate Sales Increase & Cary, NC Local Market Improves
Looking for a little good news in the world of real estate? Last week at the Realtor Convention in San Diego, Lawrence Yun (NAR’s Chief Economist), yea can’t help the name drop – it was cool to hear his address in person! – anyway – he reported the number of homes selling (or going to pending status) continue to increase – in fact, the nation has seen 8 straight months of increased sales!
Here in the Cary NC area, the local MLS association reported today the number of homes going under contract/pending status for October up 28% over October 2008 numbers! The number of closed homes increased almost 18% over the same period last year.
National Pending Home Sales Copyright National Association of REALTORS®. Reprinted with permission.
Cary and Entire Triangle Area MLS Reports Increase in Pending Home Sales
What You Need to Know About the $8,000 Tax Credit & Using it in Cary NC
Curious about the $8,000 Home Buyer Tax Credit???
I’m fielding lots of questions about the specifics of the Newly Revised Home Buyer Tax Credit, so instead of having to sift through lots of fluff & hype here are the nuts and bolts. I am definitely seeing an increase of buyers looking at homes for sale in Cary, NC!
What it is: A GIFT! A $8,000 TAX CREDIT for ‘First Time Home-Buyers’
What it means: If you purchase a home before Dec 1, 2009 then you will receive $8,000! This will be realized by either paying $8,000 less on your income taxes or receiving an additional $8,000 in your tax refund – either way it’s a true eight grand in your pocket! You can elect to have the $8,000 credit applied to your 2008 or 2009 taxes.
1st Time Home Buyer Defined: Simple, You have not owned a home in the past 3 years
The Catch: If you sale the home you purchase in less than 3 years then the government wants their money back!
Fine Print:
1) the home you purchase has to be over $80,000 to receive the full eight thousand (no problem in this area!)
2) if you are single, then your adjusted gross income on your tax return needs to be less than $75,000 – the credit starts to be reduced after that and goes away if your adjusted income is over $95,000
3) if you are married filing jointly then your adjusted gross income on your tax return needs to be less than $150,000 – it starts to be reduced after that and goes away if your adjusted income is over $$170,000
Pretty Cool HUH????
If you are thinking about buying or selling or have any real estate question then please contact me first! I’m here to answer your questions.
David@CaryRealEstate.com 919-812-0150
