APRIL 11, 2009
APPLICATIONS FOR PURCHASE AND FOR REFINANCING UP NICELY AS MORTGAGE RATES REMAIN UNDER 5 PERCENT.The 30-year fixed-rate mortgage (FRM) averaged 4.87 percent with an average 0.7 point for the week ending April 9, 2009, up from last week when it averaged 4.78 percent. Last year at this time, the 30-year FRM averaged 5.88 percent.
Click Here for more details. View Historical Rates:
Click HereOBAMA SAYS TIMING RIGHT FOR MILLIONS TO REFINANCE."Rates are as low as they've been since 1971," with the 30-year rate at 4.78%, Mr. Obama said after meeting with homeowners who have refinanced their mortgages recently. He attributed the decline in part to "extraordinary actions" taken by the Federal Reserve, and in part to actions taken by the administration.
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Q AND A FOR THOSE CONSIDERING A PURCHASE OF A HUD HOME.
What is a HUD home?HUD properties are homes in which the Federal Housing Administration insures the lender against loss in case of a buyer's loan default. Will HUD make property repairs? All HUD owned properties are sold "as is" but you may find many properties in move in condition.
What is FHA 203b financing?FHA’s 203b loan is the basic loan package for the purchase of a home. This home purchase must be your primary residence; unlike conventional loans, the down payment may be a gift from a family member. Your FHA loan can include financing for the loan closing costs and the initial insurance payments; all you need to do is develop a source for the down payment. This loan may be used in conjunction with assistance from state and local housing programs including
MSHDA. For individuals with limited down payment, limited credit or limited income the FHA 203b option offers the possibility of a non-occupant co-buyer to facilitate financing.
Click Here for HUD home listings.
What do the FHA Financing categories mean?Insured (IN) An “insured” property means that the FHA believes the home requires less than $5,000 in repairs. This also means that the property qualifies for the FHA 203b Financing. In addition to the allowable lower down payment, FHA may pay some or all closing costs if requested.
Insured with repair escrow (IE) An "insured with repair escrow" property means that the property meets the requirements for FHA 203b financing. In addition to providing the home loan, HUD is willing to set up an escrow account at closing to help with certain identified repairs. These repairs are usually estimated to be less than $5,000.
Uninsured (UI) An "uninsured" property means that the property requires more than $5,000 in estimated repairs. Properties listed under this category do not qualify for financing under the FHA 203b. In most cases uninsured properties are purchased with cash or convention mortgage monies.
What does “203K Eligible” mean?When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work.
What are “Owner Occupant Sales Incentives”Some HUD properties will offer an “Owner Occupant Sales Incentive” including $100 Down Payment Finance Option (FHA financing only) and / or $2,500 Sales incentive (for properties with a purchase price $25,000 or greater).
How does a buyer looking for a primary residence compete with investor bids?For the first 10 days after a HUD property is listed on the HUD website (see link above) and on the Realtors Multiple Listings Service (consult your Realtor), bids are considered exclusively from individuals who plan the purchase the home as their primary residence. Investors are allowed to bid on these listings only after the 10 day HUD moratorium, if the property hasn't received an acceptable owner-occupant offer.
Can I purchase a home directly from HUD?When buying a HUD property, the service of a Realtor is required. There are certain forms, procedures and requirements that HUD wants to make sure all potential bidders are advised of prior to considering a HUD homes purchase.
Mike Paige
