Buyer's Assistance Program

FHA Program Offers Purchase, Renovation Aid

The Federal Housing Administration is encouraging use of its little-known 203(k) loan program.

The 203(k) lets an owner-occupant borrow money for both the purchase and renovation in one loan, and put down only 3.5 percent.

The program requires the use of credentialed contractors and can include cosmetic improvements as well as major renovations like replacing plumbing or electrical.

But in this lending environment, more homebuyers are finding 203(k)s worth the hassle. In fiscal 2008, the government insured about 6,700 of the 203(k) loans. This year, more than 11,000 loans have already been insured, according to the Office of the Comptroller of the Currency.

Source: Chicago Tribune, Mary Ellen Podmolik
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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

Buyer's Assistance Program

Tips for Parents Buying Homes for Children

With home prices low, now could be a good time for parents to give their children a home or even an investment property.

Here are some suggestions for managing the tax consequences from Mark Luscombe, tax analyst with Wolters Kluwer.

* Give a cash gift. Individuals are allowed to gift up to $13,000 per person in a given year without incurring gift tax. That means a couple could give their offspring and spouse $52,000 in a single year to go toward a down payment.

* Lend money. The government requires that family members meet or exceed minimum loan rates to avoid having the loan be considered a gift. The rates are currently low. One way to handle this is for parent to use the $52,000 gift exclusion to forgive both interest and principal.

* Use a trust. Set up a qualified personal residence trust, or QPRT. You’ll need an attorney to handle this transaction, but in a nutshell, parents put the home they want to give their children into a trust. At the end of a pre-set term, the home passes to the children with no taxes due.

Source: The Wall Street Journal, Shelly Banjo (06/25/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Buyer's Assistance Program

Lenders Avoid Loan Modifications

The Obama administration’s $75 billion foreclosure prevention effort is unlikely to succeed because mortgage lenders cannot turn a profit on modified loans, concludes a new report by the Federal Reserve Bank of Boston.

Analyzing 665,410 loans originated between 2005 and 2007 that subsequently became seriously delinquent, the Boston Fed found that only 3 percent of borrowers had their loans modified to lower monthly payments, and about 5.5 percent received workouts that did not result in lower payments.

Also, up to 45 percent of approximately 150,000 borrowers who received some kind of aid ended up in arrears again, but about 30 percent of delinquent borrowers were able to fix their problems without help from their lenders.

Source: Boston Globe, Jenifer McKim (07/07/2009)(06/25/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Buyer's Assistance Program

Another Rash of Foreclosures Coming Soon?

Some economic observers are predicting another wave of foreclosures later this summer or in the fall. That’s because lenders that have held off on foreclosures as part of President Obama’s plan will now move forward aggressively to clear the backlog of troubled mortgages.

Rising foreclosures will further depress home values, says Mark Zandi of Moody’s Economy.com, who calculates that 15.4 million homeowners—one in five of those with first mortgages—will be underwater.

Seth Wheeler, a senior adviser to Treasury Secretary Timothy Geithner, says the government is “unlikely to implement another moratorium.”

But Wheeler said the government plans to put in place some programs that encourage lenders to try some alternatives to foreclosure.

Source: Chicago Tribune, Don Lee (07/06/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Buyer's Assistance Program

Fed to Keep Short-Term Rates Low

The Federal Reserve announced Wednesday that it expects to keep short-term interest rates “exceptionally low” for the next few months. It also underscored its commitment to make $1.25 trillion in total purchases of mortgage-backed securities by the end of year.

Both actions are likely to keep mortgage rates low through the end of 2009.

The Fed failed to raise a cap of $300 billion in purchases of Treasury securities, which could lead indirectly to higher mortgage rates because mortgage rates tend to rise in conjunction with Treasurys.

In response to the possibility of rising mortgage rates, the Mortgage Bankers Association this week cut its forecast for total 2009 mortgage originations by 27 percent.

Source: Inman News (06/25/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Buyer's Assistance Program

Federal Home Buyer Tax Credit Could Be Expanded

A first-time home buyer tax credit of up to $8,000 has helped to move housing inventory during an otherwise sluggish real estate cycle. Now both legislators and the business community are hoping to build on the incentive’s success by expanding it.

A number of bills have been introduced in the House and the Senate that lobby for an expansion of the measure. Among the proposed changes:

* Setting a new cap of $15,000.

* Extending the tax break into mid-2010.

* Making the benefit available to all home buyers, not just first-timers.

* Offering a separate tax credit to $3,000 for borrowers who refinance.

USA Today, Stephanie Armour (06/22/09)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Buyer's Assistance Program

City of Marietta, Cobb & Cherokee County 1st Time Homebuyer Programs

First Home Down Payment Assistance Program
The program has up to $7,500 of funds available through a 0% interest rate, with no amortization, due upon conveyance of the deed. Income limits are 80% of HUD Area Median Income Limits.  Borrower contribution is 1% – 3% of sales price.  Purchase price limit is between $170,000.

Individual Development Account Program
Grant from United Way. Provides first time homebuyer with pre-purchase counseling, economic literacy classes and down payment assistance.

Section 8 (Voucher Homeownership) Program
This program allows subsidies once applied to rental payments to be utilized for mortgage payments. This program is designed to increase wealth, build stronger communities and help renters realize the dream of homeownership. CHI provides credit counseling, life skills training, financial/literacy training, budget counseling and lending. We make second mortgage loans upto $25,000 for 10 years. Maximum purchase price is $160,000.

Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Buyer's Assistance Program

Fed Gov’t Tax Credit Can Be Used for Housing Down Payment

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn’t receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at “The Real Estate Summit: Advancing the U.S. Economy,” at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Other Solutions for Today’s Market

During his address at the summit, Donovan went on to say that the Obama administration plans to further stabilize the housing market. “I do think we have some early signs that the market overall is stabilizing,” Donovan says. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”

The morning session included a panel discussion that was moderated by CNBC’s Ron Insana. Panelists examined cutting-edge solutions necessary to promote and preserve homeownership and real estate development, stimulate the economy, and protect the nation’s taxpayers. They also shared their ideas on what the role and responsibility of the federal government is in the revitalization effort.

“Right now the Federal Reserve is the market,” said panelist Jay Brinkman, chief economist for the Mortgage Bankers Association. “What will be the effect when the Fed stops buying?” Brinkman explained that an exit strategy must be planned for the long-term; the federal government cannot continue to support the mortgage markets indefinitely.

“We are thrilled that so many high-caliber individuals were able to join us today at this important meeting to promote stability in the housing market and the U.S. economy,” said NAR President Charles McMillan. “We look forward to an ongoing dialogue and action toward this goal, during our midyear meetings this week and beyond.”

The real estate summit is part of the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo. During the week ending May 16, more than 8,500 REALTORS® will attend meetings, visit lawmakers and inspire action on Capitol Hill.

Source: NAR

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Buyer's Assistance Program

Atlanta Opportunity Downpayment Assistance Program

The Opportunity Downpayment Assistance Program (ODAP) is being sponsored by the Atlanta Development Authority.  It’s a City of Atlanta Downpayment Assistance Program.

• First Time Homebuyer – No
• Funds Available – 10% of Sales Price
• Area Served – City of Atlanta
• Income Limits – $71,200 – 1-2 person household; $81,880 3+ person household
• Type of Program – 10 yr. deferred, 0% interest 2nd mortgage
• Borrower Contribution Amount – $1,500
• Purchase Price Limit – $252,890

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

Buyer's Assistance Program

Beltline Affordable Housing Opportunity Program

The Beltline Affordable Housing Opportunity Program is being sponsored by the Atlanta Development Authority.  It’s a City of Atlanta downpayment assistance program.

• First Time Homebuyer – No
• Funds Available – Up to 20% of Sales Price
• Area Served – City of Atlanta – Beltline TAD
• Income Limits -
  1-2 person household: up to $56,360 – 20% assistance; $56,251 – $71,200 – 10% assistance
  3+ person household: up to $56,250 – 20% assistance; $56,251 – $81,880 – 10% assistance
• Type of Program – 15 yr. deferred; 0% interest 2nd mortgage
• Borrower Contribution Amount – $1,500
• Purchase Price Limit – $252,890

—
Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

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