Monday, December 2, 2013

When FHA Requires Lead-Based Paint Repairs

If you're interested in working with HUD REO properties and buyers who need FHA financing, you may come across appraiser-required conditions to perform lead-based repairs.

The only time lead-based repairs are required for an FHA-financed HUD REO property is when the property was built prior to 1978.

Lead-based paint removal, however, falls under EPA regulations. A contractor or investor may cure the paint issues, but an FHA underwriter will require a copy of the contractor's Certificate of Completion from an EPA or state provided lead-based paint training program. Repairs completed by owner-occupants do not require this training certificate, but do require documentation of the repairs.

And remember, the FHA appraiser's final inspection will only certify the repairs are completed, not that they were performed according to EPA guidelines.

This rule is required by FHA because renovation, repair, and painting activities such as cutting and sanding can disturb lead-based paint, creating hazardous lead dust, which even in small amounts, is enough to poison children and put adults at risk.

Don't forget to let your renovation-minded clients know!

Monday, November 4, 2013

8 Steps To Reduce Property Taxes

As the sluggish economy drags on, county boards everywhere are looking for ways to replace lost income, and re-assessments of residential real estate taxes is just one of those ways. Sometimes it's fair, other times it avoids belt-tightening. If your property taxes have been raised and you feel it's unfair, here is how to prepare to meet your assessor for a review to lower them:

1. Look for reporting mistakes. Examine the assessor's entire property description. Note discrepancies and document them with blueprints, surveys, photos or other inspection reports.

2. Compare neighborhood assessments. Are other homes in your neighborhood assessed similar to yours? Check the web first; some counties post assessments online.

3. Compare current sales. Talk to a local real estate agent (if you need a referral, I'm glad to help) and get a report of comparables sold within the last 6 months. Sold homes count, listings don't.

4. Take pictures. Document where your home needs repair compared to other homes in better shape in your neighborhood.

5. Get a new appraisal. If your home is unusual or hard to "comp" this is the one time it can work in your favor. If you recently refinanced and the value is lower, use that report instead.

6. Get your contract. If your taxes increased soon after you purchased, values probably haven't changed that much. Document with your purchase agreement.

7. Are you exempt? There are many special exemptions: homestead, mortgage, senior citizens, veterans, disabled persons, and even energy-efficiency. Check with your county and check them all.

8. Prepare your case. In writing, briefly and professionally describe why you are entitled to the reduction, followed by documentation of your reasons. Make sure you have any required forms completed and know all deadlines for your appeal.

Thursday, October 24, 2013

FHA Credit Policy Change Makes it Easier to Qualify "Economic Events" Recognized as Isolated


Effective immediately, policy changes in the way the Federal Housing Administration (FHA) views certain derogatory credit will make it easier for some borrowers to qualify for purchasing a home. Allowances will be made for certain "Economic Events" resulting in poor credit ratings, which previously would cause borrowers to be ineligible.

What do the new rules say? Potential borrowers who experienced a decrease of income by 20 percent or more for at least six months, and that resulted in serious derogatory credit such as a short sale, foreclosure, or bankruptcy, may still be eligible as long as:
  1. The loss of employment or income was due to an extenuating circumstance beyond his or her control and can be documented;
  2. A satisfactory credit history has been restored for a period of 12 months; and
  3. Housing counseling has been completed.
Other changes effective October 15, 2013 include amendments to underwriting guidelines in the area of outstanding, prior judgments and collections, including the exclusion of unresolved medical collections from the underwriting decision.

If you or anyone you know has been previously denied for a home loan based on an isolated credit incident, I may be able to help! And I'm always happy to answer any questions you may have.

After the Shutdown What's in Store for Housing and Home Loan Rates?

The government shutdown has come to an end, but how does the House's last minute deal and the post-shutdown environment impact mortgage rates?

With the debt ceiling stalemate in Washington resolved at least until February 7, 2014, rates could dip in the short term. Home builders stalled by the government shutdown will resume confidence and government-affiliated mortgages such as FHA, VA, USDA and FEMA loans will continue running smoothly.

But over the long term, mortgage rates will rise...

The Federal Reserve is committed to "taper," or reduce its recent purchases of bond buying, which it had started doing to stimulate the economy. As the economy strengthens, tapering will begin. When? Nobody knows for sure, but when it does, rates will rise--and possibly faster than consumers will be able to anticipate.

If you or anyone you know has questions related to the shutdown's impact on home loan rates, or hasn't yet refinanced their Adjustable Rate Mortgage taking advantage of today's historic low fixed mortgage rates, please call or email me today. I may be able to help and I'm always happy to answer questions! 

Saturday, July 27, 2013

How Credit Scores Are Calculated

What makes a good credit score? What factors do credit reporting bureaus consider most when generating scores? Unless recent bankruptcies, collection accounts or outstanding tax payments are involved, the following criteria is generally accurate: 

35% Payment History– Recent delinquencies bring scores down more than those in the past. 

30% Balance– High balances over 75 percent of the available credit limit hurt credit scores. Small balances on multiple cards are more favorable than one maxed-out card. 

15% Credit History– 3 to 5 lines of credit, and a loan with a long history is best. 

10% Type of Credit– Furniture and appliances stores' "pay later" credit lines are less favorable and considered higher risk. 

10% Number of Inquiries– These cost 5 to 15 points off your credit score per inqury. Mortgage inquiries don't count as long as they are within 14 days of each other.

Friday, May 10, 2013

USDA Eligible Properties Saved From 1st Quarter Cut Cities remain USDA Eligible until September 2013

There's good news for people living in areas that qualify for USDA loans. A list of 923 communities that were set to be cut from the USDA's list of Rural Development eligible areas will now remain eligible until later this year, on September 30, 2013.

What does this mean? There will be no changes to the communities that are currently eligible for the USDA Section 502 Guaranteed Program. In other words, cities that were included in the previously released "cut list" will continue to be eligible for USDA financing until the new deadline.

USDA Rural Development and its loan program were designed to help improve the economy and quality of life throughout rural America. The program continues to remain a wonderful option for qualifying homebuyers, with zero down payment required.

For a complete list of the Rural Development eligible communities and for information about qualifying loan programs, consult this link. (

If you or anyone you know is interested in a USDA Rural Development guarantee loan, I would be glad to help and am always happy to answer any questions you may have!

Tuesday, March 19, 2013

FHA Makes Changes to Mortgage Insurance Premiums

What Does This Mean for Home Buyers?
FHA recently increased monthly mortgage insurance premiums on the most standard FHA loans.

How will this impact home buyers?

This will only slightly increase a home buyer's monthly payment.

For example, on a $175,000 loan amount the payment will increase by about $15 per month, based on the new premiums.

Another change is the length of time the mortgage insurance will remain in effect. This is inconsequential however, since rarely do borrowers keep loans for the full life of the loan.

Even though monthly FHA payments will increase a bit, FHA still remains the most flexible and affordable loan program for buyers with less than a 5% down payment.

The good news is that home loan rates are still at historic lows right now, and it's a great time to purchase a new home. If you have any questions regarding these changes or would like to discuss how I can help you or someone you know get qualified for a mortgage, please feel free to call or email me.

Monday, February 4, 2013

Setting S.M.A.R.T. Goals

When you set goals, remember to make them S.M.A.R.T.  Specific, Measurable, Attainable, Relevant and Time bound.

Sunday, January 6, 2013

First Time Home Buyer Grant

There is a terrific grant available for first time home buyers.  This grant will give a home buyer up to $5,000 to use towards down payment, closing and prepaid costs.  There is no repayment required.  Act fast as there is only $15,000,000 available.

  • First time home buyer (cannot have owned a home in the past 3 years)
  • No income requirements
  • Purchasing a single-family/one-unit, owner occupied, primary residence.
  • No lien or repayment required
  • No sales price limit
  • Funds can be used for closing costs, prepaids, and down payment.
  • Grants for non-military homebuyers are $3,000.
  • Grants for active military and veterans are $5,000.
  • Neither grant can exceed 25% of the purchase price.
  • These grant funds may be used with any loan type except 203K loans and may combined with MSHDA’s Down Payment Assistance.