Homepath was created to facilitate the purchase of the bulk of REO properties currently serviced/guaranteed by FNMA (Fannie Mae).
Highlights:
- As little as 3% down allowed for owner occupied!
- As little as 10% down for non owner occupied and 2nd Homes!
- No Mortgage Insurance!
- No Appraisal Needed - Value determined by Sales Price
- You may qualify even if your credit is less than perfect
- Loan Amounts up to $801,950 allowed
- Loan Term Available : 30 Year Fixed
- Transaction Purpose : Purchase Only
Borrower Eligibility
- First Time Homebuyers allowed
- Non-Perm Resident Aliens not allowed
- Non-Occupant CoBorrowers not allowed
Here’s How to get started : Check www.homepath.com to ensure property is eligible for HomePath financing. And then contact us if you want more details on this special loan program.
There has been a lot of buzz in the media over last couple of days about extension of First Time Buyer Credit. National Association of Mortgage Brokers (NAMB), National Association of Home Builders (NAHB) and National Association of Realtors (NAR), have been working with the Government for sometime now to extend the credit. Without the extension, the credit is set to expire on Nov 30, 2009.
There have been lot of proposals including not only extending the credit but expanding it to cover all kinds of buyers (and not just the First Timers) and/or increasing the annual income cap to $300,000.
Bloomberg quoted Regan Lachapelle, an aid to Senate majority leader Harry Reid First-time homebuyers who close before April 1 would get the full $8,000, and the credit’s value would be reduced by $2,000 in each successive quarter until expiring at the end of the year.
I personally do not believe the credit will be expanded. However, there is a strong likelihood of this being extended. The bill could pass the senate as early as next week.
Stay tuned!
Related Post : $8000 First Time Home Buyer Credit
On 10/21 FHA via it’s mortgagee letter announced delay in FHA condominium changes. This is what the letter mentioned:
Implementation of FHA’s new policy guidance for condominium project approval and condo unit financing will be delayed until December 7th 2009. The new guidance, to be issued within the next two weeks, will: 1) offer additional leniencies to address the difficult market conditions and 2) augment some portions of FHA Mortgagee Letter 2009-19, providing additional information and clarification.
Until the new guidance takes effect on December 7th, 2009 lenders may continue to use the Spot Loan Approval guidance. Further, the site condo and manufactured housing condo project changes that have already been implemented are not affected by this delay.
Related post: FHA guideline changes to Condominium financing
The week that was:
Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 9.4 percent to a seasonally adjusted annual rate (SAAR) of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.
Interest rates were unchanged all week until Friday when rates edged up a little on treasuries as well as mortgages. For most of the past two months with only a few exceptions the 10 yr treasury note and mortgages have held within a 10 basis point range. Last week the stock market churned around on much better earnings reports but by the end of the week all three key indexes were fractionally lower on the week.
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The week that was:
By the end of the week mortgage rates and treasury rates were basically unchanged. Now looking for mortgage rates to hold between 5.00% and 5.37% for the near term, that said, the technicals are now slightly bearish.
Estimates for Loan Volume for 2010 & 2011 - The MBA is out with their revised estimates for loan volume next year and the next; the estimates have been revised lower. In 2010 the new estimate is $1.556T frm $1.62T previously thought; in 2011 to $1.482T frm $1.608T.
Economy News - Weekly unemployment claims were expected to be unchanged, but fell 10K to 514K while continuing claims fell 75K on the week. Core Consumer Price Index (ex food and energy components), a measure of inflation was +0.2% against estimates of +0.1%.
Dow Jones over 10,000 - The DJIA did it, traded over 10K last week. A benchmark for the headlines but other than that not much more than a number. It is a positive psychological level that we all pay attention to, the question in the equity markets now is, will it add to buying and cause more money to be invested? Or is it the buy the rumor, sell the fact syndrome that often occurs after markets have discounted the good news.
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If you are planning to buy a Condo in San Jose or other parts of the Bay Area and planning to get an FHA loan keep reading. FHA has made some major changes to their condo guidelines and they go into effect as of Nov 2nd, 2009. Some of the highlights:
- Currently lots of condominium projects in the bay area is approved by FHA. However, any project approved prior to October 1, 2008 loses it’s pre-approval and must re-apply. To find a list of approved projects, visit the HUD link https://entp.hud.gov/idapp/html/condlook.cfm. Make sure under approval method pick the option - “HRAP/DELRAP”. Thats the new HUD review and approval process.
- Spot approvals, where a project could be approved for an FHA loan even if the entire project was not approved by FHA, is not allowed anymore. And though some lenders will have the authority to do so, because of the enormous liability attached most likely they would refrain from doing it. Which means all project approvals will have to go to FHA directly.
That being the case, lets find out what are the FHA requirements for approving a condo project:
- No more than 30% of the units can have FHA financing
- >50% of the units must be owner-occupied.
- No single entity may own more than 10% of the units in a project
- No more than 15% of owners can be delinquent on their HOA dues. Also, no pending litigation against the HOA, it’s officers or directors is allowed.
- The HOA must also provide evidence of the project’s appropriate hazard, liability and flood insurance.
- For new constructions, at least 50% of the units in the project must have been sold.
- But in my opinion the deal breaker could be this condition - A current reserve study must be performed to assure the HOA has adequate funds available for the funding of capital expenditure and maintenance. With so many HOAs running into capital reserve issues recently, this condition alone could be the #1 reason why a lot of projects may not get approved.
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The week that was:
Everything was ticking along fine in the bond and mortgage markets until Thursday afternoon when the 30 yr bond auction results saw much less demand than was expected. The first time in a few weeks the markets were slapped down on the belief there was no end in sight for demand of US treasuries. Mortgages however held their ground on Thursday but Friday the mortgage market was slammed hard, as always following the lead of the treasury markets; mortgage prices fell 29/32 by the end of the day Friday; the yield on mortgages spiked back over 5.00%.
Freddie Mac’s weekly Primary Mortgage Market Survey® reported 30-year fixed-rate mortgage (FRM) averaged 4.87 percent with an average 0.7 point for the week ending October 8, 2009, down from last week when it averaged 4.94 percent. Last year at this time, the 30-year FRM averaged 5.94 percent. The last time the 30-year FRM was lower was the week ending May 21, 2009, when it averaged 4.82 percent.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.35 percent this week, with an average 0.5 point, down from last week when it averaged 4.42 percent. A year ago, the 5-year ARM averaged 5.90 percent. The 5-year ARM has not been lower since Freddie Mac started tracking it in 2005.
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Fannie Mae will change underwriting guidelines for conforming loans for San Jose and rest of the Bay Area. They are doing this to reduce their overall risk. Some of the changes announced recently and going into effect on the weekend of December 12, 2009 further tightens some of the guidelines. Here are the highlights:
Credit Score: All Fannie Mae loans — whether underwritten electronically or manually — will now require a 620 credit score minimum. There are very few exceptions.
Mortgage Insurance coverage: Borrowers loan-to-value exceed 80 percent of the property value now have a choice:
- Accept higher mortgage insurance premiums month-after-month
- Accept a one-time fee paid at closing to compensate for higher risk
Both options pass higher costs to consumers.
Debt-to-Income Ratio: Fannie Mae will no longer approve Debt-to-Income Ratio exceeding 45 percent except with very strong assets and credit to back it up. In no case can Debt-to-Income Ratio exceed 50 percent. Debt-to-income ratio is defined as the ratio between a borrower’s monthly payment obligations divided by his or her gross monthly income.
Other changes: Fannie Mae is retiring Biweekly Mortgage Loans because of lack of demand and there will be new risk-based pricing on “expanded level” approvals.
To read the entire announcement from Fannie Mae click here
The week that was:
A volatile but good week for the rate markets. Mortgage rates fell to their lowest levels since last April. Treasuries continue in demand from foreign central banks and domestic investors; likely some of the buying is associated with new concerns that the economy isn’t on the fast track of recovery as markets were expecting recently. Economic data flowing last week were generally worse than estimates, shaking the confidence that the V shaped economic bottom may be more a W shaped recovery.
Unemployment nationwide rose to 9.8 percent in September from 9.7 percent the previous month. That’s a 26-year high.
Freddie Mac’s Primary Mortgage Market Survey® reported that 30-year fixed-rate mortgage (FRM) averaged 4.94 percent with an average 0.7 point for the week ending October 1, 2009, down from last week when it averaged 5.04 percent. Last year at this time, the 30-year FRM averaged 6.10 percent. The last time the 30-year FRM was below 5 percent was the week ending May 28, 2009, when it averaged 4.91 percent.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.42 percent this week, with an average 0.6 point, down from last week when it averaged 4.51 percent. A year ago, the 5-year ARM averaged 6.00 percent.
Note that these rates are for conforming loan amount up to $417,000. Loan amounts higher than that typically have higher interest rates.
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