Category Archives: Government Loan

Mortgage Rates Inch Up With Positive Job Report

After posting record lows the last few weeks, mortgage rates inched higher this week, Freddie Mac reports in its weekly mortgage market survey. Yet, rates still remain near 60-year lows.

An employment report that was better than market expectations helped to lift long-term Treasury bond yields and mortgage rates as well, Frank Nothaft, Freddie Mac’s chief economist, notes. In September, the economy added 103,000 workers; however, the unemployment rate still remained high at 9.1 percent.

Here’s a closer look at rates for the week ending Oct. 13.

30-year fixed-rate mortgages: averaged 4.12 percent, with an average 0.8 point, moving up from last week’s record-hitting 3.94 percent average. A year ago at this time, 30-year rates averaged 4.19 percent.

15-year fixed-rate mortgages: averaged 3.37 percent with an average 0.8 point–that’s up slightly from last week’s low of 3.26 percent average. Last year at this time, 15-year rates averaged 3.62 percent.
5-year adjustable-rate mortgages: averaged 3.06 percent, with an average 0.6 point, and inching up from last week’s 2.96 percent. Last year at this time, the 5-year ARM averaged 3.47 percent.
1-year ARMs: averaged 2.90 percent with an average 0.6 point, a drop from last week’s 2.95 average. A year ago, 1-year ARMs averaged 3.43 percent.

Future Natural Housing Market Federal Intervention

Federal Reserve Chairman Ben Bernanke urged lawmakers to form strong housing policies to help the housing market recovery and advance the economy. Bernanke made the comments during a Q&A session following a speech in Cleveland on Tuesday about emerging market economies.

His remarks come at a time when more than 6.3 million homes are 30 days or more behind on their mortgage payments or in foreclosure, according to Lender Processing Services.

The Fed has taken steps that have been keeping mortgage rates hovering at or near record lows in recent weeks, but with unemployment still high, Bernanke said that record-low interest rates don’t seem to be helping the housing crisis.

During the speech, Bernanke called long-term unemployment a national crisis. About 6.2 million Americans, or 45.1 percent of all unemployed, have been jobless for more than six months  a total that is at its highest point since the Great Depression, HousingWire reports in citing government stats.

“Clearly getting more money into the hands of home owners who spend it could help to fuel GDP growth,” Eric Rosengren, president of the Federal Reserve Bank of Boston, said in remarks on Wednesday. “This would reduce one of the impediments to a more significant effect from the monetary policy actions taken to date.”

FHA Condo Approval HUD Minneapolis St. Paul

Check all CIC townhomes and condos here to make sure they are FHA HUD Approved.

Other factors not commonly known that will still be detrimental to successful financing with a condo even after we verify at the HUD condo lookup that the property is FHA approved.

  1. Commercial Space: No more than 25% of the property’s total floor area in a project can be used for commercial purposes
  2. Investor Ownership: Generally no more than 10% of the units may be owned by an investor. This also applies to developers/builders who subsequently rent vacant unsold units.
  3. Delinquent HOA Dues: No more than 15% of total units can be more than 30 days late in arrears of their association fee payments.
  4. Pre-Sales: At least 30% of the total units must be sold prior to endorsement of the mortgage in the case of new construction
  5. Owner Occupancy Ratios: At least 50% of the units must be owner occupied or sold to owners who intend to occupy the units. For proposed, under construction projects still in their initial marketing phase, FHA will allow a minimum owner occupancy amount equal to 50% of the number of presold units (the minimum presale requirements of 30% still applies)
  6. FHA Concentration: FHA may not insure more than 50% of a particular condo project. For projects consisting of 3-4 or fewer units FHA will insure 1 unit.

If these challenges are not researched prior to going under contract the lender will be alerted when they go to order a case number and HUD rejects the property address.

Homeownership Opportunity Program (HOP)

The Homeownership Opportunity Program (HOP) provides short-term, temporary financing for the purchase and rehabilitation of vacant properties in, or in imminent danger of foreclosure, and for properties in a foreclosure impacted area. HOP loans are paid off by standard first mortgage products when the rehabilitation is completed.

Borrower Eligibility
To qualify, borrowers must:
Intend to owner-occupy the property;
Meet income limits (total income less than $96,500 – adjusted annually);
Be pre-approved for a standard first mortgage with a loan amount sufficient to pay off the HOP loan when the work is completed.

Property Requirements
Cannot be in industry standard mortgage condition, and;
Must be a single family detached, zero-lot-line townhome, owner-occupied duplex, manufactured home on permanent foundation, and be;
– Vacant as a result of foreclosure, or
– In imminent danger of foreclosure with a negotiated short-sale, or
– Located in a foreclosure impacted area

Purchase After Foreclosure or Short Sale

You are eligible to purchase on a government loan, 3 years after the date of

  1. sherrif sale
  2. discharge date if included in a bankruptcy
  3. date of sale if short sale

Please beware and make sure if you are 1-2 years out you are checking and watching your credit to make sure that the below scenario does not happen to you.

You are also eligible for first time home buyer status where you may be approved for down payment assistance.

Today my client was beginning a mortgage pre-approval to purchase a new home. Due to husband’s loss of job in 2007 they lost their home to foreclosure. I was confident after my initial conversation that they would have no problem approving for a new loan. The sheriff sale was over 3 years ago. Both buyers have stable full time employment for the past 2 years. They had paid off a Mercedes lease 2 months ago and over $65,000 in credit cards, student loans, and unsecured debt in the past 24 months. There had been no late payments or collections in the past 3 years.

Unfortunately there was a surprise. Even though the home had foreclosed in 2007, EMC mortgage corporation still reflects they owe $129,000 on a home equity lien. EMC is reporting them late every month for the past 3 years. My client immediately called EMC and was told they still owe $129,000. The only solution will be hiring an attorney. Their credit is further damaged beyond the damage incurred by the initial foreclosure They should have over 700 credit scores after significant payoff of all debts and time elapsed, however their score is 576 today. We cannot help them purchase at this time until they agree to get EMC to settle, write off debt, or they pay it off.

Mortgage Condos Townhomes Minneapolis St. Paul Twin Cities

Condominiums are just airspace within the unit surfaces. Legally known as “vertical subdivisions,” condominium owners own just the expensive airspace between their floor, ceiling and walls to the inner surfaces. The building structure is owned by the HOA, including the plumbing and wiring. The HOA usually also owns the common areas, such as hallways, elevators, land and parking areas. However, sometimes the common areas are owned by the individual condo owners as tenants in common, with the HOA responsible for maintaining the common areas.

Condominium owners often have the exclusive use of a specific additional area, such as a patio, balcony, storage area, and/or garage parking space. But the HOA usually has maintenance responsibility for those exclusive control areas that are part of the common area.

Townhouses and PUDs (planned unit developments) are slightly different. Townhouses are usually two-story condominiums with common walls shared with the adjoining townhouses. A few townhouses include ownership of the land beneath each townhouse, but many do not include the land that is owned as a common area by the HOA. However, if the townhouse is part of a PUD, then the homeowner usually owns the land beneath their unit. Either way, the HOA is responsible for the townhouse exterior maintenance, just as it is for traditional condominiums. Of course, individual townhouse and PUD owners are responsible for their interior maintenance, such as a dripping faucet or a plugged toilet.

There is much confusion over townhomes that are legally condos. Please make sure prior to viewing townhomes that the legal description on tax records is lot/block NOT CIC. If it is a CIC it is legally a condo even though marketed as a townhome. There is a link to the tax records on all online MLS links. Or you can go directly to the county website. Often times the listing agent will incorrectly state FHA/VA financing available because they haven’t done there homework. We get numerous clients who fall in love with a townhome that is legally a condo and not FHA approved prohibiting them from purchasing. If it is a CIC you will then need to check here https://entp.hud.gov/idapp/html/condlook.cfm to make sure it’s FHA HUD approved. You aren’t done yet, then you must make sure to check the expiration date and the concentration percentage. There cannot be more than 51% FHA concentration in any one development.