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Federal Housing Response. JERRY NAGY & MEGAN BOOTH NATIONAL ASSOCIATION OF REALTORS®. Federal Housing Programs. FHA Loan limits equal to 125% 2008 median home price – up to $729,750 3.5% downpayment – 6% seller concessions allowed MIP = 1.75 upfront/.5-.55 annual/1.50 refi

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federal housing response

Federal Housing Response

JERRY NAGY & MEGAN BOOTH

NATIONAL ASSOCIATION OF REALTORS®

federal housing programs
Federal Housing Programs
  • FHA
    • Loan limits equal to 125% 2008 median home price – up to $729,750
    • 3.5% downpayment – 6% seller concessions allowed
    • MIP = 1.75 upfront/.5-.55 annual/1.50 refi
    • No minimum credit score
    • Loan limits – https://entp.hud.gov/idapp/html/hicostlook.cfm
  • VA
    • Loan limits equal to 125% 2008 median home price – up to $1,094,625
    • Zero-downpayment
    • Fees = 2.15% on zero-down (3.3% for repeat) – no fee if service-connected disability
    • No minimum credit score
    • Loan limits - http://www.homeloans.va.gov/docs/2009_county_loan_limits.pdf
  • RHS
    • Income eligible up to 115% local area median income
    • Flexible downpayment (including zero-down)
    • Eligible areas - http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
specific loan programs
Specific Loan Programs
  • 203k rehabilitation mortgage
    • FHA
  • Energy Efficient Mortgages
    • FHA
    • Freddie Mac/Fannie Mae
  • Location Efficient Mortgages
    • Freddie Mac/Fannie Mae
  • HECM
    • FHA
  • HECM for Purchase
    • FHA
homebuyer tax credit
Homebuyer Tax Credit
  • $8000 Tax Credit for first time homebuyers*

*may not have owned a home in previous 3 yrs

  • Any single family residence (including condos and coops) that is a principal residence
  • Income Limits ($75,000-$95,000/$150,000-$170,000)
  • Recapture if sold in first 3 years
  • Effective January 1, 2009 – November 30, 2009
use of the tax credit
Use of the Tax Credit
  • According to 2008 IRS Tax Tables
    • A single filer would need $46,600 in taxable income to have an $8,000 tax liability
    • A couple would need $58,600 in taxable income to have $8,000 in tax liability
  • The median household income in 2007 was $50,233.00
examples of the tax credit
Examples of the Tax Credit

Example #1

Example #2

  • Nick and Nora file a joint return.

Withheld= $11,000

Actual Tax Liability = $9,800

Homebuyer Tax Credit = $8,0000

  • Result: $1,200 regular refund + $8,000 tax credit = refund of $9,200
  • Cesar and Maria file a joint return.

Withheld = $5,000

Actual Tax Liability == $7,200

Homebuyer Tax Credit = $8,000

  • Result: Owe $2,200 additional, + $8,000 tax credit = $5,800 refund.
homeowners in trouble
Homeowners in Trouble
  • Hope for Homeowners
  • GSE Refinancing
  • GSE Loan Modification
  • Other Resources

1 888 995 HOPE (4673)

hope for homeowners h4h
HOPE for Homeowners (H4H)
  • Updates being debated in Congress
  • Effective October 1, 2008
  • Voluntary for lender and homeowner
  • New loan at 90% (93%) current appraised value
  • FHA must approve loans and borrowers
  • National loan limit of $550,400
  • (Incentives to lenders/servicers)
  • More information at www.fha.gov/hopeforhomeowners
gse responsible homeowners refinancing
GSE “Responsible Homeowners” Refinancing
  • Will allow refinancing for families who owe more than 80% the value of their home
  • Designed for those making on-time payments, but have had their home value fall
  • Loans must be for less than conforming loan limit
  • Estimated to help 4-5 million homeowners
gse responsible homeowners refinancing example
GSE “Responsible Homeowners” RefinancingEXAMPLE
  • In 2006, the family took out a 6.5% 30-year fixed rate mortgage for $207,000 on a house appraised at $260,000.
  • Home is now worth $221,000, and they owe $200,000.
  • They would have a hard time refinancing because they don’t have 20% equity.
  • They could refinance into today’s rates (near 5.1%), reducing their annual payment by $2,300.
homeowner stability initiative
Homeowner Stability Initiative
  • For homeowners who are at risk of foreclosure
  • Shared effort to reduce mortgage payments
    • Lender must reduce interest rate, so that the payment is no more than 38% of income
    • Federal government will further reduce interest rate to bring the ratio down to 31%
    • Interest rate stays low for 5 years, then gradually increased up to conforming rate at time loan was made
    • Payment incentives to homeowners to reduce principal (up to $1000/year) for up to 5 years
    • Incentives for servicers to participate and for lenders/servicers to reach borrower before delinquent
    • Partial guarantees
  • Guidelines for Loan Modifications
example of homeowner stability initiative
Example of Homeowner Stability Initiative
  • In 2006, the family took out a 7.5% 30-year subprime mortgage of $220,000 on a home worth $230,000.
  • Today they owe $213,431, but their home is only worth $189,000. One member of the family also had had their working hours reduced, lowering their income.
what do homeowners do
What do Homeowners Do?
  • As of March 4, the programs are available
  • The information a homeowner will need to provide:
    • #1- call lender and ask if you are Freddie/Fannie Loan
    • Gross monthly income of all borrowers, including pay stubs
    • Most recent income tax return
    • Information about any second (or third) mortgages
      • (only the first mortgage will be modified)
    • Payment information on all credit cards
    • Any payments on other loans (student, car)
cdbg neighborhood stabilization program
CDBG – Neighborhood Stabilization Program
  • $4 billion allocated to states/localities based on foreclosure rate, # of subprime mortgages, # homes in default or delinquency – additional $2b allocated in ARRA – competitive bid
  • Funds provided through the CDBG Program
  • Funds used to:
    • Provide financing
    • Purchase
    • Manage
    • Repair
    • Resell foreclosed and abandoned properties
  • Homes must be:
    • used to assist individuals and families with incomes at or below 120% of area median income.
    • Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income.
resources for more information
Resources for More Information
  • www.realtor.org/governmentaffairs
  • www.fha.gov
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