First Time Buyer 3% Down Payment Program 2014

Fannie Mae and Freddie Mac are stepping up to the plate and bringing back their 3% down payment program to help first time buyers with their down payment requirements. The maximum loans available for this type of program will vary based on the County/City of where the home is located. A 3% down payment will make it much more feasible for buyers to attain their goal of buying a home.

According to a post in the American Press (December 11, 2014)……

“The new loans announced by Fannie Mae and Freddie Mac will be fixed-rate mortgages for up to 30 years, available only on a primary residence. Fannie plans to begin issuing the 3 percent loans before the end of the year. Mortgage insurance payments will be required, and qualified buyers will need to complete a financial counseling program.

Freddie Mac plans to start issuing its 3 percent loans to low- and moderate-income borrowers in March 2015. Eligible borrowers will be required to earn less than an area’s median income and will also have to pay mortgage insurance and undergo financial counseling to participate. Monthly payments also will have to fall under 43 percent of the borrower’s income.”

To find out if you qualify for this type of loan, check with a mortgage lender.

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Congress is again looking at the Mortgage Forgiveness Tax Act to possibly re-enact and hopefully retroactive to the beginning of 2014. This Act expired at the end of 2013 and if not re-enacted will require those individuals you had either a foreclosure or short sale in 2014 to pay income tax on the unpaid debt. The amount of debt forgiven in reported on a 1099C which is sent to the taxpayer.

What does this mean? If a homeowner did a short sale and the lender forgave $40,000, then the homeowner is responsible for paying income tax at their current tax rate for the amount forgiven. The debt that is forgiven shows up as Income to the borrower.

Some estimates show that there are over 5 million homes in the U.S. still upside down. While some areas have recovered, many parts of the Country have not. And in many instances if people are unable to pay their mortgage, how will they pay the taxes owed on the “fake income”?

According to the Washington Post, “Most Capitol Hill experts say there’s a good chance the bill will pass.” We can only hope

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4 Year Wait to Purchase a Home?

Fannie Mae may be changing the rules in the next 45 days for the wait period for people who have had a short sale. Currently a buyer could purchase another home after two years of the final short sale completion. Of course, the hardship had to be documented as to the reason for the short sale.

There is rumor — and a strong one— from many mortgage folks that by mid August the rules will change and buyers will now have to wait four years to repurchase.

This is further encouragement for anyone contemplating a home purchase who has had a short sale, to take action now. If you have already exceeded the two year mark and you now have to wait another two years, the market I am sure will be quite different. Higher prices and if not home prices, definitely higher interest rates.

Bottom line if you are in a position to purchase, get moving!

 

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San Ramon City Center is Now a Reality

I attended the San Ramon City Council meeting, whereby Sunset Development presented the plans for the San Ramon City Center-Downtown. There have been some changes to the original plans, both architectually and size.

The new center will be approximately 300,000 sq. ft.  smaller than planned, due to no major department stores as tenants. Sunset Development has done extensive research regarding the trends for shopping malls and their intent is to make the San Ramon City Center more of a place to meet friends, dine at the restaurants or just stroll the promenade in addition to shopping.

The renditions of what the Center will become is exciting. The Center will consist of restaurants, retail, commercial, residential, movie theater, ice saking rink in the winter and a hotel when it is completed. There are two phases to the project.

It is anticipated that the shovels will hit the ground early 2015 and the opening will be in 2016.

 

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Who Are Boomerrang Buyers?

Boomerrang buyers is a term recenlty introduced as buyers who are now back in the market to purchase a home after losing their home either to a short sale or foreclosure.

Many of these people are in a much stronger financial position that will allow them to buy a home. Even though they had a financial crisis, they still believe owning a home is a wise financial decision.

FHA financing is available within one year after the loss, conventional financing requires a two year wait period, and there is a funding program no waiting period.

 

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