Fannie Mae’s HomePath pays for closing costs

Click this link for the Press Release

When you buy an owner occupied home that is owned by Fannie Mae and the HomePath loan program is used, you will have the option to receive 3.5% credit toward closing costs or your choice of appliances.  The sale must close by May 1st, 2010 to qualify.

This is part of the ongoing effort to help stabilize the market.  Perhaps it’s also due to the bad press Fannie Mae is getting, about being in bad shape.  Maybe they really need to clear off some inventory.  In the end though, who cares?  If it helps the buyer and Fannie Mae, I’m happy.

Matt Steinmetz

A Little Fed and a lot of FHA

I heard the Tavern on the Green in Central Park is or has just closed. Here is a picture I took while there last September. Many people remember this place by the manicured animal shapes like this one.

The Fed says that the Fed’s Mortgage Backed Securities purchase program (see previous post), will end March 31st.  Overall this news was taken bad as rates got a little worse yesterday.

Also in a previous post, I commented on FHA changes.  Well it looks like the date for the increase in up front mortgage insurance (UFMIP) is April 5th.  The increase, just days after the Fed stops buying MBS’s, takes the UFMIP from 1.75% of the loan amount to 2.25%.  If you look at a $300,000 purchase price, and use FHA with the minimum 3.5% down, after April 5th your UFMIP will be $1,582 higher!  This is can be a problem for a lot of people.  I know, because I see how people struggle to save just enough for a down payment and closing costs.

It is true that UFMIP can be, and usually is financed into the loan amount, how ever that means higher payments.  While the impact to payments is low, those buyers who are already on the border for qualifying will be affected.

At some point the cap for seller credits will come into play as well.  Currently a seller can credit 6%, but FHA will shrink that to 3% sometime soon.

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Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine

2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
Fax 925-940-9639

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

FHA Making Changes

Currently when someone purchases a home using a FHA loan, they are required to pay an upfront mortgage insurance premium.  This fee can be paid or financed, and is currently at 1.75% of the loan amount.  FHA will be increasing this premium up to 2.25% of the loan amount.

In an effort to have purchasers put more skin in the game, many ideas were discussed, including raising the down payment minimum from 3.5% to 5 %.  It would appear the insurance premium was the victor instead…  For now!

Other changes include limiting seller concessions, like paying closing costs to 3% instead of the current 6%.  Once again requiring more skin in the game from the buyer.

The reason for these changes?  FHA has become so popular over the last year that it insures thousands of loans per day.  With that it’s foreclosure rate has increased, which means its insurance payouts have also increased.  Not to mention that there are minimum requirements for reserves as compared to the amount of insurance FHA issues.  The FHA has been said to have fallen below these requirements and needs cash.

In addition, FHA will attempt to hold lenders more accountable by reporting each lenders FHA performance rating to the public.  The belief is that a borrower will want to go through a lender with a positive rating.

These changes will leave many borrowers out of the market, as they will not be able to save for the additional insurance premium and additional 3% in closing costs, that can now be paid by the seller.

Whether you believe this is a bad idea, since some would be home buyers will be left out, or a good idea, as it keeps FHA in a good position for future use, this is the reality of changes to come.

I did not see a specific date as of yet, but read “this summer” in one article.

Click here to go to the FHA site and read the press release.

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Thank you,
Matt Steinmetz

Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-A2 Salvio St.
Concord, CA 94520

Phone 925-671-9501 x119
msteinmetz@envoymtg.com

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

Energy Efficient Mortgages

This loan gives you extra cash to complete energy efficient improvements in your home.  This loan is similar to the FHA 203K streamline loan, which is a larger scale  rehab loan, but the EEM (Energy Efficient Mortgage) lends up to $8,000 maximum.  The 203K and EEM can be used together. 

Just in case you were not aware of this little program here is some information about the the Energy-Efficient Mortgage.
-Finance up to 15% of an existing home’s value or 5% of a new homes value
-The monthly energy savings are added to your income, to help you qualify
-There is a 3% minimum investment required by you, but rebates and other incentives from the governmanet may be applied toward your contribution.

Some items you can use the money for are:

• Windows and Doors
• Heating and Cooling
• Insulation

If you’d like to know more, contact me today.

Also, feel free to Share or Comment

Thank you,

Matt Steinmetz
Envoy Mortgage
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
Fax 925-940-9639

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

Contra Costa County, home loans, mortgages, Concord, CA, refinance, rahab loans, 203K, FHA 

Erase 30% of your Principle Balance

Don’t hold your breath.  As I excitedly read the guidelines for the new FHA program that allows you to erase 30% of your principle balance in order to lower your payments and hopefully not be underwater on your loan…  I quickly realized this is yet another new program that the government spent a lot of time and money developing and that it will help very few. 

The problem is that you have to already be in an FHA loan.  Most of us do not, unless you bought in the last year or so.  You have to be delinquent on your mortgage, AND already tried to resolve the issues with 3 other programs, before FHA will entertain your case. 

Feel free to comment or share.

Thank you,

Matt Steinmetz
Envoy Mortgage
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

Matt Steinmetz, Concord, Ca, Contra Costa County, Envoy

Owe more than your house is worth?

Fannie Mae had recently come out with their DU Refi Plus program which allows borrowers to refinance up to 105% of their homes value. This helps, but very little as most people who bought in the last few years are more under water than that. However it appears as of September 1, 2009 the new guidelines will allow refinances up to 125% of the homes value. This should encompass more homeowners, though still not a significant number for those of us in California, but even still kudos to Fannie Mae for trying. If you think this helps you, let me know and we’ll discuss further. Remember that your home loan must be owned by Fannie Mae to qualify and chances are you do not know who owns the loan. It is not necessarily the company you write your check to, as other companies retain servicing rights to loans even after the sell them off to Fannie Mae. Contact me and I’ll help you find out if Fannie Mae is the owner of your loan.

Feel free to comment below or share this with your social network.

Matt Steinmetz

Envoy Mortgage

FHA 203K Streamline

Here is a link to a flyer on this topic

The FHA Streamline 203K loan can be used on purchases or refinances.  This loan allows  you to get extra money above the payoff amount or cost of the home to handle repairs or upgrades.  This is great for buying fixer uppers or putting windows in your existing home, plus much more. 

Loan amounts can go up to the maximun FHA loan limits in your county.  For Contra Costa County that limit is $729,750.  The maximum for repairs is $35,000 but a portion of that is not available to you as it is kept as reserves and then returned to the bank if unused, which reduces the balance on your loan. 

The borrower gets 50% of the improvement proceeds at the loan closing and the other 50% after the repairs are completed.   The repair work can be financed over and above the contracted sales price or appraised value with the total being added to the final loan amount, up to 110% of the value.  Any repairs over $15,00 do require an inspection upon completion.

Let me know your thoughts on this by commenting below, and feel free to use the share button to pass this along.

Matt Steinmetz
www.mattsteinmetz.com