Democrat and Chronicle Addresses Local Housing and Mortgage Market

From the Desk of Don Draughn, Professional Mortgage Consultant

Website: http://ahfmortgage.elliemae.net/ddraughn

In the Sunday, February 10th, edition of the Democrat and Chronicle, staff writer Mary Chao wrote an article addressing the Rochester, NY, housing and mortgage market. It is a thorough article and covers many of the topics that are pertinant to the real estate market in Rochester. She covers many of the questions that are being asked all over the country regarding the current (and I believe the soon to be ending) housing and credit crunch. I have included a link to the article for you so you can read what she says:

Rules for mortgages squeezing buyers

written by Mary Chao - Staff Writer

Contrary to the informatation provided to Mary Chao by some of her sources, there are options other than a VA loan available to buyers who for one reason or another need 100% financing. As a six plus year veteran of the mortgage industry, I have in many cases and even recently been able to get the financing that buyers need even if they don't have a down payment of any where from 5% to 20%. Below are some of those options:

1. My Community Mortgage offered by Fannie Mae. This loan gives potential buyers the ability to finance 100% of the purchase price of their new home as long as their income does not exceed 100% of the HUD Median income for their area. In Rochester and Monroe county that limit is currently $63,500 according to HUD's website. Other restrictions do apply so this may not be for everyone but it is an option for many.
2. Flex 100 offerd by Fannie Mae. This loan is a version of the My Community without the income limits. It offers 100% financing as long as the buyer meets Fannie Mae's credit guidelines.
3. Home Possible 100 Mortgage offered by Freddie Mac. This loan is very similar to the My Community Mortgage. It offers 100% financing and is also tied to the HUD Median Income limits. Again, this loan may not be for everyone but is also an option for many.
4. USDA Rural Development. This is a loan product offered by USDA and will give 100% financing with no monthly PMI (Private Mortgage Insurance) that is required by My Community and Home Possible. There is, however, an upfront MIP (Mortgage Insurance Premium) that is financed on top of the total mortgage. This program does have income limits but is not linked to the HUD Median income for a given area. The income limits can be viewed at the USDA Website. This program also has property location restrictions which can also be viewed at the USDA Website. If the income and location restrictions are met and the borrower has a FICO score of at least 620, this is a guaranteed loan. There are debt-to-income ratio limits as well. This should be discussed with your loan officer.
5. FHA with a Down Payment Assistance Grant. FHA is probably the most popular of the four loan products listed here. Even though there are some who want to do away with the Down Payment Assistance Grants, there is a movement by the Grant Foundations (Ameridream, Nehemiah and Home Down Payment Gift Foundation, etc.) to keep these from going away. There are no income limits with FHA but there are Maximum Mortgage Limits that can be viewed by State and County at the FHA Website.

The housing market is fairing well in Rochester, NY. As Mary Chao mentioned in her article, the Median Sale price for 2007 rose 2.2% over 2006. The number of homes sold went down but the prices are still going up even if not by as much as before. We have been fortunate enough to not be hit as hard as some other areas of the country and even New York state. Now is a very good time for First Time Home Buyers to considering buying. After all, real estate is a very good investment even in difficult economic times.

Don Draughn is a Professional Mortgage Consultant and a Sale Manager at Affordable Home Funding, Inc. located at 900 Perinton Hills Office Park, Suite 970, Fairport, NY, 14450. His phone number is (585) 425-5811. He is available to serve your needs for residential and commercial mortgages in Rochester NY and all of New York State.

REGISTERED MORTGAGE BROKER - N.Y.S. BANKING DEPARTMENT

Loans arranged with 3rd party providers. Borrowers must qualify.