Are you looking for a low down payment program for you or your buyer? Do you think all those "down payment assistance programs" went away? True down payment assistance programs are still alive and well! At Providence Home Mortgage we use several including the City of Grand Rapids Homebuyers Assistance Fund (www.grand-rapids.mi.us/index.pl?page_id=320), MSHDA's Down Payment Assistance Program, and the IDA (Individual Development Account) down payment assistance through ICCF (www.iccf.org). I will feature the City of GR program here as they have some really cool features:
Do you worry that the condition of the home is a problem? While condition can be a concern, there are solutions! Have you heard that the lead based paint assessment is strict? I am an experienced loan officer with the program, and I can do a walk through of the property prior to the City lead assessor viewing the property to tell you what needs to be fixed, if anything, before they walk through.
Better yet, the program can be combined with lots of financing options:
Click the link below to see the target area that qualifies for the City of GR down payment assistance program. All areas, shaded and non-shaded are eligible.
www.grand-rapids.mi.us/index.pl?binobjid=5685
Are there income limits? Yes. A family of four can make just under $50,000, a single person can make just under $35,000, etc.
To learn more about how you can use this program, please give me a call at (616) 719-4513.
People may think I'm crazy, but I am still focusing the bulk of my attention on purchase business! While refinancing into a lower rate looks and sounds great at first glance, all too often in our declining Michigan market, it is not realistic- most callers we see who inquire about refinancing simply don't have enough equity (if they have any at all) to refinance. In the early 2000s when the refinance boom happened homes were going up in value rapidly. A family could wrap in closing costs and new escrow accounts and still have equity left over, and it would work. Now, unless you originally purchased with 20% down and barely borrowed against the home, the chances are good that you owe too much to refi. In many cases (dare I say most) people bought with low down and then borrowed against their home, so now they owe more than it's worth. So, unless a client wants to bring in several thousand dollars as cash to close (again, there are often closing costs and the need to replenish escrows) then it doesn't work.
And then I think to myself? Do we really want to start this brutal cycle all over again anyway? Haven't we learned that when people rolled all this money into their new loan that we weren't doing them any favors and likely stripping them of the little equity they had?
The exception would be, if you have a person who does have equity and you can pay the closing costs for them, they bring in their escrow monies (rather than wrapping it into the new loan), and they replenish those funds post close when they get an escrow refund from the mortgage company/servicer that was just paid off.
If you or your client are in that boat, a refi. might be worth exploring.
In the meantime, there are plenty of great deals out there to be had in the purchase market to keep us hopping!
Are you or your buyer looking for a low down payment? Look no further! HUD (Housing and Urban Development) is still offering the $100 down incentive program when purchasing a HUD home (FHA foreclosure) in distressed areas like Michigan! HUD will pay $2,500 in closing costs for the buyer and a $500 bonus to the selling agent!
Do you or your client worry about the condition? Worry no further! We have answers! There are several ways to get money to fix the home including:
The HUD website is pretty user friendly. In Michigan go to:
On the right hand side of the website is a link to different states. Click on Michigan and you can type in an address to see the status.
On the left hand side is a link for purchasers. You can click on this link to find out about the process. You can also find out if the home is eligible for a FHA loan without repairs, with minor repairs (up to $5,000 that are financed in a regular FHA loan) or with repairs (which really means the repairs are more than $5,000 and you need the 203K FHA loan- see my 203K blog- 203K FHA Rehab. Loans- We are Signed Up and Excited!).
Even better is that if the HUD appraisal is less than 6 months old we can use that to further reduce the buyers costs!
To discuss buying a HUD home further, please give me a call at (616) 719-4513.
I am happy to spread the news that we are up and running with the 203K FHA loan! This is a wonderful product that can be a huge tool in our local Michigan market with so many foreclosures. Features of the program include:
Types of improvements include:
Excludes:
Who can do the work:
For more information, give me a call at (616) 719-4513!
I hate to call myself a pessimist and one definitely needs to have a "glass half full" approach in these unprecedented housing market times. However, I find it hard to believe that Hope 4 Homeowners will take flight the way our government speculates when FHA Secure has already shown a slow start, and Hope 4 Homeowners is an even more aggressive product, in a market where lenders are tightening up.
Here's the problem the way I observe it. First, the entire product's success depends on a two part process whereby two mortgage companies or servicers work jointly together to find a solution for the struggling homeowner. The first condition to make the product successful requires Mortgage Company A/The Loan Servicer to take less than the borrower currently owes on the home as a payoff; we'll call this the "short-payoff" or "write-down" of the debt. Here's my cynicism: FHA Secure and MSHDA (Michigan State Housing Development Authority) here in Michigan already allow for write-downs to be used in conjunction with their bailout products; I work for a unique mortgage broker, Providence Home Mortgage, owned by ICCF, a HUD approved non-profit housing counseling agency. ICCF focuses on pre-purchase counseling for first time homebuyers but does a lot of foreclosure prevention. ICCF also works very collaboratively with Home Repair Services here in Grand Rapids. There are almost 15 housing counselors between the staff of ICCF and HRS and none of them have reported a success with getting a servicer to take a short payoff or write-down to date. And MSHDA's Save the Dream Mortgage would allow for 100% financing of current value.
So my question is, then why would a servicer do a write-down to 90% of current value?
Second, Hope 4 Homeowners is totally voluntary! Each servicer, at their discretion, can take less than is owed. How is this different than pre-legislation with FHA Secure?! There's no consequence for not doing what the government suggests, none whatsoever.
Third, and this I believe may be the biggest hurdle is this: the borrower typically has to be able to get approved for a FHA mortgage with company B, a different mortgage company. While FHA states there are no minimum score requirements and that some delinquencies are allowed, most banks voluntarily place minimum score requirements on their FHA loans now. Most of them require a 580 score if the loan can go through an automated approval system or a 600 to be reviewed by a good old fashioned human underwriter. I have yet to see a 580 go through automation. And how many people with late payments on their mortgage can meet these score requirements? I haven't seen one yet!
Here's my logic as to why the banks want these score requirements- most banks get the FHA Insurance (commonly called PMI) placed on the loan post close. So, they don't want to take the risk that they approve a marginal loan only to find out that FHA won't insure it and now they have another high risk loan in their portfolio with no where to sell it!
I really wonder who is testifying in front of congress? It seems like another, dare I say, useless program created by our government to try to stop the bleeding, an attempt to look like they are doing something. The right hand isn't talking with the lefthand. FHA can say all day that they will "allow" something, but if they can't get the gunshy lenders to bite now that they've been burned for so long, then this program will be fruitless.
I specialize in first time home buyer products including FHA, MSHDA, and Rural Development. I use true down payment grants for my buyers from local and state housing authorities.
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