Gerry Suarez Jr- Your FHA Loan Pro!

Last Friday the USDA formally announced it was entering its annual "roll over" of funding as of its new fiscal year October 1^st. This mainly administrative action results in USDA's funding being delayed until it's made available through the General Accounting Office (GAO). This by no means indicates the USDA is out of funds! What it does do is delay funding for loans and guarantees. While there are still a number of lenders that can and do close and fund loans during this period, the vast majority of lenders do not. This doesn't mean your loan won't close, it just means you may have to wait a bit. How long? Last year the funds were made available by October 17 and this year they expect funds allocated within three weeks.

This means you may have to wait that long to close your loan, or take your loan to a lender that does fund in anticipation of the new allocation. Do note, by the time you can get an appraisal recertified, docs transferred, loan re-underwritten, etc. it's rarely worth it so you're likely best off to sit tight with your lender and wait for a late October close.

The great news is that in spite of crushing volume the USDA actually has $2 billion in funds to carryover from last year! In Florida we went from 2084 loans to over 7000 last year. The increased volume has increased the time it takes to get approvals from the USDA so depending on your area you may need to add from 3 days to two weeks to the process. This will become very critical as we near the deadline for the Tax Credit and the desperate scramble to close by November 30, so plan in advance and plan accordingly.

Lastly for those lenders interested in learning more about the program, consider signing up for the WebEx training offered nationally. This link will take you to the registration page for more information.

Realtors and lenders, if you haven't familiarized yourselves with this incredibly successful 100% financing program you are missing the boat. Home buyers, if you haven't spoken to your lenders and Realtors about the program you may be missing out on the least expensive low down payment program available.

Although the program has income and geographic limitations, all of Lake County, FL is RD eligible and the income limits are very liberal. If you are looking to buy a new home in Lake County, FL you need to know about this loan!

Gerry Suarez, Jr.

Your FHA Loan Pro!

The typically busy spring home buying season has sprung in Lake County which surpassed the 300 unit per month threshold topping out at 317 for the month of June, '09 as reported by the National Association of Realtors. Prior to this April had seen the best sales so far this year with 288 and the June sales blow away January's total of 187 sales. Sales are clearly trending upward with price and rate affordability playing a big role, coupled with the first time buyer tax credit incentive.

While sales of single family homes under $50k took a sharp jump it was sales ranging from $140k to $200k that saw the biggest increase. This reverses earlier trends showing the most activity from $120-$140k and suggests inventory at the lower levels is becoming scarcer.

Speaking of inventory, that's the real shocker! With only 4084 units listed for sale we now have the lowest inventory levels since January, '07 and with the increase rate of sales that reflects a 15.53 month supply, the lowest level since December, '06! Put in perspective as of January, '09- a scant five months ago- we had over 700 MORE homes listed for sale that represented an over 31 month supply!

The trend is now clear folks and if you are looking to buy, all indications are you missed the bottom. It's still a buyer's market and good deals can be found, although the best deals are seeing multiple offers and selling quickly.

So buyers need to be ready to move fast on a good deal and have financing arranged in advance of any offers to negotiate the best price. Speedy closings can also help tip the odds in your favor so having a strong team has never been more important. Government loan programs have become ever more popular as regulations continue to hamstring conventional financing. Appraisal and private mortgage insurance restrictions make FHA/VA/USDA loans the go to sources of financing, especially for first time buyers.

Lastly it is worth mentioning the pace of sales is likely to increase as the deadline for the tax credit nears. Although some buyers may be holding out for an extension or even an increase in the tax credit, it seems unlikely given the excessive levels of government spending that any increases or extensions will make it thru Congress. Once that is made clear look for all the "fence sitters" to jump into the market and further strain demand on what is fast becoming limited inventory. If you don't believe me just look at the numbers- as of June there are only 267 homes listed in the ever popular $100k-120k price range which represents an 8.1 month supply. Someone looking for a home in that price range is already seeing a lot of competition!

Gerry Suarez, Jr.

Your FHA Loan Pro!

To sum it up, the program will not be available in Lake County until early August at best. Applications cannot be accepted until that time. If you have buyers anticipating the need for these funds, now is the time to have them begin working with your lender to ensure they are ready to submit their application as soon as allowed.

There is only $402,343 allocated to Lake County. Assuming we get only 1 use per family at $8000 per family that means we will be able to help only 50 families. If you have a buyer that needs this program they are well advised to act quickly.

Do note a maximum purchase price of $247,387 does apply. Much more information is available at this link. If you have any specific questions, you know where to call.

Gerry Suarez, Jr.

Your FHA Loan Pro!

It's been confirmed! The income limits in Lake County (and the entire Orlando area) for USDA Guaranteed Rural Development loans will go up to $70,750 for households from 1-4 persons and $92,400 for households from 5-8 persons. No false start anymore folks. We can start taking and processing applications immediately but cannot submit them to the USDA until 04/20.

Folks don't take this lightly. I did my preliminary research on this change when it was first announced and discovered EVERY FHA deal I had done would have qualified for RD. Why is this a big deal? RD has no monthly private mortgage insurance and can save our customers an average of $50-$80 per month.

Please communicate this to any buyers you had going FHA. In some cases it can mean the difference between qualifying or not, and of course feel free to call with any questions!

Gerry Suarez, Jr.

Your FHA Loan Pro!

It's been confirmed! The income limits in Lake County (and the entire Orlando area) for USDA Guaranteed Rural Development loans will go up to $70,750 for households from 1-4 persons and $92,400 for households from 5-8 persons. No false start anymore folks. We can start taking and processing applications immediately but cannot submit them to the USDA until 04/20.

Folks don't take this lightly. I did my preliminary research on this change when it was first announced and discovered EVERY FHA deal I had done would have qualified for RD. Why is this a big deal? RD has no monthly private mortgage insurance and can save our customers an average of $50-$80 per month.

Please communicate this to any buyers you had going FHA. In some cases it can mean the difference between qualifying or not, and of course feel free to call with any questions!

Gerry Suarez, Jr.

Your FHA Loan Pro!