Jay Otlewski

I wanted to pass along a "short-cut" that may help to avoid having to utilize an FHA 203k.

If your buyer has a contract on a home that requires some minor repair, there is a way to finance the cost of the repair through an old fashioned escrow holdback. FHA will allow a buyer to finance in the cost of a repair (so long as it is related to Minimum Property Standards - MPS) up to the amount of $5,000. In order to do this, the appraiser must note that the requested or desired repair is related to and a functional part of one of the homes "systems." The cost of the repair is then added to the buyers final loan amount and the amount for the repair is held back at Escrow. The allowance is not for upgrades. The allowance is permitted when dealing with a repair related to the following examples to name a few:

1. Cooling system
2. Heating system
3. Electric system
4. Plumbing system

Utilizing this program when possible will allow clients to avoid the higher interest rates and the extra work that comes with the 203K program. Using this program does not involve any renegotiations with the seller. We simply submit the contract between the buyer and the contractor (who will be doing the repair) to our underwriting department. All repairs are subject to approval by our secondary market. In general this is not a difficult process and most repairs are approved without any extra contingency funds such as 150% of the cost of the repair you may have seen in the past with holdbacks.

When using this program, minimum down payment requirements do NOT change (3% now and 3.5% on January 1, 2009).

Please let me know if you have any questions or if anyone you know now could benefit from this program.

The Phoenix Real Estate Advisor

Jay Otlewski

Contact info- Jay@valleyREadvisor.com or 623.271.4234

In this weeks episode of the Phoenix Real Estate Advisor podcast I have Shelley Martin from Suburban Mortgage back to answer a few more questions about how you could buy a distressed home and have the repair cost added the to the mortgage.

It's called a FHA 203k loan and it allows you to borrow up to $35,000 of additional money for repairs to the home. People were asking about what the money can be used for, is it more expensive then a regular FHA, what are the credit requirements and more.

Click here to listen to the podcast!

Please listen to the podcast and if you need more answer you can contact me at 623.362.3060 or call Shelly direct at 602.751.8127. Also you can visit www.valleyREadvisor.com for searching for homes and all your real estate needs.

GREAT NEWS! If you're considering a move to an active adult community in Arizona, there has never been a better time. Trilogy at Vistancia in Peoria, Arizona just announced a HUGE reduction in their interest rates, not to mention their pricing. For more information or to setup your private tour of this exciting community contact me at 623.271.4234 or jay@valleyREadvisor.com

You have likely heard that last Monday the Federal Government took action to help the ailing U.S. Economy and announced that it would be infusing $600 billion into the credit markets. This action has lead to some very attractive interest rates. We can now offer an exclusive 4.5% program at Trilogy that allows you to take further advantage of falling mortgage rates. Qualified buyers closing escrow in 2008 can get an unheard of 4.5% rate on a 30 year fixed loan (4.66%APR) saving you up to $3200* annually or $97,000* over the life of the loan.

We encourage you to share this great opportunity with your friends and family as the Last Chance Year-End Sale is on now and we must sell our remaining inventory before the end of the year. So now is the time, our limited inventory of Last Chance Year-End Sale homes are going quickly and when these deals are gone, they are gone forever! But hurry, homes must close by December 31, 2008 to take advantage of these incredible, money-saving rates.

Call me today at 623.271.4234, and let's negotiate a deal on your dream home. This is the LAST CHANCE of the year, the sale ends Sunday, December 14. The time is now, Trilogy is the place, and the savings are all yours. Happy Holidays from Shea Homes Active Lifestyle Communities

**Remember my Buyer Guarantee Program-If I can't save you at least $5,000 off the price of a home I will give you $1,000 at closing! Ask me about the details**

In this weeks episode of the Phoenix Real Estate Advisor podcast we cover questions received regarding mortgages. I was glad that Ron Coats from Olympic Mortgage was willing to come back and clear some of this up.

People wanted to know the difference between Brokers and Banks, Is this really a bailout or is it more of a workout, Why do interest rates go up & down so quickly and more.

Click Here to listen!

If you have any other questions please send them to Jay@valleyREadvisor.com or call me direct at 623.362.3060.

Some of the hot economic news we talked about last week has hit and ... its interesting.

•- Housing starts were down 4.5% and building permits were down 12%

•- CPI (measure of inflation) posted the largest decline in the 51 year history of the BLS

•- Average weekly earnings rose 1.4%

I am going to take a glass is half full stance on these numbers. Obviously the lower inflation number is a big plus (we must see what the Fed does with rates to see where this will go), and the hike in earnings is positive. The negative housing stats while "negative", are helping to ease inventory or what inventory would be which is one of our core issues right now. Low mortgage rates and a decreasing inventory will certainly not hurt our cause.

Mortgage rates are doing their best to break away from the 200-day moving average. The problem is, they haven't made up their mind what direction to go. Mortgage Bonds (mortgage rates) have traded sideways and remained relatively unchanged for 11 straight days now. That is something we haven't seen in 2 years. So, I am not complaining about this nice break from the volatility we have become accustomed to, but I am eagerly awaiting a break for the better.

We will be sure to keep you posted! Please let me know if you have any questions!

Jay Otlewski, RE/MAX Integrity, 623.362.3060, Jay@valleyREadvisor.com