Julie Messina, CMB

U.S. Rep. Howard Coble introduced legislation this week to help the housing market maintain the momentum that has emerged from buyers in recent months.

The Greensboro Republican has offered a bill that would

1. extend the credit through 2010,
2. open it to all home buyers and
3. eliminate income-qualifying limits.

The current tax credit is encouraging more buyers into the housing market. As it works now, the tax credit only applies to first-time homeowners who buy homes before Dec. 1. In addition, single buyers need a modified adjusted gross income of $75,000 or less; married couples need $150,000 to get the tax credit. The tax credit does not have to be paid back unless the homeowner sells the house within three years of purchase.

The new bill is called Homeownership Moves The Economy 2009 and has been referred to the House Ways and Means Committee.

Coble is seeking 50-75 co-sponsors for the bill. If you think this is a good idea, show your support by writing your Congressman and Senator to let them know how you feel. The economy thrives when the real estate market thrives. Other businesses are affected by our housing industry and this would be a shot in the arm for home sales and our industry.

Use this link to send an e-mail message to Arizona Congressman Shadegg

Use this link to send an e-mail message to Jon Kyl

Use this link to send an e-mail message to US Senator John McCain

The state of Arizona received $20 million dollars - part of the Government's National Stabilization Program (NSP) to help stabilize home values thru the sale of foreclosed homes. This program may help you if you are considering a home purchase over the summer. This money is currently available to residents in counties of Apache, Coconino, Cochise, Gila, Graham, Greenlee, La Paz, Mohave, Navajo, Pinal, Santa Cruz, Yavapai and Yuma. The money will be available to all of Arizona state July 1^st,2009.

Which homes are eligible for this program? You must purchase an eligible foreclosed home in the state of Arizona. The home must be a single family residence, townhome, or condominium that meets FHA guidelines, and it must be vacant at the time of purchase.

Who is eligible for this program? You must be purchasing a primary residence, and your total household income cannot exceed 120% of the Area Median income for the County the home is located in. Check your income here: http://yourwayhomeaz.com/eligible.aspx You will need to take an 8-hour homebuyer education class to obtain your certificate to use the money.

What are the loan terms? This is a zero interest , deferred second lien mortgage for 22% of the purchase price of the home. The term of the loan depends on the amount "borrowed". More details about the program can be found on the fact sheet http://yourwayhomeaz.com/pdf/State%20NSP%20Fact%20Sheet.pdf

A 3% down payment on the purchase of the property is required , and 1% of that must come from the borrower's own funds. This program is offered by CNN Mortgage in combination with a FHA loan.

Example

Price of Home $ 100,000

75% FHA loan $ 75,000

22% NSP Loan $ 22,000

3% down payment $ 3,000 ($1,000 required from borrower)

Contact a Participating Lender and Realtor. There are important qualifying points to understand for the borrower and selected property. Call a participating lender to get more information about the program, and by all means don't try to do this yourself. An experienced Realtor can help you navigate the process of buying a bank owned property.

Current Interest Rates

Signs of an imroving economy are good for businesses, bad for mortgage rates this morning. That 30 Year Fixed rate FHA loan above with funds from the NSP is priced at 5.875% (APR 6.52%).

Best Conventional Conforming 30 Year Fixed Rate loan today is at 6.000% (APR 6.098%).

Best Conventional Conforming 5/1 LIBOR ARM today is at 5.50% (APR 5.801%)

Clarification on Short Sales

I have had a few calls this week from realtors asking about the availabity of housing finance after a client has completed a "short sale" on a previous mortgage. A Short Sale is usually referenced on the credit report as "settled for less than full amount owed" or similar wording. The FICO score and the mortgage rating on the credit report may or may not reflect any late payments. It generally does not show a reference to "foreclosure" and may not show the account as "pre-foreclosure.,"

With most major Investors (Chase, Bank of America, ...), a prior short sale requires a two-year waiting period from settlement date before obtaining a new mortgage. This applies to Conventional and FHA financing. On a FHA short sale, if HUD experienced any loss on a prior FHA loan with a "short" payoff, the borrower will not be eligible for another FHA loan until CAIVRS is cleared and HUD's elapsed time frame is met. This would also apply to USDA or any government loan where there was a previous government loss.

When I receive more information on this topic I will update you. There are a good deal of homebuyers looking to purchase a residence that were forced to short sale the home they can no longer afford due to economic circumstances out of their control.

Interest Rates:

Is the economy is rebounding? Last week's treasury auctions, signs of an improving economy, a boost in the stock market, raised consumer confidence, and next week there are more treasury auctions. Analysts that study the bond markets say we have seen the lowest of the mortgage rates. There is not a consistent level of optimism among all however and unemployment numbers are still too high. All this and more factor into the direction of mortgage rates. Mortgage rates took a big hit this week and rates under 5% are history for the moment. I am routing for a couple of good pricing days in the next 30 days, but not counting on it. At times like this, homebuyers are asking what the ARM rates are doing, although that product is not really advisable unless you are not planning on staying in the home over 5 years.

Best Conventional Conforming 30 Year Fixed Rate 5.375%*

Best Conventional Conforming 15 Year Fixed Rate 5.125%*

Best FHA 30 Year Fixed Rate 5.375%*

Best Conventional Conforming 5/1 ARM 4.625%*

Best Conventional Conforming 5/1 IO ARM 4.875%*

* Above Conventional rate quotes are as of 5/29/09 on a Conventional $250,000 loan amount, primary residence at 80% loan to value, with a 720 FICO score. APR includes $1,200 in lender fees and 980 in title charges (title charges may vary). FHA Quote assumes a $150,000 loan amount and a 680 FICO score, and a 96.5% LTV. Documentation of income and assets required. No origination or discount points.

Will the government do anything to get interest rates back down below 5%? We hope so, but based on this morning's MBS rally it's obvious that the government is not the only one buying up mortgage securities. Private investor interest is moving prices are up (Rates down) this morning.

Best rate Conforming 30 year fixed 5.000% (APR 5.126%) 80% LTV, $250,000 ln amt, 720 FICO, OOC

Best rate FHA 30 year Fixed 5.250% (APR 5.401%) 96.5% LTV, $150,000 ln amt ,680 FICO, OOC

Have a Great weekend and go see a movie, there are two or three really good ones out.

Neighborhood Stabilization Program

Home Down Payment and Closing Cost Assistance

May 2009: Phoenix just received $39,478,000 in federal funds to help families purchase a home in the city of Phoenix. For a first time homebuyer, this down payment assistance comes in the form of a $15,000 zero interest loan that is repaid when the house sells or borrower refinances.

Homebuyer Requirements:

Primary Residence First Time Homebuyer (has not owned a residence in three years)

Borrower contribution $1,000 towards down payment

8 hour homebuyer education required from HUD approved agency

Household income cannot exceed 120% of the Area Median Income

Debt to Income ratio Housing: 28% Total Debt: 43%

Meets requirements for FHA financing

Property Requirements:

Single Family Detached, Eligible Condos, and Townhomes (no condo conversions)

Must Meet HUD Housing Quality Standards

Must meet FHA property eligibility standards

Located in the City of Phoenix

Foreclosure property -lender owned (no short sales)

Sales Price 15% below appraisal value or more

Must Purchase 3 year home warranty contract