Justin Williams - Loan Officer

Veterans’ Benefits Improvement Act of 2008 Changes

Recently, in VA Circular 26-08-19, the Veterans Administration (VA) announced several changes regarding loan guaranty provisions. President Bush Officially signed over the changes this month October 2008.

Major Improvements to the VA Program are below in layman terms ☺

The Veterans Benefits Act of 2008 includes four major housing provisions.

1.) Cash Out Refinances the bill increases the maximum LTV from 90% to 100%.

2.) The VA ARM and hybrid ARM programs are extended until 2012.

3.) The maximum guaranty amount of 175% of the Freddie Mac limit is extended to 2012. This makes the VA limit the highest in the marketplace compared to Fannie Mae, Freddie Mac and FHA. (This change increases the prospects for extending the mortgage limits in the Stimulus Bill prior to January 1st.)

4.) The bill also increases the maximum guaranty for refinances from $36,000 to the same guaranty for purchase transactions in a particular area.

The official Bill Circular is found HERE

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Just-In-Time Loans - Mortgage Needs and Advice on Time. (757) 692-3464

The Bad News…DAPS Going Away

The Housing and Economic Recovery Act of 2008 eliminates seller-funded down payment assistance programs (DAPs) as an acceptable source of funds for FHA loans for all lenders.
Officially, the Act eliminates seller-funded DAPs on FHA loans with final credit approval issued to the borrower on or after Oct. 1 2008

But There is Good News… FHA Alternatives

• FHA Cash to Close Savings Plan
• FHA Sweat Equity
• FHA Bridal Registry Account
• 1st Time Home Buyer Tax Credit
• City Free Grants / Municipal Programs
• State Programs / V.H.D.A
• USDA Rural True 100% Loans
  

FHA Cash to Close Savings Plan

The FHA cash to close savings plan is a way to get pre-approved for a Construction loan being built without having the liquid assets at the time of application. This is a great way to Buy Now & Save Later.

• Borrowers must provide a written statement as to how they intend to save the funds to close.

• A monthly savings plan that identifies the borrower’s savings plan for the funds needed for closing must be completed in its entirety.

FHA Sweat Equity Making a Comeback

Believe it or not FHA Sweat Equity Program has been around forever. The idea behind Sweat Equity is a way to have the Seller Credit for Purchaser's Down Payment through Labor or Materials being put forth into the house.

Labor performed or materials furnished by borrower before closing may be considered as the equivalent of a cash investment. The idea behind this is:

1. Buyers to get with the Contractors after an appraisal is done to lend "LABOR" to compensate for "Credit" towards down-payment.
2. Buyers to paint the house or do some side jobs to help earn "Credit" for the "Labor"
3. The Sellers will pay for the credit and can raise the sales price in order to compensate for the credit.
   

• Sweat equity may be gifted subject to both gift requirements and additional requirements.

• Borrower’s labor may be considered as the equivalent of cash if the borrower can demonstrate his/her ability to complete the work in a satisfactory manner.

• Delayed work (on-site escrow), clean up, debris removal, and other general maintenance cannot be included as sweat equity.

• There can be no cash back to the borrower in sweat equity transactions.

FHA Bridal Registry Account

HUD allows couples who are planning to get married to establish a bridal registry savings account to help them accumulate the down payment necessary to purchase first home together.
Bridal Registry Account is also available for other situations where an individual or individuals typically receive gifts.

• The borrowers must open an interest bearing savings account with a financial institution supervised by a federal or state agency

• The borrowers must provide a register showing the names of all donors and the dollar amount that has been deposited into the bridal registry account

• There is no requirement that the bridal couple be married prior to closing the mortgage loan

First Time Homebuyer Tax Credit

We all know about the First-time Home Buyers tax credit of $7,500 available for homes purchased on or after April 9,2008 and before July 1st 2009.

This can be used as leverage for Parents or Family Members to provide that extra kick in helping with the down payment. This is a pretty much guarantee for a re-payment during tax time!

For extra assurance and comfort have your local title company write out a notarized agreement to re-pay back the loan from the family member during tax time to use the $7,500 tax credit.



Municipal Programs / City Grants DAPS

Every City has a local Grant and TRUE Down Payment Assistance Program to use with Home Buyers. We have forgotten these lost gems due to the fact of the popularity of Seller Assisted Daps being used, now that they are gone the city grants are becoming extremely popular.

Why not use city grants? Its there for a reason and its FREE. Below are examples of my local city grant in Virginia Beach.

• Up to 10% of Sales Price to provide the grant
• $63,000 income or less to qualify
• Up to $7,000 for First Time Home Buyer Grants

VHDA / State Programs

Check with your local state agencies to find the TRUE 100% financing, well actually 103% financing if you live in Virginia with the VHDA Loan Program.

The States have set aside money that goes hand in hand with city programs all reaching the end effect of helping new homeowners with down-payment and achieving home ownership. Check with your local Mortgage Expert on these programs to see if you qualify.

• VHDA - Virginia's Link http://www.vhda.com

USDA Rural 100% Programs

Good News USDA Rural Loans got Re-approved for 2009.

The rural or Agriculture Loans are another true 100% Financing Loans. You may be surprised that your local cities have pockets of RURAL areas that are zoned as Agricultural.

Call your local tax assessment office to find out which areas are zoned as Agricultural and "BAM" you get a nice 100% financing loan!

http://www.rurdev.usda.gov/

There you have it, Creative and New Alternatives to help Homeowners to provide down-payment assistance help and achieve higher than normal financing options!

Where there is a will there is way call your local mortgage expert today!

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Just-In-Time Loans - Mortgage Needs and Advice on Time. (757) 490-9200

The National Flood Insurance Program was developed by congress address both the need for flood insurance and the need to lessen the devastating consequences of flooding.

The program was set to expire today September 30th 2008 but was passed earlier this week for another 6 months by the House of Representatives and must still be signed by President George W. Bush.

This is a temporary measure due to the simple fact of not coming to a permanent agreement in whether we need to add wind coverages to flood insurance and finding a solution to the programs debt.

The National Flood Program is a federal law that requires you to get Flood Insurance if you are in a FEMA classified Flood Zone.

Below are the following Flood Maps for the Tidewater area:

Suffolk flood map

Chesapeake flood map

Norfolk flood map

Portsmouth flood map

Virginia Beach flood map

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Just-In-Time Loans - Mortgage Needs and Advice on Time. (757) 692-3464

Blog Action Day October 15th 2008 (http://blogactionday.org/)

Blog Action Day is an annual nonprofit event that aims to unite the world’s bloggers, podcasters and videocasters, to post about the same issue on the same day. Their aim is to raise awareness and trigger a global discussion.

The Purpose Of Blog Action Day [Video here]

The goal is to create a world wide awareness on a different topic each year through the power of blogging. Blogs are a great promotion, communicator and resource of information. What better way to help promote this years topic by contributing a blog to this cause.

No Excuses. You don't have to donate money or even run in a marathon. All you have to do to spread awareness is write a blog on the topic for that day.

2007 over 20,000 Bloggers participated in the Environment movement. Over 14 million readers world wide on that day! Let's double those numbers in 2008!

One Issue, Thousands of Voices - Poverty -

Global issues like POVERTY are extremely complex. There is no simple, clear answer. By asking thousands of different people to give their viewpoints and opinions, Blog Action Day creates an extraordinary lens through which to view these issues and triggering a chain reaction of increased and positive movement throughout the world as a collective!

Join me in participating

I am very excited to participate this year and what a wonderful way to bring your blogging skills to the next level, a good cause!

Register your blog. Grab the tracking code. Post your blog and include tracking code on October 15th 2008.

Now the people at Blog Action want you to keep your poverty post within your field. My field of finance will be easy to incorporate and I am sure Real Estate Agents field will be easy to include as well. Any field can find someway to include a poverty article in there.

Still not convinced, how about a FREE backlink?

If doing something for a good cause is still not enough, how about a free backlink for all you SEO buffs out there who want more exposure. Once you register your blog, your blog will be listed in the Blogroll.

Are you in? I am!

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As always thanks for checking out my blog, feel free to leave a comment and have a great day!

Just-In-Time's Word on the Good Cause

As a reminder the new change from Department of Housing and Urban Development (HUD), the upfront mortgage insurance premiums (UFMIP) on Federal Housing Administration (FHA) loans will revert back to a flat fee, effective with case numbers assigned on or after Oct. 1 2008.

Upfront MIP factors effective with case numbers assigned on or after Oct. 1, 2008, are as follows:

• Purchases and Full Credit Qualifying Refinances = 1.75%

• Streamline Refinances = 1.50%

• FHASecure transactions = 3.00%

Sections of the Act NOT impacted:

• 223(e) Declining Markets

• 238(c) Military Impacted Areas

• 255 Home Equity Conversion Mortgages (Reverse mortgages)

• 184 ETO Native American Lending (HUD-184)

This will definitely help with borrowers who were high risk based and paid 2% plus. These changes are all part of Bush's proposed plan of The Housing and Economic Recovery Act of 2008.

If you have any further questions or comments please feel free to contact me.

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Thanks for checking out my blog! Feel free to leave a comment or subscribe, much appreciated!

Just-In-Time Loans - Mortgage Needs and Advice on Time. (757-692-3464)