MARY IACOVELLI

Now that most seller paid Down Payment Assistance has gone away and will for sure in October 2008, here is a Marketing Idea for your Sellers and Purchasing Idea for your Buyers. If your seller is offering money to the buyer, which they can under FHA guidelines of up to 6% of sales price, offer an alternative to the buyer.

Yes Mr. Buyer you will have to bring the 3.5% Down Payment out of your Pocket or from a Gift (from a relative, or 401K, etc) but here is what we can do to assist you. Since FHA allows us to give you up to 6% in contributions, let's take 3% and make your first few months interest payments and you Mr. Buyer can take the money you save on the payments and put it back where you got it!!!!

A rough example would be on a $200,000 house if the Interest Payment was $1,150 per month and the Principle Payment was $150 then the seller could pay approximately 5 months worth of interest payments or a total of $5,750. 3% of $200,000 is $6,000 which divided by $1,150 equals 5 months. The buyer would pay the $150 per month plus Taxes and Insurance AND can save the $1,150 per month that they would be paying and put it back into savings, 401K, their parents pockets or wherever they got it.

Below is the verbage from FHA underwriting guidelines that will allow this for today. Who knows what will happen in the future. Please feel free to contact me if you would like further explanation or have questions. OR contact your local loan officer that deals with FHA loans.

"A. Seller Contributions. The seller (or other interested third parties such

as real estate agents, builders, developers, etc., or a combination of

parties) may contribute up to six percent of the property's sales price

toward the buyer's actual closing costs, prepaid expenses, discount points,

and other financing concessions. Contributions exceeding six percent of the

sales price or exceeding the actual cost of prepaid expenses, discounts

points, and other financing concessions will be treated as inducements to

purchase, thereby reducing the amount of the mortgage. Closing costs

normally paid by the borrower are considered contributions if paid by the

seller. Inducements to purchase are described in paragraph B, below.

"The six percent limitation also includes seller payment for permanent and

temporary interest rate buy downs and other payment supplements, payments of

mortgage interest for fixed rate mortgages and Gyms only (but not

principal), mortgage payment protection insurance, and payment of UFMIP.

"Fees typically paid by the seller under local or state law, or local custom,

such as real estate commissions, charges for pest inspections, fees paid for

trustees to release a deed of trust, etc., are not considered contributions.

The dollar limit for seller contributions is calculated by using Attachment

A on the HUD-92900-PUR/HUD-92900WS. Each dollar exceeding Has six percent

limit must be subtracted from the property's sales price before applying the

appropriate LTV ratio."

Yesterday, I had Todd Usher with Addison Homes come to my house to do a Home Energy Audit. I didn't know what this was or what to expect! What he did was amazing!

He placed a frame inside my front door covered with a red material that reminded me of parachute material. In the bottom of that cover was a hole where he place a fan that pulled the air out of the house. Attached to that was an electrical mechanism that had two readings on it and was attached to the fan. He asked me to turn off the AC Units and make sure all the windows and outside doors were closed.

When he turned on the fan, he showed me where the pressure was dropping in the house and told me that the fan would maintain that pressure so he could do the testing. What Testing??

The coolest thing was the Infared Camera. As he walked around with that it showed where the heat was coming into the house and measured the temp of that heat. I.E. around interior wall switch plates the heat was being pulled into the house and it was flowing fast!! Around the Attic Stairs, Recessed Lights, where the sheetrock meets between walls and ceilings, and more!! the temps on the heat coming into the house with this test was reaching 102 Degrees and it was about 90 outside!!!!

Todd explained about the Stack effects in a house and how to minimize that to save on utilities and gave lots of energy saving tips that cost little to no money. I will be getting a report from him in a few days and I can't wait to see it. The really great news is that My Windows are not leaking!! With an 8 year old house, he said it was in really good shape and that we were really taking good care of the house. He said on older homes, sometimes there are too many factors like bad duct work, to know exactly where the problems are. Our house was relatively simple and I learned a Great Deal!!! Thanks Todd for the Home Energy Audit!!!!!