The August 22, 2009 HUD approved ABCs of Homebuying class held at Rogue Community College was packed! Maybe this is because of all the incredible incentives Rogue Valley home buyers have available to them, such as the $8,000 first time home buyer tax credit set to sunset November 30, 2009, the City of Medford’s Down Payment Assistance program that gives matching down payment funds and closing costs up to a total of $15,000 to eligible first time home buyers purchasing a home in Medford, or the recently/soon to be released Neighborhood Stabilization Program that gives matching down payment funds and closing costs AND repair costs up to $50,000 to eligible home buyers purchasing eligible foreclosure properties. The down payment assistance programs required that recipients complete approved Homebuyer Education courses in order to receive their funding, and I’m guessing this is exactly what the 40 students in Saturday’s class are planning to take advantage of. Who wouldn’t, if they could get any of this funding, especially at zero interest with no monthly payments on these two down payment assistance programs?!?!
Are you a Rogue Valley renter who would like to own their own home? Check out these articles about ways you might be able to accomplish your goal, or feel free to call me for a no obligation consultation.
See you at the closing table!
Karen Cooper – OR/CA Mortgage Consultant – www.Quality4Loans.com
The days of flexible underwriting criteria have gone by the wayside for the most part. But, there are still common sense underwriting guidelines out there to meet the needs of the low-to-moderate income home buyer and homeowner. One of the most commonly used common sense programs is the FHA loan.
For the first time homebuyer with limited savings, the FHA loan is a great tool to buy a home with, since it requires a minimum down payment of only 3.5%, which may be a gift from family or down payment assistance like the City of Medford’s down payment assistance program recent released again for first time homebuyers who make less than 80% of the HUD median household income for Jackson County, or the released TODAY Neighborhood Stabilization Program for eligible home buyers who make less than 120% of the HUD median household income for Jackson County and are purchasing an eligible foreclosure home.
FHA has been one of the few options available to the home buyer who has lower credit scores and/or no credit scores. These credit scores requirements have been raised by many lenders, and have been tightened in conjunction with the debt-to-income ratio guidelines, but this is still a great loan. When compared side-by-side with a conventional loan with 5% down payment and private mortgage insurance, FHA wins hands down in most cases with private mortgage insurance’s higher credit score requirements and higher premiums. Even with FHA’s tightening criteria. There is still “credit scores as low as 580” allowed, but lenders offering this are now rare, and will likely be raising their credit score guidelines soon, too.
Be aware that “lender overlays” may be tougher than the actual requirements of HUD on the FHA loan, so if one bank is telling you they cannot help you, you might want to think about calling a mortgage broker who deals with many different banks. Just because one bank tells you “no” doesn’t necessarily mean all lenders will give you the same answer. For example, the company I work for is a bank AND a broker. Therefore, I must be familiar with the guidelines for many different lenders on these same loan programs. Until recently, I new that one bank was my “go to source” for co-signers high debt-to-income loans. I know to stay away from another lender when the borrowers “work in the industry” – are contractors, real estate brokers, appraisers or escrow/title people. I know that Oregon VA home loans need to qualify for private mortgage insurance’s tougher criteria, but recently changed to more flexible criteria, and when private mortgage insurance is not required, the Oregon VA home loan folks bend over backwards to help eligible Oregon Vets.
When compared with the USDA Guaranteed Rural Housing loan program, the FHA loan usually comes out more expensive. But, the FHA loan may be used to buy a home in Medford, Central Point, or Grants Pass when the USDA loan programs may not be used due to these cities’ population size and/or metropolitan status. And, the FHA loan may be used to purchase an existing manufactured home on its own lot/land that meets their requirements, whereas USDA programs may not.
Want to find out more about what programs are available to you based on your individual circumstances? You may attend a HUD Approved Homebuyer Education course like the “ABC’s of Homebuying” class Southern Oregon Housing Resource/ACCESS Inc. and Rogue Community College put on. The next class will be this Saturday, but due to the high level of activity in the entry-level price ranges with first time home buyers entering the market and the Homebuyer Education requirement of the Neighborhood Stabilization Program, this upcoming class is full (look for me as your instructor this time for the “ABCs of Closing”). Stay tuned for additional classes to be scheduled, or you may call me to schedule your free personal consultation.
See you at the closing table!
Karen Cooper – OR/CA Mortgage Consultant – www.Quality4Loans.com
For additional tips on How To Buy A Home In The Rogue Valley, Oregon, follow these links:
How To Buy A Home in the Rogue Valley, Oregon | Using Neighborhood Stabilization Program Funds
How to Buy A Home In The Rogue Valley, Oregon | If You Are A Self-Employed Borrower
Remember the days of the “Stated Income” loan? They weren’t that long ago, having fizzled away and disappeared in to the fog of “alternative lending” programs that are no longer with us. While many alternative and subprime mortgage products needed to disappear in order to bring the realm of real estate financing and markets reliant upon it back to a more sustainable level, the stated income loan is sorely missed.
The stated income loan was designed to meet the specific needs of the self-employed, commissioned 
or bonus receiving homeowners. People receiving irregular revenue streams with spiking expenses who have exhibited a successful track record of budgeting to accommodate those ups and downs. These are financially savvy people who have owned their businesses or been in their commission/bonus positions for more than 2 years. They are continually making strategic decisions when it comes to their finances, both business and personal.
While we used to be able to offer a stated income real estate loan program to this type of borrower, creating a smoother loan process for them while limiting the stacks of income documentation we would need by not asking them to verify their income with more than their exhibited ability to pay (payment history/credit scores) and their CPA’s verification of their business or their business license, those days are gone. The self-employed, irregular income/expensed borrowers now need to drag out their tax returns and qualify based on the income and expenses they have reported and filed. The net verifiable income they pay taxes on (forget about any cash revenue!), after their business expenses are deducted.
Typically, the most recent two years of personal and business returns will be required. If you are a “sole proprietor” filing Schedule C, the lender/bank’s underwriter will average your line 12 income for each tax year adding back any depreciation/depletion expense on your Schedule Cs. If your business is incorporated or a partnership, 1120/1065 tax returns will be required for the underwriter’s review in addition to your personal tax returns. In all cases, a two year average of your reported net income for the most recent two tax years usually is used to determine your income and level out the spikes and dips that business/ commissioned/ bonus income earners typically experience. These days, as in days past, declining income is a big no-no.
Do you have bills you are personally liable for that pass through your business like credit cards, vehicle loans, or other installment loans? If you can prove these bills are paid by the business by providing 12 months cancelled checks, we will not need to count these bills when qualifying you. Regularly have vehicle loans that are traded in/sold, and you have acquired another one during that 12 months? We can usually still work with this, by exhibiting you have a history of doing this. Otherwise, the new vehicle loan payment will need to be counted in your personal obligations when we qualify you.
Planning to buy a home or investment property in the Rogue Valley in Oregon and have irregular income and expense as referenced above? Make sure you get preapproved for your real estate financing before you go “house hunting”, as the rules probably have changed since the last time you applied for a loan, secured or unsecured. We hear a lot these days about “credit tightening”, and it is your market segment in real estate and business financing that has been most affected by this lack of flexibility in underwriting criteria. Best to check in and make sure the financing you are counting on is available, and plan ahead as you may find you don’t qualify for the amounts you could have qualified for in the past. The rules have changed a lot in the past two years!
See you at the closing table!
Karen Cooper – OR/CA Mortgage Consultant – www.Quality4Loans.com
For additional tips on How To Buy A Home In The Rogue Valley, Oregon, follow these links:
How To Buy A Home in the Rogue Valley, Oregon | Using Neighborhood Stabilization Program Funds
Do you need a good reason to take the step to get preapproved for your financing in order to purchase a home? How about 24 good reasons? How about finding out if you are eligible to receive $50,000 in Neighborhood Stabilization Program funding to help you buy a home?
These homes are Fannie Mae and Freddie Mac foreclosure homes in Medford, Oregon that are reflected as actively on the market (versus under contract) as per their websites. This list may not necessarily be up to date, since the homes in Medford that are priced under $200,000 are selling quickly right now. By choosing the right real estate broker to represent you, you will have a broker who will be able to get you up to date status and if they have familiarized themselves with the workings of the Neighborhood Stabilization Program, they'll be able to tell you which of these 24 bank owned foreclosure homes in Medford are eligible for up to $50,000 in down payment match/closing costs/repair funds/mortgage reduction. If you need a recommendation for one of the very few Southern Oregon brokers I know of who have made the effort to figure this program out, please call or e-mail me.
Here are 24 reasons:
|
Single-Family |
Just Listed |
3 br |
3 ba |
$399,900 |
|
Single-Family |
Active |
3 br |
2 ba |
$255,000 |
|
Single-Family |
Just Listed |
4 br |
2 ba |
$255,000 |
|
Single-Family |
Active |
3 br |
2 ba |
$234,000 |
|
Single-Family |
Just Listed |
3 br |
2 ba |
$219,900 |
|
Single-Family |
Just Listed |
4 br |
3 ba |
$209,900 |
|
Single-Family |
Active |
2 br |
1 ba |
$184,900 |
|
Single-Family |
Active |
3 br |
2 ba |
$160,000 |
|
Single-Family |
Active |
3 br |
2 ba |
$154,900 |
|
Single-Family |
Price Reduced |
3 br |
2 ba |
$154,000 |
|
Single-Family |
Active |
3 br |
2 ba |
$124,900 |
|
Single-Family |
Active |
2 br |
1 ba |
$83,000 |
|
510 NEWTOWN ST |
$89,900 |
8 |
3 |
1.00 |
|
1010 SUNSET AVE |
$94,500 |
8 |
4 |
1.50 |
|
3145 ALAMEDA ST 15 |
$119,500 |
7 |
2 |
2.00 |
|
3145 ALAMEDA ST 19 |
$121,500 |
5 |
2 |
2.00 |
|
3145 ALAMEDA ST 16 |
$124,000 |
4 |
2 |
2.00 |
|
643 PALM ST |
$127,500 |
7 |
3 |
2.00 |
|
1699 GRAND AVE |
$176,250 |
11 |
3 |
2.00 |
|
118 GENEVA STREET |
$187,500 |
12 |
4 |
2.00 |
|
489 FORELLE AVE |
$219,500 |
9 |
3 |
2.00 |
|
2160 CRESTBROOK 2 |
$220,500 |
7 |
3 |
2.00 |
|
1475 RAMADA AVE |
$229,900 |
11 |
3 |
2.00 |
|
932 BLACK OAK DR |
$243,600 |
11 |
3 |
3.00 |
The Neighborhood Stabilization Program funding is going to be released soon. Funding is limited, and I expect it will run out quickly. If you think $50,000 would make a difference in your home purchase, call or e-mail me today!
See you at the closing table!
Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com
Do you like the idea of living outside the hustle and bustle of the city? Is rural living the lifestyle you choose? There is a great home loan program that is right up your alley, called the USDA Guaranteed Rural Housing Loan Program. This is a government home loan program that may be used for eligible areas with population under 25,000 and away from a metropolitan area. For the Jackson County area of the Rogue Valley, this means eligible areas could be Ashland, Talent, Phoenix, Ruch and Jacksonville to the South of Medford/Central Point, or White City, Eagle Point, Shady Cove, Gold Hill or Prospect to the North. There are eligible areas in Josephine County, outside of Grants Pass, too.
The USDA Guaranteed Rural Housing loan program is a 30 year fixed rate loan. Unlike the FHA home loan programs, there is no upfront or ongoing monthly mortgage insurance premiums - just a one-time 2% guarantee fee at closing. Another difference between the USDA Guaranteed Rural Housing loan program and the FHA loan programs is there is no minimum down payment requirement – you may finance up to 100% of the purchase price AND the 2% guarantee fee AND closing costs if the appraised value for the home you are buying supports this.
The main highlights of the USDA Guaranteed Rural Housing loan program guidelines are:
|
As of April 20, 2009, the income limits for all non-high cost counties will be: 1-4 Person |
5-8 Person |
|
73,600 |
97,150 |
If you were thinking you would need thousand of dollars in order to buy your own home, think again. You will need to be prepared to write three checks, though – one for your earnest money deposit (figure maybe $500-1,000), the next for your whole house inspection (figure $350 for this one), and lastly your appraisal fee (figure $450). Both the whole house inspection and appraisal fee can be covered by a closing cost credit, so you very well could end up bringing ZERO money to the closing table if the parties agree. You still need to make sure you have the roughly $1,350-1,850 though, even if it is a gift from a family member.
This is a GREAT home loan program! What are you waiting for? The inventory of available homes for sale here in the Rogue Valley is shrinking rapidly in the lower price ranges. Call or e-mail today to get preapproved, or apply online at www.Quality4Loans.com.
See you at the closing table!
Karen Cooper – OR/CA Mortgage Consultant – www.Quality4Loans.com
For additional tips on How To Buy A Home In The Rogue Valley, Oregon, follow these links:
How To Buy A Home In The Rogue Valley In Oregon | Using The Neighborhood Stabilization Program
How To Buy A Home In The Rogue Valley, Oregon | If You Are A Self-Employed Borrower
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