Bill Kamboukos

FHA To Introduce Green Loans:

Additional Incentives For Energy Efficient Homes Coming

This past year the federal government has increased incentives for home energy-efficiency through increases in tax credits for solar panels, solar water heaters, geothermal heat pumps, heavy-duty insulation, windows, air conditioning and other similar home enhancements.

This appears to be the beginning of a much larger push by the government towards green housing. At the Department of Housing and Urban Development, a new generation of energy-efficient mortgages will soon be rolled out, starting with FHA loans that offer 5 percent larger mortgage amounts to people who plan to undertake energy-efficiency improvements.

Under these new loans, for example if you qualify for a $200,000 FHA mortgage to purchase a standard house, FHA lenders might now might be able to offer you $10,000 more upfront -- a $210,000 loan amount -- if the extra money is used to substantially lower the property's annual energy consumption.

Additional incentives are also being considered, including giving applicants credit on their qualifying incomes for a home loan in exchange for documentable savings in annual energy expenditures.

In addition, the House of Representatives has also passed a massive energy-conservation and emissions-control bill. Among other items, this bill contains a subsection devoted to creating incentives for consumers and federal agencies to build and finance more energy-efficient dwellings. This plan will include initiatives for:

- The FHA is directed to insure a minimum of 50,000 new energy-efficient mortgages during the coming three years. An energy-efficient house is defined as one in which energy consumption is reduced by 20 percent after renovations.

- Fannie Mae and Freddie Mac are directed to develop new mortgage products and more flexible underwriting guidelines to reward energy-conscious borrowers and builders.

Plans to also help establish a secondary market for energy-efficient and location-efficient mortgages for moderate- and lower-income homebuyers for conventional and FHA loans are currently being pushed. This new generation of loans would increase the qualifying incomes of applicants by at least one dollar for every dollar of projected energy savings from renovations, green construction or efficient design.

There are also many more complex elements to the proposed changes including initiatives to have these properties properly valued by appraisers, state government intervention and moving homes to a more energy efficient grid altogether and away from traditional energy sources that will be part of the future of "green" loans.

Some of these plans may take effect soon, while others may take much longer to roll out. However, it appears that the future will put an emphasis or at least some incentive on a "greener" home. As programs begin to roll out we will provide additional information and details.

For more information on mortgage programs, rates and information for potential and current homeowners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Government Considering Mortgage Aid For Unemployed

This past week, the Government has begun to consider new options to expand its mortgage help initiatives. The new plan being considered will be used to delay foreclosure for jobless homeowners who are unable to keep up with monthly payments.

Policymakers are contemplating options for loan forbearance for unemployed homeowners. Thus, allowing borrowers to delay, defer or skip payments, an upgrade from current plans that are somewhat currently available in the private sector.

With rising foreclosures still an issue, lawmakers did say such a plan will come with additional hazards. It could help more people struggling with the current economic difficulties, but it also could create perverse incentives that distort the housing market.

However, officials said such a program would be in keeping with other measures to help workers who have lost jobs in the current recession.

This plan is seen as a response to increasing loan modifications, but also an increase in mortgage delinquencies as well. As recent numbers suggest that loan servicers implemented 185,156 loan modifications during the first quarter of the year, up 55 percent from the prior quarter.

However, seriously delinquent mortgages, defined as loans that are 60 or more days past due, increased by nearly 9 percent from the prior quarter to 5 percent of all mortgages. Showing that there are still many homeowners in need of assitance.

Whether or not a plan like this will be added to the ever growing mortgage relief plans the government is currently backing is to be seen. As always we will provide information and analysis when further developments arise.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Fannie & Freddie - Easing Condo Requirements?

As we have previously addressed, this past year has seen increased changes to Fannie Mae and Freddie Mac's condo requirements policy. With the main issue being new increased standards in their new definition of warrantable and non-warrantable condos (in other words, loan that they will or will not guarantee).

As a result, recently lawmakers have come out and said that they want Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery.

In March, Fannie Mae said it would no longer guarantee mortgages on condos in buildings where fewer than 70 percent of the units have been sold, up from the previous 51 percent threshold. With Freddie Mac following suit recently as well.

In a letter to the CEO's of both companies, Representatives Barney Frank, the chairman of the House Financial Services Committee, and Anthony Weiner warned that a 70 percent sales threshold "may be too onerous" and could lead condo buyers to shun new developments, according to the paper.

The legislators asked the companies to "make appropriate adjustments" to their underwriting standards for condos.

In addition, Weiner said the rules have "had a real chill on the ability to get these condos sold," at a time when prices of condos have fallen enough to attract potential buyers.

In addition to the 70 percent sales threshold, Fannie Mae will also not purchase mortgages in buildings where 15 percent of owners are delinquent on condo association dues or where one owner has more than 10 percent of units, as the firm sees these as signals that a building could run into financial trouble.

Now, the ball is in the court of Fannie and Freddie who are said to be preparing a response to the lawmakers. Whether this will actually lead to any changes is yet to be seen, but we will certainly pass on any developments as they occur.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

90 Day Flip Rule - FHA & Conventional Loans

In today's real estate market we see many purchases that are properties which were recently foreclosed on and now being sold by the bank. This has been a reality of a market that has at times and in certain areas seen more bank owned properties as conventional home sales. As a result of the decline in prices we have also seen an increase in properties being bought by investors, often on a cash basis, cleaned up and then put back on the market for resale, very quickly. For these particular cases, what you may have heard as, as the 90 day flip rule, comes into play.

The Federal Housing Administration has for many years had a 90 day flip rule in place, to prevent the buy and quick resale of a home within 90 days. This past year, this rule was lifted and allowed for ownership change and immediate resale of a property in the case of a property being foreclosed on and resold by a bank. So although you may have heard that the 90 day flip rule had been lifted on FHA loans, it really does not affect any homes, except for those being foreclosed and resold by the bank.

On the other hand, you have conventional Fannie Mae and Freddie Mac backed loans. And although no 90 day rule exists for conventional loans, most, if not all lenders will have restrictions on properties that have been bought and sold within 90 days. In general, lenders will allow for the immediate purchase and resale of all foreclosure homes being resold by banks, just as in FHA. However, in the case of an investor acquiring a property and then trying to resale the property within 90 days for a price higher then it was purchased for (which is often the case in a "flip" transaction), this will not be allowed, as it will be considered a flip transaction.

What this basically means for purchasers of new homes at the end of the day, is that if the home has recently changed ownership, it is important to know why and how. If the property was foreclosed on and being sold by the bank you are fine. However, if the property was bought by a third party investor and resold right away, for a higher price, then you may not be able to obtain conventional or FHA financing on the home.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Government's Refinancing Program May Expand

This past week, there was news that perhaps the government's Fannie Mae and Freddie Mac refinancing program may begin refinancing mortgages with loan-to-value ratios above 105 percent as the Obama administration seeks to boost participation in its anti-foreclosure programs.

"We're actively considering how to structure a program that makes sense over 105 percent," Federal Housing Finance Agency Director James Lockhart said. He said a ratio of 125 percent "is a number" that's on the table, though "not necessarily the number we're going to end up with."

This would be an expansion of President Barack Obama's Home Affordable program announced Feb. 18, sought to help homeowners who may owe more on their mortgages than their homes are worth. No word was given at to when the loan-to-value ratio could be raised.

Home Affordable has been "seeing a slowdown" as mortgage rates increase, Lockhart said. The average rate on a typical 30- year fixed loan was 5.38 percent last week, according to Freddie Mac. The rate is up from a record low of 4.78 percent at the end of April.

The program applies to mortgages that meet Fannie Mae and McLean and Freddie Mac's conforming loan limits. That cap is $417,000 for some areas and as high as $729,750 for the 250 most expensive real estate markets.

Under the program, borrowers with loans owned or guaranteed by Fannie Mae or Freddie Mac who have loan-to-value ratios of 80 percent to 105 percent and aren't delinquent can refinance without buying mortgage insurance, or paying for more insurance than they already have.

Expanding the program to a 125 percent loan-to-value level may benefit additional borrowers that have loans backed by Fannie Mae or Freddie Mac. Fannie Mae and Freddie Mac own or guarantee more than half of the single-family mortgages in the U.S.

Lockhart also said yesterday that his agency, the companies' regulator, is looking at ways for Fannie Mae and Freddie Mac to help the so-called warehouse lending market, which provides financing to smaller, independent mortgage companies, amid a credit crunch.

While Fannie Mae and Freddie Mac are prohibited by law from lending directly to other firms, Lockhart said they may be able to provide the market some liquidity by committing to purchase multifamily and other loans.

As more information is released on this initiative and others we will continue to provide updated information as always.

For more information on consumer initiatives, home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com