John Tuggle

If qualified, April 30th, 2011 is the deadline to enter into a binding contract to purchase, Credit: $8000

Below are the benefits for members of the military and certain other federal employees:

• Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual's spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
• In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer's principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual's spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer's principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.

Question and Answer

Q. Are both spouses required to be overseas for the requisite time period in order to qualify for the 2011 extension to claim the credit?

A. Only one spouse must be overseas on official extended duty for the requisite amount of time for either spouse to be eligible for the 2011 extension of time to purchase a principal residence and claim the credit.

Related Items:

• First-Time Homebuyer Credit
• The American Recovery and Reinvestment Act of 2009: Information Center

Less Up Front From Buyers, Less Up Front From Sellers, More Per Month From Buyers -- Please voice your opposition to the Seller Concession Change!!!!

An overview of some of the changes for FHA coming this fall:

Higher monthly fees. The legislation allows the FHA to hike the monthly fee to as much as an annualized 1.5% of the loan balance, up from 0.55%, though initially it will go only to 0.9%. The initial fee was upped earlier this year to 2.25% from 1.75%, though the FHA has said it will bring it down to 1% with the higher monthly fee.

Even with the decrease in the upfront fee, increasing the continuing fee is expected to generate $300 million per month, "which would replenish FHA's capital reserves much faster than is possible under the premium authority" now, according to the quarterly report.

Better credit scores. In its 76-year history, the FHA has never required a credit score from borrowers, though the lenders typically have. That would change under a proposed rule that the FHA is expected to adopt.

The FHA would require borrowers to have at least a 500 score for FHA backing. At 580 and above, borrowers would be eligible for the 3.5% down payment. But those who fall between 500 and 580 would see their down payments jump to 10%. That, however, is still well below scores of 660 to 720 that most lenders look (Freedom Mortgage - John Tuggle, Senior Loan Originator - is still accepting 620 although some LLPAs may apply) for to accept only a 10% down payment.

For the FHA, "this change is dramatic," the quarterly report said. Among borrowers with scores below 580, loans 90 days in arrears, what FHA calls "seriously delinquent," have been three times as high as those for borrowers with scores above 580, the FHA said. Of the total FHA loan portfolio, some 6% are to borrowers who had scores below 580 at the time of origination, FHA Commissioner David Stevens told a House subcommittee in March.

Cutting sellers' contributions. This is the change that will have the biggest impact on borrowers, because it could nearly double their total upfront costs from the just the required 3.5% down payment to a total 6.5%.

Sellers have been able to contribute up to 6% of the price of the home toward the buyer's purchase. That was often done by paying some of the closing costs, such as the upfront FHA fee and other fees, amounting to about 3% of the purchase price. Sellers might also agree to pay from some needed repairs, sparing the buyers that expense.

As part of its proposed rule changes, the FHA wants to slice the seller's contribution to no more than 3%, which CMPS Institute's Nicholas said ups the buyer's ante to 6.5% in some cases.

The FHA contends that this change will weed out sellers who artificially inflate the sales price to create the concession. It also will bring FHA in line with industry standards. These are just the latest in a string of new policies that the FHA has imposed in the last few years and could lead to substantially fewer buyers looking for the FHA insurance, turning instead to Fannie Mae or Freddie Mae programs.

"Many of these reforms were long overdue as FHA did not respond effectively to changes in the marketplace that happened during the housing boom and the subsequent decline," Stevens told Congress.

USDA ~

~~ Development

United States Department of Agriculture

Rural Development

TO: Participating Lenders AUG 2 3 2010

FROM: Tammye Trevifio,Administrator

Housing and Community Facilities Programs

SUBJECT: Single Family Housing Guaranteed Loan Program

Funding Notice

Many of you may be aware of recent legislation in which Congress provided USDA with authority to resume operating the Single Family Housing Guaranteed Loan Program (SFHGLP) at no cost to taxpayers. This was done through a combination of authority to: increase the upfront fee up to 3.5 percent of the principal obligation; charge a new annual fee of up to 0.5 percent of the outstanding principal balance; and waive payment of any fees for low and very low income borrowers up to a certain amount of loan guarantees.

Rural Development expects to complete an interim enhancement to its electronic systems by mid-September to accommodate the increase in the up-front fee to 3.5 percent. When this interim enhancement is complete, Rural Development will process all Conditional Commitments issued after May 26, 2010, that had the proviso "subject to the availability of funds." These Conditional Commitments will be processed in the date order by which they were received by the agency. Also, after the enhancements are completed, Rural Development will resume issuing standard commitments without the special "subject to" condition.

In the meantime, Rural Development will continue to accept complete loan applications and issue Conditional Commitments subject to the condition in italics below. Lenders may close loans upon receipt of these conditional commitments, but will assume all risk until the Loan Note Guarantee is issued.

This Conditional Commitment is subject to the continuing availability of funds and thecompletion of Rural Development operation systems enhancements to implement guarantee fee changes made by Public Law 111-212, sec. 102 (7/29/10). When Rural Development operation systems enhancements are completed, the Agency will notify the lender, and the

Guarantee process will continue subject to al applicable Agency regulations and conditions

1400 Independence Ave, SW .. Washington DC 20250-0700

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

Committed to the future of rural communities.

'USDA is an equal opportunity provider, employer and lender."

To file a complaint of discrimination, write USDA, Director, Office of Civil Rights,

1400 Independence Avenue, SW., Washington, DC 20250-9410 or call (800) 795-3272 (Voice) or (202) 720-6382 (TOO).

Set forth in this Conditional Commitment. Rural Development will not reserve loan funds for applications in process during this timeframe. Lenders may close the loan as scheduled. The lender will assume all risk of loss for the loan until Rural Development obligates funds and the Loan Note Guarantee is subsequently issued. When the lender requests the Loan Note Guarantee, the lender must certify to the Agency, using the process provided in this commitment, that there have been no adverse changes to the borrower's financial condition since the date the Conditional Commitment was issued by the Agency. The lender will submit the appropriate guarantee fee at the time they request the Loan Note Guarantee. The Agency will not be able to issue the Loan Note Guarantee until these conditions are met and funding

is obligated.

Rural Development also is working on a more complete system upgrade to accommodate all provisions of the new law. We expect this full enhancement to be completed as early as possible next fiscal year. While the 3.5 percent up-front fee is sufficient at the current subsidy rate, we must be prepared to make adjustments in later years using the new authority for an annual fee to maintain a zero cost program. We appreciate your role as a lender in responsibly servicing loans in the SFHGLP portfolio and helping us maintain a successful program.

All Conditional Commitments issued for purchase loans under the authority described in this memorandum are subject to a guarantee fee of3.5 percent. A sample of the Conditional Commitment form, and its attachment, are both attached. The italicized language set out above will be added as an "other condition" on the attachment.

The waiver of fees for Low Income and Very Low Income borrowers that was authorized in Public Law 111-212, sec. 102, cannot be accommodated at this time. However, borrowers who meet the criteria may be eligible for USDA's Section 502 Direct Loan Program which currently has sufficient funding to meet the needs for the remainder of the 2010 Fiscal Year. Please consult with the closest Rural Development Office in your area for more information on the Direct lending process.

Based on current usage, sufficient funds should be available for the remainder of the FY to fund all guaranteed refinance loans at a 0.5 percent guarantee fee.

Today the US House of Representatives passed legislation that would extend the closing deadline for the Home-buyersTax Credit. The Senate has already passed a similar measure and this is the second time this year for the house to do so. If the US Senate can pass a conference bill the credit will be available to Closing Home buyersall the way through September, 2010. (The deadlinie to qualify for the credit of April 30th, 2010 will not be extended, this bill is for closing those transactions only)

Estimates are as high as 180,000 for loan applications backlogged in a system that became swamped by potential home-buyers trying to cash in on the tax credit that can be as high as $8,000 to a first time home purchaser. The vote was for a separate bill as previous attempts to remedy the bottleneck in the nations mortgage origination, processing and underwriting systems became mired in partisan politics as the measure was made part of more controversial legislation in the Finance Reform bill currently being debated on Capital Hill.

Although the measure is expected to pass there is some concern as to when. Most projections from Capital Hill are saying that even if it dosen't get done and made law by June 30th, it can be retroactive. The death of Senator Robert Byrd (West Virginia) may cause some delay. Sources are not sure to what extend if any.

"The slow down in approving mortgages is really no one's fault. We have an industry that has had to reduce staff nationwide do to the slowdown in applications and then it gets hit with a massive month of applications and then after that another slow down. There is no way you can fill staff for a couple of months so the eemployees left have to do all the work. These are not labor positions. These people are highly technical and specialized. Right now it is ruthless in the Lending industry" said John Tuggle, Senior Lending Officer for Freedom Mortgage Corporation in Georgia and Alabama.

Veterans (active and former) have been allowed special exemptions and in some cases may qualify for the First Time Homebuyers Tax Credit well into 2011. A VA lender can assist any military personel in the details and whether or not they qualify.

If the deadline is extended it may have a huge and settling effect on residential Real Estate for the next few months and could allow lenders to hire based on expectation for a few months instead of a few weeks. Stay tuned to "...As The US Capital Turns.."

The US Senate has amended a bill to give homebuyers who were under contract on a home purchase on or before April 30, 2010 an additional three months to close the transaction and claim the Federal Homebuyer Tax Credit. Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev. No extension to the deadline for qualifying for the credit (April 30th, 2010) was approved and Congress is not expeted to do so.

The nations mortgage lender backlong is at record levels due to industry staff reductions over the last couple of years along with the record number of contracts to purchase and mortgage loan applicatiions placed into process due to the end of the tax credit. The legislation was supported by the Mortgage Bankers Association and the National Association of Realtors.

Also in the legislation are provisoins to expand documentation requirements for the first-time homebuyer tax credit to require taxpayers to attach property tax bills, contracts, and other documentation to their tax returns when claiming such credit. These measures were sought by the Internal Revenue Service to assist in reducing fraudulent attempts to access the tax credit.

The US House of Representatives has already passed similar legislation and sources from both legislative bodies expect conference committees to complete and approve one compromise bill for the President's signature and enactment as law prior to the July 4th, Holiday.

(c) 2010 by John Tuggle. For Re-Print rights please email mrjohntuggle@msn.com