Category Archives: Government Programs

Upcoming Changes to FHA Loans

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Unless Congress extends the expiration deadline, Federal Housing Administration (FHA) loan limits set in 2008 will drop significantly beginning October 1. Congress raised the loan limit amount in response to the housing crisis to help spur the home buying market.  FHA loans offer borrowers very competitive rates and terms, and they only require a 3.5% down payment. Allowable debt ratios are higher than the typical debt-ratio limits imposed for conventional loans, and there are no income limit qualifications, so more people can qualify for them.

If the loan limit drops on October 1, many California homebuyers will face higher down payments, higher mortgage rates and stricter loan qualification requirements. Borrowers seeking larger mortgages will have to apply for conventional loans or jumbo loans, which may be subject to higher interest rates and down payments. Here are four things you should know to help your clients now.

1. LOWER LOAN LIMITS

The conforming loan limit determines the maximum mortgage amount that FHA, Fannie Mae and Freddie Mac can buy or guarantee. If your client wants to stay under the current loan limits, then encourage them to purchase now and close by September 30th.

2.DROPS BY COUNTY

Under the new FHA loan limits, some counties will see significant drops in their loan limits. San Diego County will experience a $151,250 drop, Sonoma
County a $141,550 reduction, while Orange and Los Angeles Counties will drop by $104,250.

3.JUMBO LOANS

The current FHA loan limit is $729,750. After October 1, that limit may drop to $625,500. Mortgage loans higher than that amount will be considered
non-conforming jumbo loans, which typically have rates that are 0.875% to 1.5% higher than conforming rates, depending on the loan product, and require higher down payments.

4.MORE STRINGENT REQUIREMENTS

FHA loan requirements may allow for lower credit scores. So an applicant with a lower FICO score can still qualify for an FHA loan, even if they can’t for a conventional loan. Your clients may be able to obtain an FHA loan three years after defaulting or having a loan foreclosed.

Article by:  Sheri Negri, Realtor
www.loveforhomessac.com
Information Source:  CAR

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Homebuyers Assistance Program

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Many direct lenders are offering down payment assistance to aid in the purchase of a new home.  Where are they getting this money you ask?  They are getting this money through grant programs via the good old federal government.

With the combination of remarkable housing prices and record low-interest rates, now is the time to buy.  If you do not have the cash for a down payment, then the Home Buyers Assistance Program may be your way to home ownership!

 

CHF Platinum Program Specifics:

  • Down payment assistance
  • For the purchase of primary residence in CA
  • New or existing properties are eligible
  • Program is NOT limited to first-time homebuyers

The program is available for the purchase of an owner-occupied single-family residence, approved condo or planned unit development located in the state of California.

This program can be used towards the homebuyers down payment and/or closing costs on a 30-year fixed-rate fully amortized FHA, VA or USDA mortgage loan.

Posted by:  Sheri Negri
www.loveforhomessac.com

Keep Your Home Program

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CalHAFA expanded eligibility criteria of $2 billion for the Keep Your Home California Program to allow more homeowners to qualify this year to avoid additional foreclosures.

This program was designed for low or moderate income levels.  The income limits for Sacramento, Placer and El Dorado Counties are $87,700.  For other counties, check the Keep Your Home California website.

The following are brief summaries of the programs available under Keep Your Home California.   To see full program descriptions, click on the program name below.

Unemployment Mortgage Assistance Program (UMA) – Intended to assist homeowners who have experienced involuntary job loss. UMA will provide temporary financial assistance in the form of a mortgage payment subsidy of varying size and term to unemployed homeowners who wish to remain in their homes but are in imminent danger of foreclosure due to short-term financial problems. These funds can provide up to six months of benefits with a monthly benefit of up to $3,000 or 100% of the existing total monthly mortgage, whichever is less.

Mortgage Reinstatement Assistance Program (MRAP) – Intended to assist homeowners who have fallen behind on their mortgage payments due to a temporary change in a household circumstance. MRAP will provide limited financial assistance in the form of funds to reinstate mortgage loans that are in arrears in order to prevent potential foreclosures. These funds can provide benefits of up to $15,000 per household.

Principal Reduction Program (PRP) – Intended to assist homeowners at risk of default because of an economic hardship coupled with a severe decline in the home’s value. PRP will provide capital to reduce outstanding principal balances of qualifying borrowers with negative equity. Principal balances will be reduced in an effort to prevent avoidable foreclosures and promote sustainable homeownership. The principal reduction program will most likely be a prelude to loan modification. (Servicers that contribute through matching funds increase the benefit for homeowners).

Transition Assistance Program (TAP) – Intended to promote community stabilization by providing homeowners with relocation assistance when it is determined that they can no longer afford their home. TAP will be used in conjunction with a servicer-approved short sale or deed-in-lieu of foreclosure program in order to help homeowners transition into stable and affordable housing. Homeowners will be responsible to occupy and maintain the property until the home is sold or returned to the servicer as negotiated. Funds will be available on a one-time only basis.

For more information, go to the Keep Your Home California website:

http://www.keepyourhomecalifornia.org

Posted by:  Sheri Negri
www.loveforhomessac.com