HUD Offers REO Homes for $100 Down in Select States

HUD has approved a program aimed at putting foreclosed homes back into the hands of owner-occupant buyers.

In select states, from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home.

The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Standard FHA underwriting guidelines apply, and the sale must be for the full amount of the current list price.

The $100 down payment incentive program has been approved for two of HUD’s four national regions – the regions managed by the Denver Homeownership Center and the Atlanta Homeownership Center. HUD homes in the states listed, as well as the Caribbean are currently eligible for the program.

Denver Homeownership Center’s Jurisdiction:

•Arkansas
•Colorado
•Iowa
•Kansas
•Louisiana
•Missouri
•Minnesota
•Montana
•Nebraska
•New Mexico
•North Dakota
•Oklahoma
•South Dakota
•Texas
•Wisconsin
•Wyoming
•Utah

Atlanta Homeownership Center’s Jurisdiction:

•Alabama
•Florida
•Georgia
•Kentucky
•Illinois
•Indiana
•Mississippi
•North Carolina
•South Carolina
•Tennessee
•Caribbean

HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan.

Matt Martin, CEO of Matt Martin Real Estate Management (MMREM), says this is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA’s 203k offering.

MMREM is under contract with HUD to assist with disposition sales of its repossessed homes. MMREM handles properties throughout 16 states, or about a third of HUD’s REO portfolio.

With an FHA 203k loan, “buyers can find a property that needs some TLC, fix it up however they want to, and finance the whole thing for $100,” Martin explained.

“MMREM is excited to work with this recent initiative, in a way that it supports putting HUD homes back into the hands of homeowners,” Martin said.

In addition to $100 down instead of FHA’s typical 3.5 percent down payment, HUD says it will also cover up to 3 percent of the closing costs in most cases.

Information Courtesy of DSNews.com by Carrie Bay Retrieved on 10/27/2011 from this website:

Rural Buyers Can Get No-Down Payment Loans

Total Mortgage Services, a national mortgage lender, is offering rural home buyers 100 percent financing or closing cost assistance.

Through its new Guaranteed Rural Housing Loan Program, insured by the U.S. Department of Agriculture, the lender will offer low- and moderate-income residents living in rural areas (usually defined by a population of 10,000 or less or, in some cases, 20,000 or less) several affordable housing finance options:

•No down payment required.
•Closing costs can come from any source, including gifts.
•Competitive 30-year fixed rates.
•No monthly mortgage insurance premiums.
Borrowers can obtain a loan to purchase a new or existing home that is located in a designated rural area.

“The USDA home loan program is one of the most compelling mortgage products in today’s challenging mortgage marketplace and offers real solutions for rural borrowers, especially those in need of 100 percent financing or with lower credit scores," John Walsh, president of Total Mortgage, said in a statement.

To read more about eligibility requirements, visit the U.S. Department of Agriculture Rural Development Web site.

By REALTOR® Magazine Online - Retrieved on Aug 3, 2011

Sellers Sweeten the deal to attract Buyers

Need to give buyers some extra incentive to choose your listing over the large inventories of others? Sure, price will get their attention, but some incentives may be the extra motivation needed to get the deal to the closing table.

Here are a few common extras that are growing in real estate transactions.

Home Warranties
Home warranties, which can cover the repair or replacement of many home system appliances and components (such as air conditioner, water heaters, and more), can provide buyers with some extra confidence when purchasing a home. “Home warranties are appealing to buyers because they cover appliances and system components that a new home owner has no familiarity with,” says Lelia Chapman, vice president of field sales for American Home Shield. “Sellers benefit from offering a home warranty because it sets the home apart from the rest of the competition in today’s saturated market, often leading to faster sales at better prices.”

Seller financing
With tight credit nowadays making it difficult for some to get a loan, some sellers may even offer financing to get a deal closed. Seller financing, in which the seller is willing to hold the loan, has become more common. Seller-financing is generally offered at a higher rate that is capped at a few years and then requires the buyer to pay off the loan or find new financing. (Read more.)

Furniture
Furniture can be costly to move anyway so more sellers are offering some of their furnishings to sweeten home deals too. For example, if sellers are moving to a condo, in which lawn care is no longer their responsibility, throwing in that riding lawn mower may just be the extra incentive a buyer needs. Some home sellers also may even offer to sell some of the furniture to the buyer at a discounted price to earn a few extra bucks.

Creative offers
Some home sellers are getting more extravagant and creative with the incentives they are offering to buyers. Some have even offered a week’s vacation in Hawaii or thrown in a time-share ownership, which they wanted to unload anyway.

Source: “5 Ways to Sweeten a Home Sale,” AOL Real Estate News (June 29, 2011)

5 Questions to Ask When Evaluating Short Sales

“Mortgage lenders across America are eager to avoid foreclosures, and short sales can be an attractive option for clients and real estate professionals alike,” writes Bill Ervin, the national sales director of real estate relationships for CitiMortgage Inc., in an article at RISMedia. “Ask the right questions and you’ll be well on your way to a successful short sale.”

Here are some questions Ervin points out are important for real estate professionals to consider when evaluating a potential short sale for a client.

1. Who owns the lien according to the servicer?

2. What documents are required? For example, the transaction always requires a Letter of Authorization (which is from the client authorizing the real estate professional to speak on their account); listing agreement; purchase contract; estimated/final HUD Settlement Statement; and 2nd Lien Approval Letter.

3. Do all of the parties agree on the property’s value?

4. Has the seller signed a short sale agreement?

5. What are the major challenges the client may face in this transaction? (For example, are there subordinate lien holders or will the client be able to secure financing in time?)

Read more of Ervin’s tips for successful short sale transactions at RISMedia.

Source: “Don’t Fall Short: Follow This Path to Successful Short Sales,” RISMedia (June 29, 2011)

Bloomington Indiana Real Estate

Home buying advantages in the "slow" season
Winter is often considered a slower season for real estate. The demands of the holidays and less-than-perfect weather conditions typically lead to fewer listings and fewer buyers searching the market. The relatively quiet winter real estate market can actually be a great opportunity for motivated buyers for 3 main reasons:
Sellers who list their homes during this period are usually highly motivated. They may be relocating for work or may be in the process of purchasing a new home themselves. Whatever the reason, it’s likely that they are looking to sell the home more quickly than the average seller. This means they are more prone to accept lower offers or conditions more favorable to the buyer.
Fewer buyers means less competition. Though there may be a lower number of homes on the market, there are also fewer buyers fighting you for those listings. A slower marketplace keeps houses on the market longer and allows you to discover great properties.
Mortgage interest rates tend to be a little lower during the winter.
January is a great time to buy a home, but don’t forget that preparation is the key. There are still important steps to take prior to looking for a home. Research your credit history as soon as possible; this way you can clear up any discrepancies that could prevent you from getting a good loan. Once you feel your credit record is in order, contact a lender to secure pre-approval for a mortgage. Having pre-approval will let you shop this great market with confidence, and will mark you as an informed homebuyer. Remember that all sellers are looking for serious buyers, even if buyers are in short supply.
A professional buyer’s agent can help you begin your buying plan, guide you through the pre-approval process, and act as a skilled negotiator once you find the home you’re looking for. The New Year is an ideal time to purchase a new home. This may be the right opportunity for you!

Information Courtesy of RE/MAX of Indiana - Monthly newsletters.

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