New FHA Condo Rules now in effect.

The FHA has always required that a condo be specifically approved for FHA lending. The government wants to make sure that the Condo Association is properly constituted and on a sound financial footing. Last year when high foreclosure rates started appearing in Florida and Arizona, FHA decided that all existing approvals needed to be re-certified during 2011.


Because FHA is such a big part of the mortgage market, Buyers and Sellers contemplating a condo transaction need to check the current eligibility of the property. This website shows all FHA approved condos including those with expired or pending approvals.


The renewal of an expired approval can be accomplished by certain authorized lenders.  The process is called DELRAP.  A renewal application sent directly to HUD is called HRAP. Condo Associations can also initiate a renewal but the process can be complicated.  Some Associations may be unwilling to incur the effort or expense.

Baltimore Flashes a "Buy" sign vs. Renting

The popular realty website Trulia.Com keeps track of rental rates and selling prices across the country. Periodically they rate markets whether renting or buying is more advantageous based on rents and prices. This is something we have written about in previous posts. Baltimore is now clearly in the camp of buying being a much better deal. Trulia reports that the average selling price in the Baltimore Area only 12 times the annual rent. This means that a  house that rents for $1,500 a month will sell for about $216,000. A, 90% mortgage on this house would have monthly payments, including taxes and insurance of about, $1,250.  Not only is this less than rent but there are tax advantages as well. Also, the monthly payment won't  increase like rent. To read a full report on this subject including a data map on the entire US, click here.

10 Tips for Surviving the Housing Downturn

CNBC, the business channel, has posted 10 tips for surviving the housing market and profiting from it in the meantime. This post on their website has a lot a useful advice and is well worth a read. I especially like the advice to those people wanting to move up; "Do it now!"  The price reduction on the new house probably exceeds that of your present home. You can actually benefit financially from the downturn. Read the entire post here: 

Federal Home Loan Bank offers Grants up to $7,500

First Time Buyers in Maryland can get a grant up to $7,500 from The Federal Home Loan Bank in Atlanta for the purchase of a primary residence. Certain conditions must be met:

• Applicants must complete home ownership counseling.
• Sellers can help with closing costs.
• The underlying mortgage will be a FHA or USDA loan.
•  Buyer must bring $500 or 20% of the grant amount, whichever is greater.  
• Buyer must agree to remain in residence for 5 years or partial recapture of the grant will apply.
• Family income cannot exceed 80% of the areas median income. ($82,200 in Baltimore County).

Only a limited number of lenders are offering the program and funds are limited. Call Bob McGee at Advance Realty Timonium at 410-560-4574 for info on qualifying income in other counties and the name of a participating lender or email me at bobmcgee2000@gmail.com.

Government Offers Attractive Financing on Foreclosed Homes

Fannie Mae, the giant mortgage lender that was taken over by the government last year, is awash with foreclosed property that it needs to liquidate. It has announced a new loan program for foreclosed homes that it owns that has some unique features:

1. Homes are listed at a price designed to result in a quick sale.
2. Many homes are in excellent condition and require little or no work.
3. Low down payment of 3%
4. Up to 3.5% closing cost help from Fannie Mae
5. No appraisal required.
6. No mortgage Insurance.
7. The contract price is negotiable.
8. The 3% down payment can come from a gift or grant.
9. Only $500 deposit money at contract.
10. Additional funds available for light renovation if needed.
11. Prospective owner occupants are given a 15 day “First Look” after the property is listed. 

 

Monitoring, Improving and Repairing your Credit for the Purpose of Obtaining a Home Mortgage

In the aftermath of the mortgage meltdown, the management of your credit profile is more important than ever.  The standards for the approval of all forms of credit have tightened necessitating that consumers pay close attention to their credit records and credit scores.

What is a Credit Score:  Sometime called a FICO score, this is a mathematical number that is computer generated that attempts to measure the degree of risk associated with your creditworthiness.  There are three competing credit reporting agencies and each has their own unique algorithm but the mechanics of each is very similar.