Can I use the HomePath Renovation Mortgage to finance a condo? You can use a HomePath loan to fund a condo only if the condo is a Fannie Mae foreclosure and is HomePath eligible. You cannot use a HomePath Renovation Mortgage to add improvements to a condo unless the condo qualifies for that program. Condos eligible under the HomePath Renovation Mortgage will have the logo displayed next to it on the HomePath website or will reference it on the listing.
A HomePath Renovation Mortgage allows Buyers to finance the purchase price and repairs up to 35% of the "as repaired" value or $35,000 whichever is less, in one loan. Unlike the regular HomePath loan, an appraisal is required on the HomePath Renovation Mortgage. Buyers can select the contractors for repairs. However, contractors must be licensed. Most lenders offer this loan primarily to owner occupants.
The HomePath and the HomePath Renovation Mortgages are two special products offered by Fannie Mae to market their inventory of foreclosed homes. The purpose is to minimize the impact on the neighborhood and sell the home quickly. They are valuable programs that offer special financing incentives; however, buyers of properties that are not eligible for HomePath can still finance the purchase using FHA or regular conventional loan. If the condo subdivision is FHA approved and you are purchasing the condo as your primary residence, you shoud look into the FHA 203k loan, which will allow you to include the costs of the interior improvements and repairs.
Nadine Cius's Blog
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What is a Mortgage Credit Certificate (MCC)? A mortgage credit certificate (MCC) is an affordable housing credit program designed to assist low and moderate income homebuyers. Mortgages are financed using a conventional or government-insured loan. All applicants must meet the credit and underwriting criteria set by the participating Lender originating the loan, in addition to the MCC program guidelines. The borrower may take a tax credit in an amount equal to the annual amount of interest paid on the mortgage loan multiplied by the Mortgage Credit Certificate Rate.
The Mortgage Credit Certificate Rate for the Harris County Program is 30 percent. For example, an applicant with a $100,000 mortgage and a 4.0% interest rate could realize the following federal income tax savings (Based upon a 30-year mortgage with equal monthly installments of principal and interest):
Mortgage Amount: $100,000
Interest Rate: 4 percent
Monthly Payment: $400
Total Interest Paid First year: $ 4,800
(Mortgage Credit Rate) x .30
$4,800 x .30 = $1,440
During the first year of the Program, the borrower in above scenario would be eligible for a tax credit of up to $1,440. The amount of the credit actually claimed on the federal income tax cannot exceed the amount of federal income taxes due, after other credits and deductions have been taken into account. Any unused MCC related tax credit can be carried forward up to three years to be applied against future income tax liability. Additionally, all or a portion of the MCC related tax credit may be subject to recapture if the Residence is sold within nine years of purchase.
Are there any special programs offering foreclosure help for military service members? USA Cares provides financial and advocacy assistance to post 9/11 active duty US military service personnel, veterans and their families. They provide assistance in critical areas not covered by government programs. The intent of the assistance program is to help military personnel avoid foreclosure. The financial hardship must be due primarily to their recent military service. They assist all branches, all ranks and components and treat all with privacy and dignity in appreciation for their service and sacrifice.
The first step for the military service member (or family member) facing foreclosure is to contact USA Cares and open a case. The member is then referred to a Home Preservation-approved housing counselor who develops a household budget to determine whether the home is affordable in the long term. The counselor will review the entire case, including SCRA (Service members Civil Relief Act) benefits and other military rights that may have been overlooked by the lender or homeowner. USA Cares will use the following key criteria to determine eligibility for assistance:
1. At least one immediate family member must have served post 9-11.
2. At the start of the military service family finances were stable (mortgage, and other basics were no more than one month behind) and the home was affordable.
3. A decrease in household income and/or increase in expenses happened because of the military service, causing the mortgage to be at risk.
Assistance payments made by USA Cares will be made directly to the lender on behalf of the homeowner and will result in either the loan being reinstated to current status or the loan being placed on a long-term affordable repayment plan or loan modification with the lender. Maximum lifetime gift per family is $7500 (exceptions can sometimes be made). The service is free. USA Cares never charge fees nor accept repayment. They rely on donations from private citizens, businesses and foundations for all funding. If you are a military service member or an immediate family member facing foreclosure, please click here for additional information or to open a case.
Who is eligible for the Homes for Heroes Program? The Home for Heroes Bond Program is a Texas State Affordable Housing Corporation (TSAHC) down payment assistance program. Any certified or licensed full-time paid firefighter, peace officer, county jailer, EMS personnel, public security officer and corrections officer employed in the State of Texas is eligible. Curently, the program offers a 5% grant of the total loan amount for down payment at a 4% fixed rate. Following are additional requirements applicants must meet:
1. Must reside in Texas at the time of application
2. Occupy the purchased home as primary residence
3. Meet the income and home purchase price limits
4. Meet standard mortgage underwriting requirements demonstrating credit worthiness
5. Attend a HUD approved First Time Homebuyer Class
Home purchased using this program must be kept for a minimum of 10 years. If the home is sold within the first 9 years, the Income Tax Recapture Provisions will apply. The program is on a first come first serve basis and cannot be combined with the Mortgage Credit Certificate (MCC) program. Available funds and interest rate are subject to change. Please contact me for more information about this or other down payment assistance programs available in the State of Texas.
Can a Loan Originator charge me an application fee? A Loan Originator (LO) can charge you an application fee only after you receive a Good Faith Estimate (GFE) and indicate that you want to proceed with the loan. HUD's Regulation X provides that the only charge that a LO may impose on a potential borrower before issuing a GFE, is a charge limited to the cost of a credit report. Therefore, a LO may charge only the actual cost of a credit report (i.e. if the LO's cost for a credit report is $15.00, the LO may only charge the applicant $15.00).
The LO cannot charge, as a condition for providing a GFE, any fee for an application, appraisal, inspection, administrative or other similar services. Only after a loan applicant receives a GFE and indicates an intention to proceed with the loan covered by the GFE, may the LO collect fees beyond the cost of a credit report.
There are LOs that will attempt to collect fees from you prior to you receiving a GFE, because they know it's harder to switch lenders once you have paid out a lot of fees. However, you should in no way pay any fee besides a credit report fee, until you have a GFE and agree for the LO to do the loan.
HUD's Regulation X pertains only to residential mortgages. Commercial mortgages are exempt from this rule.
Should I trust the offer received from a loan modification company? According to the Better Business Bureau, mortgage modification scams made the list of "Top Ten Scams of 2011." Fraudsters are targeting distressed homeowners with all kinds of proposals & solutions that are very convincing. Instead of actually helping the homeowner, they will leave the homeowner in total ruins or a lot worst off than when they started.
In December 2010, The Federal Trade Commission (FTC) issued its final rule of The Mortgage Assistance Relief Services Rule, which bars companies & others (except attorneys) from charging upfront fees for mortgage relief or mortgage modification. The FTC rules states the following:
1. It's illegal to charge upfront fees. You can't collect money from a customer unless you deliver - and the customer agrees to - a written offer of mortgage relief from the customer's lender or servicer.
2. You must clearly and prominently disclose certain information before you sign people up for your services. You must tell them upfront key information about your services, including:
o the total cost,
o that they can stop using your services at any time,
o that you're not associated with the government or their lender, and
o that their lender may not agree to change the terms of their mortgage.
Even after this consumer protection rule became effective, homeowners are still falling prey to a number of schemes from unscrupulous companies or so-called investors. Some make false claims that they can help stop foreclosures, offer you a bailout while others want you to sign over your home. Be extra careful. If you are unsure of an offer, contact a HUD approved agency for assistance or have a real estate attorney or a Realtor that specializes in distressed homeowners to review it. Never sign over your home or any blank forms or pay any upfront fee for assistance.
What qualifies as a hardship in a short sale? Many sellers start to think about a short sale when they are unable to sell their homes for the price that they had hoped to get. Unfortunately simply being upside down on your home or being unable to sell for the price you want or being unable to lease for a rate that covers your mortgage or wanting to move from the suburbs to the city doesn't qualify as hardships. In order to obtain a short sale, there has to be a legitimate hardship, such as unemployment, pay cut, divorce, death, illness, bankruptcy or other dramatic change in your circumstance that prevents you from meeting your mortgage obligation.
The lender will want to see copies of your financials(tax returns, paystubs, and bank statements) to make sure that you can no longer pay for the mortgage and that you have a legitimate hardship. You will need to submit a letter explaining why you have stopped making payments and why you can't pay the difference due upon the sale. If the lender finds that you can make the mortgage and/or that you have sufficient assets to cover the difference, then your short sale will not be approved.
Should I finance home purchase with a VA loan or a Texas Vet loan? As an eligible veteran, besides comparing rates & fees when trying to determine whether to finance a home purchase using a regular VA loan or a Texas Vet loan, you should also consider the following:
1. Are you a legal resident of Texas? You must be a legal resident of Texas for at least twelve consecutive months immediately prior to filing an application or have listed Texas as the home of record at the time of entry into the military, or be on active military duty stationed in Texas, and have change your state of legal residence to Texas.
2. Is the property located in Texas? A VA loan is available to any veteran that qualifies and for any property in the US. It does not matter what state you live in. The Texas Vet loan, administered by the Texas Veterans Land Board (VLB), is available only to qualified veterans buying in Texas. The program is available to benefit Veterans in Texas and those that want to reside in Texas when leaving active duty.
3. What is your loan amount? If your loan amount is greater than $325,000 then your choice is a regular VA loan. Maximum Texas Vet loan is $325,000. VA guaranteed loans do not have a maximum dollar amount; however, lenders who sell their VA loans in the secondary market normally limit it to $417,000 for loans with zero down and a maximum of $1,000.000 for loans with down payment in Texas.
4. Do you currently have a VA loan? Texas Vet loan programs are State of Texas programs and are not associated with the federal VA; therefore, if you currently have a VA loan that has not been repaid in full, you may still be eligible for a Texas Vet loan.
5. Do you currently have a Texas Vet Loan? Veterans are entitled to have only one loan in each VLB program at the same time. Any other active VLB loans in programs other than the one for which application is being made must be in good standing.
6. Is the property new construction? The VA does not have any additional requirements for new construction. The Texas Veteran Land Board requires that all new construction be Energy Star Labeled and Certified.
7. How long are you planning on residing in the home? The VLB requires that the home must remain the veteran's primary residence for a period of at least three years. In the event the veteran fails to comply with these requirements, the VLB may require the acceleration of all money due on the VLB loan or the escalation of the interest rate on the program loan to prevailing market rates.
Finally, consider how much time you have to close on your purchase. The VLB loan takes a bit longer to close than a regular VA loan. Typically, one can close a VA loan within 30 days. A VLB loan can take up to 60 days to close.
Can I refinance my home for less than the current mortgage? It is possible to do a short payoff and refinance for less than the current mortgage. On August 6, 2010, HUD issued Mortgagee Letter 2010-23, to allow borrowers who owe more on their mortgage than their home is worth, opportunities to refinance into an affordable FHA loan. This was an enhancement to the existing Making Home Affordable Program (MHA). This short refinance allows borrowers who are current on their mortgage to qualify for a FHA refinance loan, provided that the lender or investor writes off at least 10 percent of the unpaid principal balance on the first lien. The short payoff serves as payment in full.
This is available for loans with FHA case numbers issued and closed on or before December 31, 2012. In order for a loan to be eligible, the following conditions must be met:
1. The homeowner must be in a negative equity position;
2. The homeowner must be current on the existing mortgage to be refinanced;
3. The homeowner must occupy the subject property (1-4 units) as their primary residence;
4. The homeowner must qualify for the new loan under standard FHA underwriting requirements and possess a "FICO based" decision credit score greater than or equal to 500;
5. The existing loan to be refinanced must not be a FHA-insured loan;
6. The existing first lien holder must write off at least 10 percent of the unpaid principal
balance;
7. The refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent;
8. Non-extinguished existing subordinate mortgages must be re-subordinated and the new loan may not have a combined loan-to-value ratio greater than 115 percent.
In addition to the above, there are some other criteria that have to be weighed in for this short refinance program to work; therefore, those who believe they qualify should contact their existing servicing lender. articipation is strictly voluntary on the part of the lender and requires the consent of all lien holders.
What is a CDPE? The CDPE (Certified Distressed Property Expert®), is a designation earned by a trained real estate professional on foreclosure prevention. As a CDPE, I have a thorough understanding of the complex issues facing the real estate industry and can provide solutions, specifically short sales, for homeowners facing market hardships.
Homeowners regularly proceed without guidance through the often financially and emotionally devastating prospect of foreclosure. Speaking with a well-informed, licensed real estate professional is the best course of action for a homeowner in distress. Through comprehensive training and experience, I have the tools to help homeowners find the best solutions for their unique situations and to avoid foreclosure through the efficient execution of a short sale.
Living through financial difficulties will pose a challenge for any family. My expertise in this area can help make a complicated situation a lot easier. If you or someone you know in the Greater Houston Area, are facing the prospect of foreclosure, please contact me to discuss your options.
