Which property would you be more interested in?

Of course, this is the same home, shot by 2 different people.

Ran into this article which makes a great point about marketing houses on line.

According to the Article by Vivian S. Toy in The New York Times:

““Good photos will grab people’s attention and help you sell a home,” said Jacky Teplitzky, an executive vice president of Prudential Douglas Elliman Real Estate in New York. “Bad pictures will absolutely give you trouble, because you won’t have any calls on it, and nobody will come to see it.”

Worth a read, since as much  as 80% of buyers will spend some time shopping on-line during their buying process.

Read the whole article: Click Here

Enjoy!

Craig

As if things weren’t hard enough for existing homeowners, recent FHA changes have made it more restrictive for those looking to move. In a recent letter, FHA is saying if you own a home that you are going to rent out so you can buy a new home, you better be able to afford both payments.

Traditionally, you could use the rental income you would receive from a new tenant to offset the current house payment, to help you qualify for the new home. Recently FHA has seen an alarming trend of people who are buying new homes at discounted prices, and then letting go of their over-financed house afterwards. They are referring to this as “buy and bail.”

To combat this practice – which hurts overall housing because it contributes to another foreclosure on the market -they are only allowing rental income to be used when the borrower is vacating a home which has at least 25% equity. How do they know – the buyer has to pay for an appraisal in many cases.

So if you own a house and want to move into a new one, you need to either make enough to cover both loans comfortably, or you can use the rent to qualify you if your house has good equity in it (25% or more). In either case, though, you will likely be paying for 2 appraisals. Sheesh.

More than ever, do not assume your buyers qualify without getting them pre-approved with an experienced loan officer who will thoroughly analyze their situation and offer FREE Rock Solid Lender Submission Pre-Approvals. Don’t guess – call us 954-217-9518 or 877-8GO-GREEN

More FHA RULES posted on our FHA reference page here.

FHA loans – Easily the most widely available loan program for retail buyers to help them purchase their primary residence with a small down payment. FHA loans are more forgiving than conventional loans when it comes to credit and cosigners. There are of course limitations and these loans too have been getting harder to obtain. Bottom line – if you are selling a house right now you need to understand FHA Loans.

This page is intended to be a reference page for FHA Loans you can come back to to check for new updates. If you have any comments, questions, or suggestions, please leave a comment.

Borrower Qualifications:

Debt – To – Income Ratio 31%/43%

• 31% – The new house payment / Gross Monthly Income
• 43% – New House Pmt + Other debt / Gross Monthly Income
• Some exceptions made to stretch this if other “compensating factors” exist.

Income – Need good steady last 2 years of income. If trying to use a second job, it is preferred that the borrower have had a history of working the two jobs for 2 years. The minimum would be one year working 2 jobs. All income must be fully documented with pay-stubs and W2’s or tax returns.

Co borrowers – strong point of FHA loans. With minimal down payment a normally unqualified primary borrower (college student with no job, for example) can have his parents co-sign even though he has no income on his own. Conventional loans that have allowed this have traditionally required much more hefty down payments.

Credit – Traditionally there were no minimum credit score requirements, but recently they have been imposed by many lenders. 580 is where most are right now as a minimum. We have see n some set the bar at a 600 score recently even. There are a few lenders willing to go lower than a 580, but these would probably be unusual circumstances (i.e. – borrowers credit actually looks better on paper than the score would indicate.) Chances are if the score is less than 580, there are good reasons, and the borrower may need to work on their credit.

Most important thing with credit is the past 12 months history. Past issues with credit can be overlooked if explained well and circumstances are unlikely to reoccur. Some collections and charge offs can possibly be left open, especially those medical in nature.

Assets – 3% is the minimum cash investment by a borrower with FHA loans. Assets need to be verified on paper using bank statements. The 3% does not have to come directly from the borrower, however – it can be a gift from a relative or other acceptable source. Wherever it comes from a paper trail is needed. It cannot come from the seller – the recent housing bill eliminated programs such a Nehemiah, which allowed sellers to gift a down payment indirectly.

As of January the 3% is scheduled to be increased to 3.5% Sellers are allowed to contribute up to 6% of the purchase price towards the buyers closing costs. This makes FHA Loans the very cheapest way to buy a property right now for most buyers in depressed real estate markets. The conventional options require down payments from 5% or greater and only allow the seller to contribute 3% of the price towards costs.

Exception – HUD has a program to buy with only $100 down on select properties that HUD has foreclosed on. Find a home here and we can get your buyer in for $100. HOMES FOR $100 Down

Seasoning – Sellers must be on title to property for 90 days – PRIOR to signing a contract to sell the home to a buyer who is applying for FHA financing. So earliest contract can be signed is the 91st day. Most active investors are currently aware that the legislation that was passed regarding the waiving of this 90 day period was meant only to apply to those non-bank entities selling foreclosure properties on behalf of the banks. Does not apply to the individual investor. Read for yourself here: HUD Flipping Waiver

Appraisal issues – anything that will cause an appraiser to have to note a safety hazard certainly has to be fixed prior to funding on a regular FHA loan. If there are water stains in the ceiling, a roof inspection will be required. Findings on a roof inspection will need to be remedied prior to funding. Exception – buyer is using a variation on an FHA loan that provides funds to repair the issues after closing.

Condos- need to be approved – check here: FHA Approved Condos

Click here for procedure for getting a: Spot Condo Approval

Townhouses / PUDs – no longer need approval.

Loan Limits – check here: FHA Loan Limits

Well & Septic on property? Well Testing Requirements

• Surveyor should indicate distance from well to septic tank, property lines, and house (request should be made for this – do not assume they will do it)

Interesting, a little dated powerpoint presentation from HUD: click here

**NEW – FHA looking at your current home more closely.  If you currently own a home and want to buy a new one with an FHA loan, you used to be able to use rental income from the house you were moving out of to offset the payment.  Maybe not so anymore.  If you have less than 25% equity in your current home you can only buy a new home with an FHA loan if you can qualify with both the new house payment and the old, without using any potential rental income from the house you are moving out of.  And you will likely have to pay for an appraisal on the home your leaving as well as the home you are buying.

Will come back and update further. I know there are missing items here for the moment. If you have a particular immediate situation that you want to speak about feel free to call the office. 877-8GO-GREEN

Craig

I am slightly embarrassed to admit that I had never actually heard Warren Buffet speak prior to watching this interview. My only impression of him was as this mythological financial guru. His mastery of the most complex financial markets has made him a living legend.

Well, I was surprised to watch this video and find that he speaks in a way that is so clear and simple, a grade schooler could understand.

If you are an American, (or not!) you really should watch this video.

Craig Garcia in the Daily Business Review

Private lenders are generally funded by wealthy individuals, hedge funds and other large pools of private capital. Private lenders normally have less strict underwriting requirements than banks since they are not federally regulated. But that comes with a price paid in higher interest rates and shorter loan terms.

Daily Business Review: News Item

This is a snippet from an Article done by Polyana da Costa featuring your’s truly. I don’t yet have permission to mass distribute, but if you send me an email I can get you a copy of it.

Or you can take advantage of a free 30 day trial of the Daily Business Review and you can read the whole thing.

Tags: PrivateLenders, real estate, investor loans

Rehab Loans – They have been getting tougher to obtain, but they are still out there.

If you are a high quality borrower we have a lender doing a very attractive rehab loan.

For primary residences and investment properties.

Either Full Income Documentation or Bank Statements OK

We just helped an owner/builder close on a construction loan.  He was able to use the existing equity in his lot and get his construction loan with minimal money out of pocket.

This can work for good credit investors with stable income – so if you need to find a partner, we still have aggressive loans for rehabs.

You can use after repaired value (up to 80%) and only need 5% minimum cash investment.

This is NOT Hard Money – Rate on loan we just closed was 6% Interest – Only (Prime +1)!

Call 954-217-9518 today to see how this can work for you.

Tags: RehabLoans, Real Estate, Mortgages

It’s official.

The housing rescue bill that President Bush signed into law does some good things for housing, but it effectively kills some prominent Down Payment Assistance Programs aimed at helping cash poor buyers.

Down Payment Assistance Programs (DPA’s) are programs that offer help to home buyers who are lacking in down payment funds.  Some of these programs are available through local government agencies – and these are not the kind affected.  The kind affected by this legislation are those that allow the seller to contribute or fund the buyer’s down payment.

Two of the more popular programs of this type are the Nehemiah program and the Ameridream program. 

Most loan programs available to purchaser’s require the buyer to have some sort of cash investment when they buy.  Some programs (FHA for example) allow the cash investment to come completely in the form of a gift from a relative or non-profit organization. 

Nehemiah and Ameridream are two such programs that would allow the seller to contribute to their “pool” of down payment funds, which then offer a buyer of a property the necessary cash investment to buy a home without money coming from their personal funds. 

So a seller could sell their home to a buyer who had no money by using one of these programs.  It would in essence be a way for the seller to help the buyer buy their property without a down payment.  This is a great tool for buyers and sellers in a slow market.

Others would argue that it allows people to buy homes with no “skin in the game”.  While this is true, and there have been people abuse this, it still can help those who can afford to own, but who lack a down payment. 

Most people can still afford the next best thing, which is a 3% minimum cash investment on an FHA loan, but losing a good tool in a tough market, just seems like bad timing…

Craig Garcia is a Managing Member of Bridge Capital Lending, LLC. A mortgage and investment firm specializing in Investor Loans that Use Private Lenders that fund Hard Money Loans. Craig can be reached at 877-8GO-GREEN or 954-217-9518. Gene Schroeder and Angelo D’Alessandro are the founders and owners of Bank On It! – A Real Estate Investment Firm that sells Investment Properties at Wholesale Prices. Gene and Angelo can be reached at 954-515-0030. The three have also formed a service to connect prospective borrowers to a network of Local Mortgage Brokers called 888-2Lend-Fast.   

Tags: HUDLoans, Nehemiah, Down Payment Assistance

Go figure.

Banks are a mess. The government is trying to help, but lenders keep closing. Rates are getting worse even as the economy sinks…

Lenders are lending less, and less.

Even “blue chip” borrowers can’t get loans if they own too many properties.

Well an unlikely (or maybe not) source has opened the vault to good investors at ridiculously cheap rates.

Cheap? How does 4.5% Interest – Only sound?

And it’s only for investors.

Listen to what they are willing to do:

Blanket loans for multiple properties.

No limit on number of properties owned.

Collect payments every 90 days.

Most credit doesn’t matter – just mortgages.

No cash needed to purchase property.

Cross collateralize property in other countries.

Who in the world is willing to take such risks?

An organization who is the foremost authority in the world at managing risk – Lloyd’s.

It actually makes perfect sense.

Lloyd’s has been a leading international banking and business presence for years.

Who better than to understand and be willing to accept risk in a market few others are willing to.

Their magic number is 70%. Purchase or cash-out refinance. One property or multiple.

You do have to have sufficient income to qualify on paper – No Stated Income Whatsoever.

So if you have strong income and want to capitalize on the market in Florida, you may have a new financial partner. Their Pilot program is only being offered by a select number of lenders, which we have access to.

Call me today to see if the program works for you. 954-217-9518 x310

Craig Garcia is a Managing Member of Bridge Capital Lending, LLC. A mortgage and investment firm specializing in Investor Loans that Use Private Lenders that fund Hard Money Loans. Craig can be reached at 877-8GO-GREEN or 954-217-9518.

Tags: RealEstate, Loans, Refinance

Good Video from The Street I thought I would share.

Cramer talks about the relatively small number of new homes being built, and how that is one supply factor which is working in the right direction for housing to recover.   The other major supply factor that is still working against the recovery is the great amount of foreclosure.

Here is the link:

Tags: RealEstate, New Homes For Sale, Economy

HUD Loans – The investor community got excited (me included) when the news was released that the 90 day seasoning for sellers to be on title had been waived.

For those not familiar, FHA loans are a great tool for homebuyers who have less than perfect credit and little down payment.  There is not a comparable loan program today to help the average person buy their home with little down (especially in depressed real estate markets).

So while FHA loans are the perfect loan for a large segment of people, they traditionally have had a 90 day seasoning requirement for sellers.  What this means is that a seller of a property must own the property for a full 90 days before entering into a contract to sell it to someone who plans on getting an FHA loan to buy the property.  The only exception to this was if the seller was a chartered bank.

This was put into place to discourage “flip” situations where an investor would buy the property for a discount and then mark it up greatly in a short period of time.  While it can be argued that FHA should not be concerned about how much profit a seller makes, and you would have a good argument, the fact remains:

…at some point they noticed they had a higher number of defaulting loans on properties where there was a recent flip, then they did on the rest of the loans they were doing.  For whatever the reasons..

So those investors who took the risk upon themselves to buy a property at the courthouse steps, or otherwise and fix it up and put it for sale would tend to shy away from buyers who needed FHA loans to purchase because of this seasoning requirement. 

The waiver of this made big news in the investor community, because it appeared that now the bank waiver was opened up to help the industry move all of the foreclosure properties for sale. 

Well, not quite, it would appear…

Here is the link for the actual HUD document regarding the waiver.

Here is the crucial part:   

“Section 203.37a(b)(2) of the FHA regulations, 24 CFR 203.37a(b)(2), is hereby waived for a period of one year from today’s date with regard to sales of properties acquired by mortgagees, whether sold directly by the mortgagees or by their subsidiaries or by vendors to whom they have transferred titles to properties for the purpose of effectuating sales of those properties.”

Raises the question whether any foreclosing party and their agents can use this now, or just those banks that we had mentioned before….one thing we did confirm….if you are buying to fix and sell right away, you do not qualify for the exemption.  Rats…

More to come on the foreclosing lender aspect….

Craig Garcia is a Managing Member of Bridge Capital Lending, LLC. A mortgage and investment firm specializing in Investor Loans that Use Private Lenders that fund Hard Money Loans. Craig can be reached at 877-8GO-GREEN or 954-217-9518.

Tags: FHAloans, real estate, investment