Buying & Selling Real Estate in Today's Market

No Down Deposit Progams

2008-06-10T00:15:00.004-04:00

Well, I had a situation with a Buyer which led me to do research and research and research until I hit the jackpot. Guess what?

NEWS UPDATE!

There are still zero down home buyer programs!

BUYERS - This may be your last chance to buy with no down deposit, low fixed interest rate and closing costs wrapped into the loan.

SELLERS - Gain more traffic and a quicker sale

Call or email us today before it ends

The Nehemiah Progam

Here are the reasons why Nehemiah is an industry leader:

Reputation - Oldest and largest privately funded down payment assistance program in the nation.

Reliability - Unwavering financial strength to meet our funding obligations and charitable mission. The money is there on time, every time!

Regulatory Compliance - Unparalleled "best practices" provides peace of mind in selecting your down payment assistance provider. Strict adherence to government regulations and HUD approved.

Ever since the mortgage meltdown last fall, it’s been harder and harder to qualify for a loan to buy a house. Even worse, the days of 100% financing and second mortgages are gone. I don’t know too many people who have enough cash lying around they could afford to put 10-20% down on a house, even if they could get approved for a mortgage. Prices have come down a little, but not that much.This is where The Nehemiah Program comes in. The Federal Housing Administration (FHA) allows home sellers to provide your down payment for you in the form of a gift - if it is funneled through the Nehemiah Program.

How does it work?

Before you and your agent go shopping for a house, sit down with a lender to determine your price range. Ask your lender how much you can expect to pay in closing costs and how much will be required for your down payment. These two items together will often be 6% of the purchase price of your house.

If you don’t have enough money to cover the closing costs and down payment, ask your lender if the Nehemiah program is right for you. There is some additional paperwork involved when you make your offer on a house, but your real estate agent will help you navigate through all of that.

Some loan assistance programs have income or geographical requirements, but not this one - which is why it’s such a great opportunity for people who dream of home ownership in this market and economy. Visit The Nehemiah Program Web site.

Did someone say no money needed? Yes, no money from the buyer.

There are several non-profit programs out there that allow for some type of assistance to the buyer. Nehemiah is one of the largest non-profit organizations that allows the seller to give money for the down payment and closing costs.

This program is approved by FHA which is part of HUD. Nehemiah can basically get a consumer into their dream home with no money out of pocket. FHA states that you must have 3% of your own money into the deal. And FHA typically asks for 2.25% as your down payment, which is included in the 3% total. This means that you would need to pay an additional 3/4%. But FHA also allows you to receive a 100% gift that can be used for both your down payment and closing costs. This gift can come from either a family member and or a non-profit organization.

Nehemiah allows for the seller to contribute up to 6% of the purchase price which can be applied towards the buyer's down payment and closing costs as mentioned above. They charge a $499 flat fee for this service. This fee can be paid by the seller, buyer, or even the lender. You can also combine that 6% with the seller contributing another 6% as seller contribution.

What takes place is that the seller gives Nehemiah the money which turns around and gives that money to the buyer as a gift. These gift funds can be for first time home buyers and even repeat buyers. There is no income limitations or geographical restrictions. And the thing is that you don't even have to repay the money, hence the reason why it's called a gift.

Overall, the only thing that needs to happen is to be approved by your lender for the FHA mortgage and for the seller to contribute the funds. And what is great about FHA is that they allow for 6% seller contribution. Another reason on how you can get into your dream home with no money out of your pocket. Between Nehemiah and the seller contribution, you could be in that house with as little as zero money.

Why are FHA loans such a vital force in home ownership?

No credit score requirements

Minimum down payment of 2.25% (this can slightly vary depending on your loan amount)

If the loan doesn't get approved in the system, it can easily be manually underwritten.

You don't need standard trade lines of credit on your report. You can have 3 to 4 pieces of non-traditional credit. i.e., *if you could show 6 months worth of car insurance payments. *show utility payments *cell phone payments (anything that you can show 6 to 12 months worth of payments, but on time.Case by case, but closer to 12 months.

The underwriter usually wants to see at least a 12 month clean credit history. You can still have isolated lates in less than a year, with good explanations.

Monthly mortgage insurance. No matter how much you put down, it's a standard .5% monthly amount across the board. Conventional loans have different increments depending on your down payments.

FHA has raised their cash-out LTV to 95% in the last year. Conventional will only go to 90% of your value.

Higher qualifying ratios of 31/43. With compensating factors, they can be manually underwritten up to a 50% back end ratio. Conventional is typically 28/36. Unless approved within the system, sometimes higher.

The rates are the same as conventional programs. When using the Nehemiah program or any other non-profit companies in conjunction with FHA financing. Underwriters discretion -- they will usually want to see a little cleaner file because you usually won't be investing any of your money into the transaction. They usually want to see little better credit scores, closer to 600. Now, you can have lower credit scores, as long as your credit history has been in good status in the last 1 to 2 years. The reason for this is because there have been more foreclosures recorded who have used these types of programs.

After reading all of this, you might ask, what's the catch. All of this sounds too good. One negative aspect of FHA financing is that there is a maximum loan amount allowed in each county. Those loan amounts can be found here. (Essex County (Lynn, Saugus, Salem, etc.) Massachusetts is about $523,000 maximum for a single family)

https://entp.hud.gov/idapp/html/hicostlook.cfm

About Nehemiah Corporation of America

Founded in 1994, Nehemiah Corporation of America, http://www.nehemiahcorp.org, is a Sacramento-based nonprofit organization committed to empowering lives and enriching communities nationwide. Nehemiah transforms lives by increasing homeownership opportunities for diverse populations, while maintaining its commitment to successful, responsible homeownership. Nehemiah transforms communities by expanding its faith-based, charitable and community development initiatives into underserved neighborhoods across America. In 1997, Nehemiah launched its flagship program, The Nehemiah Program(R), to provide down payment assistance to homebuyers. To date, Nehemiah has provided more than $650 million in down payment assistance gifts, resulting in $20 billion in real estate transactions and has helped over 175,000 families and individuals achieve their dream of homeownership. Committed to comprehensive community reinvestment, Nehemiah has fostered partnerships with Habitat for Humanity, HomeAid America and the US Conference of Mayors. In addition to providing down payment gift assistance, Nehemiah has created other programs that work to enrich communities including: Nehemiah Community Reinvestment Fund, Nehemiah Community Foundation and Nehemiah Urban Ministry Initiatives (NUMI).

The Nehemiah Program ® can help you sell your home faster, with less inconvenience, and at a potentially greater bottom line.

What is The Nehemiah Program and how does it work?

The Nehemiah Program provides gift funds for down payment and closing costs to qualified homebuyers who use an eligible loan product such as an FHA insured mortgage or conventional loan. Gift funds up to 6% of the final contract sales price are available for the purchase of a participating home. These gift funds never have to be repaid. There are no buyer income limitations and no area restrictions. For the buyer to be eligible for the gift, the seller must make a contribution to Nehemiah Corporation of America that is equal to the gift amount, plus pay a small processing fee.

How can The Nehemiah Program help me sell my home?

The Nehemiah Program will provide your property with INCREASED EXPOSURE! It's that simple! You will be exposing your property to a much larger pool of buyers who can now purchase your home because they have money for a down payment and closing costs.

Does it cost a SELLER more money to use The Nehemiah Program?

No. When you review transactions that use The Nehemiah Program you will usually find that sellers' net proceeds are equal to or greater than proceeds from traditionally negotiated offers. If a seller's net proceeds are not satisfactory, they will usually not sign the purchase agreement.

What's the number one reason why Sellers choose

The Nehemiah Program to assist with their home marketing plan?

Sellers choose The Nehemiah Program to dramatically increase the number of qualified candidates that would be eligible to purchase their home. The simple factor of "supply and demand" goes to work for participating sellers to help increase their home's market value.

Don't Reduce the Price...Introduce The Nehemiah Program. Participating with The Nehemiah Program is much preferred to costly price reductions. If your home has been on the market for a while and you are considering reducing your price to generate some new buyer interest, you may want to enroll your home in The Nehemiah Program® instead.

LATEST UPDATE ON APPLICATION FEE INCREASE

For those of us that have been using Nehemiah down payment assistance we got some bad news.
Many of us that have been using the program for several years have had premium pricing as low as $199 per transaction. Nehemiah just released 5/22/08 that the processing fee for lenders will be $499 for previous lender clients and $599 for new lender relationships.

Here is what they say is the reason for the pricing change...

1) "As our business has increased over the last few months, our cost of capital has actually increased. Therefore, we need to charge more per deal to cover this increase in cost. Although we are a non-profit; we do need to make a certain average dollar amount per deal to continue our business. This increase not only takes care of our cost of doing business, but also covers the cost of the marketing materials we make available to you and allows us as a 501c3 non-profit to give back to the housing community.

2) Over the last few months Nehemiah has been fighting to keep the industry alive; most of my competitors cannot say that. Nehemiah's fight continues even now as we attempt to get our message across to our Congress. This battle with HUD and Congress to keep the industry going takes financial resources. This increase in fees will assist Nehemiah in continuing our fight, and hopefully allows Nehemiah and the Down Payment Assistance Industry to continue providing gift funds to home buyers across the Midwest and the entire country for years to come."

This change will take place at midnight on June 6th. Therefore, if you have purchase agreements written at the old fee structure, PLEASE BE SURE TO ENTER THEM INTO THEIR GIFT REQUEST SYSTEM BY MIDNIGHT ON JUNE 6th (even if it means changing the title company and closing date later). As of June 7th, the new fee structure will be in place, and they will not be able to make any exceptions.

HELPFUL LINKS

http://www.fha.com/program_nehemiah.cfm

http://www.getdownpayment.com/index.asp

June 9, 2008

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The Importance of Getting your House Ready to Sell

2008-05-24T15:00:00.008-04:00

In today's market, getting your house ready to sell is more important than ever. Supply is high, but demand is not.

The condition of your home will affect your asking price, the time it sits on the market looking for a buyer, and most importantly, the final sale price.

Keep in mind, a negative first impression will not result in a second chance. Do yourself a huge favor and DO NOT show your home or put it on the active market until the house is READY.

Many times, Buyers will, either alone or with their Agent, simply drive by several addresses to create a list of a few houses for sale that will result in appointments.

Start with the outside of your home. You NEED Buyers to WANT to come in and see more. You must maximize your Curb Appeal:

Make sure that there is no trash, leaves or debris anywhere in sight;
Cut the lawn, plant some flowers or put out a hanging plant;
Stand in front of your home and take everything in - do you need to touch up the paint on your front door; organize the kid's toys; fix a fence picket; repair a broken pane of glass; paint the front stairs, fill in a crack in the walkway, etc.

Next hurdle, the inside. Most Buyers do not have "vision", they cannot "see" the potential of a home. They say they can, but they really can't. Once they get to your home, you want them comfortable, not trying to imagine what your teenager's black painted -rocked out bedroom will look like in a neutral color. Don't leave anything to chance.

In my experience, there are 4 crucial issues you must address:

Clean your home until it sparkles. I mean a deep cleaning - windows, closets, basement, bathrooms, appliances, carpets, floors (even under the refrigerator);
Remove the clutter, excess furniture and unessential possessions. Minimal is better. Rent a storage unit if you must. The goal is to sell your home quickly and for the most money possible.
Address or Repair all the small stuff - the missing cabinet handle; that piece of floor tile that broke years ago; the missing light switch cover; missing light bulbs; a broken towel rack; the leaky faucet, etc. You do not want Buyers even attempting to make a mental list of repairs, they'll lose track and interest fast or low ball their offer;
Neutralize and de-personalize your home. Walk room to room and address what could stand out negatively to a Buyer - loud paint colors; an entire wall of photos and trophy's; mismatched furniture (use a cheap slip cover or crisp sheet); wild leopard curtains, etc.

Make your home easy for Buyers to walk through room to room and take in the HOUSE not your THINGS.

Finally, have a friend over and ask them to play the role of a Buyer and give you a final critique.

What is a Short Sale?

2008-05-18T21:37:00.001-04:00

In today's market, the value of real estate is substantially less than it was a few years ago when it reached an all time high.

If you are looking for a home, you are probably seeing disclosures that state,"this is a short sale" or "offer subject to third party or lender approval". What does this exactly mean?

Here's an Example:

Jane Doe bought a home two years ago for $350,000 and obtained a mortgage for all 100% (she put no money down). Jane lost her (great paying) job of 15 years and is not making nearly the money she became accustomed to having. She is struggling to make her mortgage payment or possible has already stopped making the payments and is facing foreclosure.

She consults with an experienced real estate agent (Seller's Agent) to list her home for sale at today's current market value, $250,000, yes a $100,000 loss. Due to a "substantial change of circumstances" (loss of job) and once Jane gets an offer on her home, she will approach her mortgage company with a potential buyer's Offer and ask that a short sale be approved (the sale is short $100,000 and most times, it will be the bank that will be out the money with the Seller being able to walk away with the debt forgiven).

Now lets imagine that you are the one that put the offer in and your agent (Buyer's Agent) informs you that this is a short sale and a decision on whether your offer will be accepted or denied will take 2 weeks. Why so long?

Usually, once Jane contacts her mortgage company to request approval of your offer and therefore a short sale, this is the 1st time Jane's mortgage company will start the process (most mortgage companies will not even discuss this option until your have a potential buyer - remember talk is cheap but money talks) . It is at this point that Jane's bank will want:

Proof that she cannot afford this loan (banks statements, tax returns, financial statement, etc.);
Proof that Jane has had a "material change of circumstances", loss of job, divorce, etc.
Proof of the current market value - Jane's mortgage company will usually hire another real estate agent from the local area that is not involved in this sale to go out to the property and report back to them with;

Once all this information is back to Jane's mortgage company, they will then be in position to address your offer.