News Wire: Charitable Down Payment Assistance Programs...Gone

News Wire: Charitable Down Payment Assistance Programs...Gone

by Hassan Nicholas

OK, so...remember that entry I wrote about the legitimacy of charitable down payment assistance programs? I had my suspicions and it appears I wasn’t the only one. Recently the Department of Housing and Urban Development aka HUD announced a rule intended to exclude “quid-pro-quo” down payment assistance programs. The popular program permitted FHA borrowers to receive cash gifts/contributions, directly or indirectly, from the seller. By charging a service fee popular charitable assistance programs such as Sacramento-based Nehemiah Foundation and others went around a loop hole that prohibits contributions and gifts from the seller. Now that it’s banned it has hurt the business and aspirations of many real estate agents and home buyers. Even with prices still falling in many areas, the quality (availability) and quantity (the amount) of assistance offered for first-timers has decreased substantially. All the more signs that spell out an economic slump that hasn't ran it's course yet.

Edit:

Even with the passing of the Housing Bill, charitable down payment assistance programs are not going down without a fight. Here is a statement released by AmeriDream that I stumbled upon,

"Last night, Congress introduced bipartisan legislation, H.R. 6694 that would reauthorize and reform charitable downpayment assistance. This bill would remedy a harmful provision in the new housing law which limits homeownership opportunities for low and middle-income Americans. The legislation, sponsored by U.S. Reps. Al Green (D-TX), Gary Miller (R-CA), Maxine Waters (D-CA), and Christopher Shays (R-CT) reauthorizes and reforms charitable downpayment assistance funded in part by sellers, which has helped over one million families and individuals become homeowners since 1999. The program was eliminated by legislation signed by President Bush on July 30, 2008.

The Green-Miller-Waters-Shays plan would re-authorize and reform non-profit downpayment assistance and secure it as an allowable source for FHA borrowers. The bill seeks to ensure that providers of the downpayment assistance operate in a transparent manner to guard against conflicts of interest. The bill also includes language to ensure that FHA maintains its financial stability by permanently authorizing the Secretary to assess higher premiums to higher risk borrowers."

OK, so what this means is that supporters of these types of programs are attempting to pass a bill that will counter the provision outlined above. And word is, it will more than likely not be voted until 2009.

Hassan's 7 Picks for First-time Homebuyers

Hassan's 7 Picks for First-time Home-buyers

1. WalkScore - A very interesting site that lets you type in an address and measure the 'walkability' of that area. The score takes into account amenities, parks, business listings, etc. but does not take into account proximity to public transportation, crime, and other factors. All in all, it's still an interesting site and another tool to help in your house hunting. I input our organization's address to see how we faired. Look at the image below.
2. LAPD Crime Maps - As far as crime goes, LAPDCrimeMaps.org picks up where WalkSource doesn't. Input a location and the website will generate a detailed map outlining the various types of crimes committed in that radius over a given amount of time. Of course I was curious to see who our neighbors are (CFRC is located in South LA aka South Central) and saw, at least for this 3-day window, we've had a couple of auto thefts in the area. Nevertheless, I recommend house-hunters (especially New Los Angelenos) to monitor their target neighborhoods at least three months in advance. After all, this is LA...
3. Real Estate Terms Dictionary on Investopedia.com - Memorize this list of real estate terms and definitions and surprise your real estate agent when you've been following the Case-Shiller Index and feel although your qualifying ratios could qualify you for an Interest Only nonconforming loan, you'd rather wait still prices fall and save for a two discount points purchase.
4. APR Calculator from BankRate.com - A handy tool to determine the annual percentage rate on a mortgage complete with amortization schedule. Play around with this guesstimate how much that Victorian house in Angelino Heights could cost you monthly at current interest rates.
5. GreatSchools.net - Want to know how the middle school in your future neighborhood measures up? Get the inside scoop from parents and students themselves from this site. And if you're really savvy, check out the API (Academic Progress Index) Rank of any school here.
6. Google Maps - They have this great feature that allows you type in an address or area and it will show a street view of that location - essentially providing a virtual tour of the neighborhood. Yes, I know ZipRealty and Trulia do this also, but it seems smoother on Google. Plus, you can enlarge the screen size. I like to use this feature to get a feel for what the neighborhood "feels" like. Also, sometimes pictures can be deceiving, so this is a good way to follow up on interested properties. The only caveat I see is, despite looking very current (I of course tested out my own address), I'm not sure how often it is updated.
7. Google Transit - Another great creation by Google...with this tool you can find out how (convenient it is) to take public transportation from, say, your future home to work. Not gonna ditch the car you say? Well, as gas costs will inevitably rise and traffic in LA worsens you might value having public transportation a walk away in the future.
   

Honorable mention goes to i-Neighbors.org an on-line community that lets connects residents of specific neighborhoods. Find your (future) neighborhood here and get to know your future neighbors.

News Wire: CalHFAs Community Home Loan Program

News Wire: CalHFA's Community Home Loan Program
by Hassan Nicholás

The State has just launched a new program to help those first-time home buyers interested in purchasing Real Estate Owned (REO) properties located in selected counties and zip codes in California. Under the Community Home Loan Program participating financial institutions will provide a special sales price on their eligible REOs located in specified areas, at below market interest rates and 100% financing. Remember that other CalHFA 1st loan program can only do up to 95% financing. All of this could add up to a great deal for those in the market for bank owned properties. As of now there is nothing on their website about this new program so we expect that they should be making updates soon.

Check out the eligible areas below.

News Wire: CitiMortgage ACCESS Program

News Wire: Citi's ACCESS program will give first-time home buyers more access
by Hassan Nicholás

Citibank sheds a little hope for anxious first-time home buyers.

If you are an anxious buyer waiting for the City of LA to replenish funds into it's first-time home buyer program you are surely not alone. In fact, these days it seems as though there is a collective frustration with down payment assistance programs in general. Subject to local government budget allocations, strict income guidelines, property location restrictions, and other caveats down payment assistance programs can bottleneck the home buying process. Though for many, it is a "necessary" frustration - the difference between buying and not owning a home.


Fortunately, banks are beginning to realize this. Through CitiMortgage's ACCESS Loan Program a borrower can obtain a 1st mortgage with the option of an 8% second in down payment assistance for over 100% financing. That's more than CalHFA's 3% in down payment assistance. And the differences don't stop there. Below we highlighted the main points.

• 30 to 40 year fixed rates

• Longer interest-only periods than other programs (10 years)

• NO sales price limits

• NO recapture tax if home sold later

• Duplexes, 2-unit properties are eligible

• Income limits much higher (mid $80k for one person household)

• Household income not used, only qualifying

• Funds are consistently available, backed by private funding

• NO first time home buyer requirement

So, could this be a competitor to CalHFA? Possibly. Especially considering that the state's rate is still in the 7s, ACCESS could prove to be a fierce competitor for government-sponsored down payment assistance programs.

Ready to give it a try? Contact our partner mortgage broker Ira Smith @ 310-217-2500 ext. 201

Note: LATMAP through CFRC will be able to broker these loans through our Savvy, Sound and Safe Home Loan Program (SSSHLP) too!