Loans guaranteed by the Federal Housing Administration, the U.S.-owned mortgage insurer, may be involved in more home-purchase transactions than borrowing financed by Fannie Mae and Freddie.
FHA lending last quarter may have topped the combined volume of government-supported Fannie Mae and Freddie Mac in a home-lending market that's still essentially a government-financed market.
To get some perspective of what's going on consider these figures from Freddie Mac:
2006 - Loans worth $2.858 trillion were originated. The value of VA and FHA loan originations dropped to $80 billion (2.80 percent).
2008 - Loans worth $1.490 trillion were originated - less than half the 2006 total. As to FHA and VA loans, they rose to $291 billion (19.53 percent - almost seven times the 2005 percentage. That number has since grown to almost 50 percent.)
Issuance of so-called non-agency home-loan securities will eventually revive because "the government can't continue to be 95-plus percent of the market," says John Herbert, a director at Credit Suisse Group.
The Good News:
Home prices today are much more in line with personal incomes and mortgage rates are back to all-time lows. As a result, more than half of all Fannie Mae loans for home purchases have been to low-to-moderate income families. Affordability is a good thing and another step towards a real housing recovery.
Monday, July 19, 2010
Wednesday, March 17, 2010
Facts on the Energy-Efficiency Tax Credit
The Existing Home Retrofit Tax Credit (Tax Code Section 25C): Tax credits are available at 30% of the cost, up to a $1,500 lifetime limit, for installation in 2009 & 2010 (for existing homes only) of these products:
Building envelope components: (Installation costs not included)
o Insulation material or system
o Exterior window, skylight, door, storm window or storm door
o Metal or asphalt roofs
Qualified energy products: (Installation costs may be included)
o Electric heat pump water heaters
o Electric heat pumps and central air conditioners
o Natural gas, propane or oil water heaters
o Biomass burning stoves
o Natural gas and propane furnaces
o Natural gas, propane, or oil water boilers and oil furnaces
o Advanced main air conditioning fans
The Wind, Solar, Geothermal and Fuel Cell Tax Credit (Tax Code Section 25D): Tax credits are available at 30% of the cost, with no cap through 2016 (for existing homes and new construction) for:
Geothermal Heat Pumps
Solar Panels
Solar Water Heaters
Small Wind Energy Systems
Fuel Cells
The energy-efficiency home products must be "placed in service" between Jan. 1, 2009 and Dec. 31, 2010. The credits are only valid for improvements made to the taxpayer's principal residence, except for qualified geothermal, solar, wind property, which can be installed on any home used as a residence by the taxpayer.
Home owners can claim the 25C and 25D credits on
Form 5695 when they file their income tax returns. Check with your tax professional to ensure correct application of the energy-efficiency tax credit. Retain all receipts as well as records that include:
• Name and address of manufacturer
• Identification of the class of eligible building envelope component
• Make, model number and any other property identifiers
• A statement that the component is eligible for the credit
For more information, visit www.nahb.org/efficiencytaxcredit.
Building envelope components: (Installation costs not included)
o Insulation material or system
o Exterior window, skylight, door, storm window or storm door
o Metal or asphalt roofs
Qualified energy products: (Installation costs may be included)
o Electric heat pump water heaters
o Electric heat pumps and central air conditioners
o Natural gas, propane or oil water heaters
o Biomass burning stoves
o Natural gas and propane furnaces
o Natural gas, propane, or oil water boilers and oil furnaces
o Advanced main air conditioning fans
The Wind, Solar, Geothermal and Fuel Cell Tax Credit (Tax Code Section 25D): Tax credits are available at 30% of the cost, with no cap through 2016 (for existing homes and new construction) for:
Geothermal Heat Pumps
Solar Panels
Solar Water Heaters
Small Wind Energy Systems
Fuel Cells
The energy-efficiency home products must be "placed in service" between Jan. 1, 2009 and Dec. 31, 2010. The credits are only valid for improvements made to the taxpayer's principal residence, except for qualified geothermal, solar, wind property, which can be installed on any home used as a residence by the taxpayer.
Home owners can claim the 25C and 25D credits on
Form 5695 when they file their income tax returns. Check with your tax professional to ensure correct application of the energy-efficiency tax credit. Retain all receipts as well as records that include:
• Name and address of manufacturer
• Identification of the class of eligible building envelope component
• Make, model number and any other property identifiers
• A statement that the component is eligible for the credit
For more information, visit www.nahb.org/efficiencytaxcredit.
Wednesday, February 3, 2010
'First Look' gives home buyers REO edge
Buyers of Fannie Mae properties can use any financing, and often have already been preapproved by their lender. "But the best way to finance a Fannie Mae REO is with HomePath financing."
Foreclosure buyers should make sure they are completely preapproved for a loan and have submitted all the necessary paperwork before making an offer.
Shoppers are urged to look into HomePath financing as part of the loan preapproval process so "they are in a position to make an immediate offer if they find a Fannie Mae foreclosure."
Fannie Mae spokeswoman Amy Bonitatibus says that since Fannie Mae appraises each foreclosed property to determine the value, borrowers financing with HomePath Mortgage will not have to pay for an appraisal. They also will not have to pay for mortgage insurance. In addition, the down payment requirement is only 3 percent.
Help with closing costs
Fannie Mae typically pays between 3 percent and 6 percent of a buyer's closing costs, regardless of how the property is financed. Buyers may choose any title company.
The HomePath Renovation Mortgage allows buyers to borrow an additional 20 percent of the "as repaired" property value, up to $30,000. The "as repaired" value is the appraised value based on the completion of specified renovations, such as new appliances, cabinets or flooring.
"Buyers with good credit and debt-to-income ratios, might prefer conventional financing or an FHA loan. "But it's important that the lender has the knowledge of all these programs to see which one is a good fit."
Buyers interested in obtaining funding from their state or local government or charities should apply directly to their local offices to see if they qualify for assistance.
Foreclosure buyers should make sure they are completely preapproved for a loan and have submitted all the necessary paperwork before making an offer.
Shoppers are urged to look into HomePath financing as part of the loan preapproval process so "they are in a position to make an immediate offer if they find a Fannie Mae foreclosure."
Fannie Mae spokeswoman Amy Bonitatibus says that since Fannie Mae appraises each foreclosed property to determine the value, borrowers financing with HomePath Mortgage will not have to pay for an appraisal. They also will not have to pay for mortgage insurance. In addition, the down payment requirement is only 3 percent.
Help with closing costs
Fannie Mae typically pays between 3 percent and 6 percent of a buyer's closing costs, regardless of how the property is financed. Buyers may choose any title company.
The HomePath Renovation Mortgage allows buyers to borrow an additional 20 percent of the "as repaired" property value, up to $30,000. The "as repaired" value is the appraised value based on the completion of specified renovations, such as new appliances, cabinets or flooring.
"Buyers with good credit and debt-to-income ratios, might prefer conventional financing or an FHA loan. "But it's important that the lender has the knowledge of all these programs to see which one is a good fit."
Buyers interested in obtaining funding from their state or local government or charities should apply directly to their local offices to see if they qualify for assistance.
Tuesday, January 12, 2010
Sellers Cut Fewer US Home Prices
NEW YORK, Jan 12 (Reuters) - Fewer U.S. home sellers cut listing prices on their homes for a second straight month in December as buyers rush to beat rising interest rates and an expiring tax credit, real estate website Trulia.com said on Tuesday.
Prices on 21 percent of homes on the market as of Jan. 1 were sliced at least once, down from 25.6 percent two months earlier.
The share of sellers reducing their asking prices has fallen to the lowest level since San Francisco-based Trulia started tracking reductions in April 2009.
The average discount for price-reduced homes was unchanged from the prior month at 11 percent off the original price.
Average 30-year mortgage rates jumped from a record low 4.71 percent early in December to end the year at 5.14 percent, according to home funding company Freddie Mac (FRE.N). The rate slipped in the first week of this year but is seen nearing 6 percent later in 2010.
"I expect reductions to rise again as the tax credit extension deadline approaches but I also expect mortgage rates to rise, so they may cancel out the savings" from list price reductions, Flint said.
"On a national level, I expect the industry to be on a roller coaster for 2010 and hopefully see some stability in 2011," he added.
Price cuts were fairly evenly disbursed regionally in the latest month.
Twenty percent of listings in the South had price cuts, while reductions were 22 percent in the West, Midwest and the Northeast.
The luxury market continues to pay a heavy price. Homes listed at $2 million or more cut prices by an average of 15 percent from the original price, the most since Trulia started tracking this last April. These houses represent less than 2 percent of all current listings on Trulia, but account for 24 percent of the $21.2 billion in home price reductions. (Editing by Dan Grebler)
Here is a list of cities with the MOST price reductions:
(Percent of listings with price reductions/Average reduction %)
1. Mesa, AZ 29%/14%
2. Indianapolis, IN 29%/9%
3. Baltimore, MD 29%/12%
4. Charlotte, NC 30%/10%
5. Tucson, AZ 30%/10%
6. Omaha, NE 32%/7%
7. Seattle, WA 32%/10%
8. Portland, OR 33%/9%
9. Milwaukee. WI 33%/10%
10. Jacksonville, FL 36%/10%
Prices on 21 percent of homes on the market as of Jan. 1 were sliced at least once, down from 25.6 percent two months earlier.
The share of sellers reducing their asking prices has fallen to the lowest level since San Francisco-based Trulia started tracking reductions in April 2009.
The average discount for price-reduced homes was unchanged from the prior month at 11 percent off the original price.
Average 30-year mortgage rates jumped from a record low 4.71 percent early in December to end the year at 5.14 percent, according to home funding company Freddie Mac (FRE.N). The rate slipped in the first week of this year but is seen nearing 6 percent later in 2010.
"I expect reductions to rise again as the tax credit extension deadline approaches but I also expect mortgage rates to rise, so they may cancel out the savings" from list price reductions, Flint said.
"On a national level, I expect the industry to be on a roller coaster for 2010 and hopefully see some stability in 2011," he added.
Price cuts were fairly evenly disbursed regionally in the latest month.
Twenty percent of listings in the South had price cuts, while reductions were 22 percent in the West, Midwest and the Northeast.
The luxury market continues to pay a heavy price. Homes listed at $2 million or more cut prices by an average of 15 percent from the original price, the most since Trulia started tracking this last April. These houses represent less than 2 percent of all current listings on Trulia, but account for 24 percent of the $21.2 billion in home price reductions. (Editing by Dan Grebler)
Here is a list of cities with the MOST price reductions:
(Percent of listings with price reductions/Average reduction %)
1. Mesa, AZ 29%/14%
2. Indianapolis, IN 29%/9%
3. Baltimore, MD 29%/12%
4. Charlotte, NC 30%/10%
5. Tucson, AZ 30%/10%
6. Omaha, NE 32%/7%
7. Seattle, WA 32%/10%
8. Portland, OR 33%/9%
9. Milwaukee. WI 33%/10%
10. Jacksonville, FL 36%/10%
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