Tag Archives for " FHA "

February 16, 2011

Still Looking for a Reason to Buy? FHA Raising Annual Mortgage Insurance Premiums

FHA Announcement: Raising Annual Mortgage Insurance Premiums

Are you still in need of one more reason to kickstart the process of buying a home? You could possibly end up saving money if you choose to do so before April 2011.

The Federal Housing Administration (FHA) announced this week that it will be raising its annual mortgage insurance premium (MIP) by a quarter of a percentage point on all 30- and 15-year loans. This increase comes as part of a new premium structure for FHA-insured mortgage loans the FHA is putting in place in response to the Obama administration’s housing finance reforms. The new structure will apply to all new loans insured by the FHA on or after April 18, 2011. Existing and reverse mortgage (HECM) loans insured by FHA are not impacted by the pricing change.

The following is an excerpt from a DSNews article reported on Februay 15, 2011:

“FHA Commissioner David Stevens says the annual payment adjustment will increase borrowers’ costs about $30 per month and will help to strengthen the agency’s depleted coffers.
‘After careful consideration and analysis, we determined it was necessary to increase the annual mortgage insurance premium at this time in order to bolster the FHA’s capital reserves and help private capital return to the housing market,’ Stevens said in a statement.

He continued, ‘This quarter point increase in the annual MIP is a responsible step towards meeting the congressionally mandated two percent reserve threshold, while allowing FHA to remain the most cost effective mortgage insurance option for borrowers with lower incomes and lower down payments.’

The 25 basis point rise was proposed last week as part of the Obama administration’s report to Congress on reforming the nation’s housing finance system, and was detailed in President Obama’s fiscal year 2012 budget released Monday.

According to FHA, this premium change enables the agency to increase revenues at a time when it is critical to safeguard the stability of its Mutual Mortgage Insurance fund, which had capital reserves of approximately $3.6 billion at the end of FY 2010. The new pay structure is estimated to contribute nearly $3 billion annually to the fund.”

Full DSNews Article
Looking for Affordable Housing?

October 25, 2010

What You Need to Know About HUD Homes -AND- Why They Are So Affordable

Showcase Realty has recently acquired the honor of being one of the few brokerages able to list HUD Homes in the Charlotte, NC Metro and surrounding areas. The following is a quick helpful explanation of HUD Homes from the US Dept. of Housing and Urban Development:

What is a HUD Home?
A HUD Home may be a single-family house, a townhome, condominium or other type of residence. The properties were deeded to HUD/FHA by mortgage companies who had foreclosed on FHA-insured mortgage loans. Now HUD must sell these homes – as quickly as possible at market value – in order to obtain the maximum financial return on its mortgage insurance funds.

Who can buy a HUD Home?
Anyone who has the money or can qualify for the necessary amount of mortgage financing can purchase a HUD Home. You do not have to be low-incomeor meet any other auch limitations.

Can I get a HUD Home for free, or for one dollar?
No. HUD acquires its properties through the foreclosure of FHA insured mortgages. One of HUD’s many missions is to maximize return to the FHA insurance fund, which it does by selling the properties at fair market value.

How do I buy a HUD Home?
HUD’s policy is to market acquired properties on a competitive basis with offers being submitted through any participating licensed real estate broker. Local brokers will assist you in the transaction. They can show the property to prospective buyers, as well as answer questions and provide information on the location of parks, schools, shopping and employment centers.

Are HUD Homes meant for low income people?
HUD Homes come in a variety of price ranges, though most are affordably priced, making them accessible to low and moderate income Americans.

What are the income requirements?
If you make a cash purchase, there are no income requirements. Otherwise, you must be able to qualify for a particular type of mortgage financing based on established mortgage lending criteria.

How does HUD decide how much to charge for a HUD Home?
THe listing price of a HUD property is a price based on the appraised value.

Can investors purchase HUD Homes?
Yes. However, HUD offers its properties to owner/occupants for a period before making them available to investors.

What happens if I can’t close the sale within the time permitted by HUD?
You’ll probably have to pay fees for an extension of time, usually in increments of 15 days.

Is there any way for me to get advanced notice about homes that will be coming up for sale?
No. HUD Homes are listed for sale in the local multilple listing service (MLS), the Internet at www.hud.gov or ask your broker.

Since the partnership is still very new, Showcase Realty’s HUD Homes have not become available on MLS yet – but will be very soon. Keep checking back to see when they will be listed or keep an eye on our website.