Tag Archives: HUD
Can I still buy a home with as little as 3.5% down?

describe the imageBefore 2008 there were programs that allowed buyers to finance 100% of their purchase. On the surface those programs sounded pretty good, except they carried high rates, adjustable terms, and pre-payment penalties.  But wait, there are still programs where you can get almost 100%, say 96.5%, a program backed up HUD, called FHA loans.  
  
FHA loans have been helping people become homeowners since 1934. The Federal Housing Administration (FHA) – which is part of HUD – insures your purchase loan. 

Low down payments, 3.5%
Low closing costs, seller can give up to 6% concession. 
Easy credit qualifying
What does FHA have for you?

Buying your first home?

FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.

Want a fixer-upper?

FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Its called an FHA 203K loan.  Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs – all in one loan.

Financial help for seniors

FHA has a program commonly known as a home equity conversion mortgage, or reverse mortgage.  Are you 62 or older? Do you live in your home? Do you own it outright or have a low loan balance? If you can answer “yes” to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash.

Want to make your home more energy efficient?

You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.

How about manufactured housing and mobile homes?

Yes, FHA has financing for some mobile homes and factory-built housing. To qualify the home must be fee simple; in other words, the mobile home or factory built housing must be on land that the property is situated.  

FHA released its annual financial status report to Congress

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12-171″>FHA plays a very important role in helping more Americans and Delawareans qualify to become home owners

  FHA  maintains the viability of this important financial resource

   FHA home financing is  important  for continued home purchases and sustained growth to the economy

    As stated, FHA is essential in that FHA accounted for 50 percent of home purchase mortgages for African American borrowers and 49 percent for Hispanic/Latino borrowers, along with thousands of other eligible borrowers use FHA financing

In reporting on findings of the independent actuarial study,

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12-171″>HUD, “FHA has weathered the storm of the recent economic and housing crisis by taking the most aggressive and sweeping actions in its history to reform risk management, credit policy, lender enforcement, and consumer protections,” said HUD Secretary Shaun Donovan

 “During this critical period in our nation’s economic history, FHA has provided access to homeownership for millions of American families while helping bring the housing market back from the brink of collapse to a point where the outlook is positive and recovery is underway

FHA Acting Commissioner Carol Galante added, “While the loans made during this Administration remain the strongest in the agency’s history, we take the findings of the independent actuary very seriously

  We will continue to take aggressive steps to protect FHA’s financial health while ensuring that FHA continues to perform its historic role of providing access to homeownership for underserved communities and supporting the housing market during tough economic times

Three factors are driving the change in FHA’s position compared to last year: 

First, the house-price appreciation forecasts used for this actuarial review are significantly lower than those used in last year’s report, as the actual turnaround in the housing market occurred later than was projected last year

  These house-price appreciation estimates do not include improvements to home prices that occurred since June and were depressed by a high level of refinance activity

Second, the continued decline in interest rates, while good for the overall economy, costs the FHA revenue as its borrowers pay off their mortgages to refinance into lower rates

Again, this is clearly a positive, but it impacts the actuary’s estimate of the value of the Fund

  In addition, the actuary predicts that borrowers with higher interest rates who are unable to refinance will default at higher than normal rates, increasing losses from foreclosures for FHA

 

Third, based on recommendations made by the Government Accountability Office (GAO), HUD’s Inspector General and others, FHA directed the actuary to employ a refined methodology this year to more precisely predict the way losses from defaulted loans and reverse mortgages are reflected in the economic value of the MMI Fund

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12-171″>HUD/FHA will take several initiatives

 

The two more important new initiatives that will affect future  borrowers purchasing  homes into 2013 are listed below:

  • Reverse a policy made in a prior Administration to cancel required premium payments after a certain period that effectively meant that while FHA’s 100% insurance guarantee remained in effect for the 30-year life of a loan, borrowers were only required to pay premiums for less than ten years

     FHA has been left without premiums to cover losses on loans held beyond the period for which it collects premiums

      This change will apply to new loans

  • In 2013, enact an increase of 10 basis points or 0

    1 percent to the annual insurance premium paid by borrowers on new FHA loans

    This premium increase is expect to add $13 per month for the average borrower and will strengthen FHA’s capital position without limiting access to credit for qualified borrowers

If you are live in Delaware and are currently considering making a home purchase using FHA financing, you may want to consider moving forward before the end of 2012

  Entering into a sales contract and being assigned an FHA case number prior to years end (2012) may allow new borrowers from being part of the new planned initiatives, however, if allowed, this may still be lender specific

 

Why Seniors Apply for a Reverse Mortgage?

reverse mortgageThe Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) developed their mortgage programs to help seniors use their home’s equity to stay financially independent during retirement.Today, seniors apply for reverse mortgages for a wide range of reasons. Although keeping seniors in their homes is the top priority of the program, seniors use reverse mortgages to support many different goals.

Three Ways to Use Your Proceeds

  1. Paying for long term care: One of the terms of a reverse mortgage is that at least one individual named on the loan must use the home as his or her primary residence. If one spouse needs to be placed in a long-term care facility, the reverse mortgage can be used to pay the cost of his or her care. To avoid expensive retirement homes and long-term care facilities, many seniors are now taking advantage of in-home care opportunities. Because seniors will use the home as their primary residence, a reverse mortgage is a great way to pay for in-home medical care.
  2. Paying off other expenses: While medical expenses are a reason to consider a reverse mortgage, other bills can also force seniors to tap into their home’s equity. Social Security benefits are not always enough to cover high interest credit card payments on top of monthly house payments, utility bills and other expenses. Many seniors use their reverse mortgage proceeds to repay high interest debts and increase their cash flow.
  3. Paying off existing mortgage: For seniors who still owe an outstanding balance, the most popular reason to apply for a HECM reverse mortgage is simply to repay their existing balance. Once the balance is paid, seniors can use their remaining proceeds to make home repairs and pay the necessary costs of homeownership, including utilities, taxes and homeowner’s insurance. Taking care of these costs can greatly improve seniors’ financial outlook and make their expenses much more manageable.

To discover how a reverse mortgage might benefit you, contact me at Delaware Financial Capital Corp 302-266-9500 for more information or you simply click on the button below to fill out our online form.

 

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Do you have family members who are 62 or older?

senior homeowners no mortgage or a small mortgage

  Many seniors who have no mortgage continue to spend down their reserves in order to maintain their current standard of living

Many are depleting assets that cannot be replaced

The reality is there are many ways to preserve their current cash (liquid) assets without giving up their standard of living

In addition there are new ways to secure even more protection of your assets and still maintain your standard of living

Many homeowners who have little or no mortgage are utilizing their current built up equity in your home

I can hear them now saying, “I don’t want to use my home equity, unless it is a last resort

” This school is thought is old school thinking

The majority of today’s seniors are savvy and well educated and understand the importance when it comes to protecting their current asset base

Here is a list of the major concerns that could deplete your current asset base:

1

Life expectances continue to rise (Will you outlive your current assets?)
2

Minimal defined pension plan existence (Do you have one now or has it been reduced or eliminated?)
3

Rising Medical Costs (Drug costs, procedures and costs will continue to rise

)
4

Uncertainty surround government funding of Social Security (Will the deficit undermine the current trust system?)
5

Entitlement programs such as Medicare and Medicaid , (What steps will be taken to increase your share of the cost imposed by a growing number of participants?)
6

What happens if you have to go to assisted living or long term care?
7

What about protecting the assets you have utilizing available financial and tax planning to reduce and maintain your estate?

Today’s new 62 is bolder and informed when it comes to finances

Most understand the importance of financial asset protection

So, if you have relatives or friends who you think may benefit from a HECM Conversion Mortgage (commonly known as a reverse mortgage), please have them contact Sam at 302-266-9500

   Or you may simply click the button below to contact Sam

 

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