Friday, February 24, 2012
Wednesday, February 22, 2012
Thursday, February 9, 2012
Everyone agrees stabilization of the housing sector will help the U.S. economy move forward into recovery. Increasing home sales, without creating any new real estate bubbles, would be movement in the right direction.
Even with the housing meltdown hardships for many the last few years, home ownership remains part of the American Dream, especially for first time home buyers.
One result of the real estate value bubble burst caused by easy money and freewheeling loans, is lenders have gone back to pre-bad loan mess requirements, which include a more standard down payment to qualify. Standard down payment amounts typically range from 3.5% FHA loans to 20% conventional loans.
Saving has become much more difficult for the average American with inflation almost doubling the cost of food and energy from just a few years ago and wages being frozen for most during this hard recession.
Thousands of dollars for a home purchase down payment is a major obstacle for even those that would be responsible first time home buyers. Increasing home ownership to an investor dominated class will only increase the overall wealth gap between the rich and the middle class.
What if assistance for qualified home buyers was available? What if thousands of down payment assistance grants and programs, and thousands of dollars, were actually obtainable?
Would the average person know about it as they look at homes online and dream about buying? Does every real estate professional or lender you might work with have a good understanding of current private and public down payment assistance?
How would you know? Where would you look? Would you have to spend hours researching the Internet to uncover just a few grants or programs? Would you know how to look for affordable fix-rate mortgages, rehab loans, and more?
What if there was a company tracking “6,116 total programs administered across 1,400 housing agencies, covering every state in the U.S.?” There is.
What if when you searched public multiple listing service websites online, an icon indicated down payment assistance was available on that particular property? What if one click brought you to a few home buyer qualification questions and also directed you to a real estate professional to help you explore options?
This type of online real estate feature is being provided by Atlanta-based Workforce Resource, LLC with their proprietary Web tool Down Payment Resource (DPR). DPR “clarifies complex eligibility requirements and simplifies the process for matching home buyers with spec
ific buyer assistance programs.”
DPR offers this tool to Realtors®, lenders, home ownership counselors, and ultimately to home buyers looking for help.
Workforce Resource, LLC President Rob Chrane explains, “Currently, the DPR icon is available through our Multiple Listing Service (MLS) partners in select markets. In some markets, home buyers can search for down payment assistance programs directly and request additional information from a Realtor®. In other markets, MLS member Realtors® provide the program information and links to their clients.”
He notes, “DPR is currently available through eight multiple listing services (MLSs).
Those markets include: Minneapolis; western Wisconsin; suburban New York; central Florida; northern Illinois; southern Wisconsin; Tucson, Arizona; western North Carolina, Vermont, New Hampshire, and northern Nevada.”
“We believe providing access to assistance program information can help revive the housing market and get more families into homes. We have a goal to make it available everywhere in 2012 to ensure all prospective home buyers have the chance to avail themselves of every opportunity.”
Rob Chrane shares why Workforce Resources, LLC developed the DPR Web tool, “As a former Realtor® and mortgage lender, I always wondered why there wasn’t a better way to identify programs and eligible homes. It was so difficult to determine what programs were in specific areas, which were funded, and how to apply.”
“Our company created DPR to meet this need. It is the first tool to aggregate information about home ownership programs into one online platform. Home buyers are the ultimate beneficiaries of assistance programs, but there is a lack of education in the marketplace on how to take advantage of these funds. We educate consumers directly and through Realtors®.”
He details the private and public nature of help, “While many assistance programs are government funded and determined by annual grants, there are also employer and nonprofit programs funded privately. DPR also has plans to include Employer Assisted Housing (EAH) programs in the future.”
“In addition, the government programs may be funded by investment bonds, rather than grants alone. Video and blog information on our website expands on the three most common types of assistance programs.”
Chrane answers what the usual dollar amount or loan percentage of help are, “Assistance amounts can vary greatly. They may range from $2,000 up to $50,000 or more, depending on the home buyers' qualifications and needs.”
“Unfortunately, many of these programs go unnoticed, because of limited marketing resources, or because the information is not easily accessible. That is precisely why DPR was created - to better connect home buyers with these important resources. In some cases, programs may even be layered for greater assistance.”
He summarizes the general qualifications to take advantage of help available, “To qualify for assistance program, both the home buyer and the property must meet certain criteria, and the criteria vary per program. Consumers can find assistance available beyond just first time home buyers, as well as programs for low to moderate income home buyers. In fact, the first time home buyer qualification has provisions for those who have not owned in the last three years and recently displaced single parents.”
“Some standard criteria include property location, type of home, sales price requirements, household income requirements for the home buyers and home buyer education certifications. Through DPR, home buyers can answer eight questions focusing on some of these criteria to determine if they may meet the qualifications for a program.”
“Income limits traditionally were set at 80% of median household income for the subject Metropolitan Statistical Area (MSA) based on household size, but are sometimes higher as home affordability has crept up the income ladder, especially for working families.”
Chrane explains availability for all loan types, “It is important for home buyers to work with a lender familiar with these programs to ensure the mortgage financing goes smoothly. Many lenders take courses to understand the details of specific local programs and can advise you on the best type of loan for your personal financial situation.”
“Many home buyers do not know that down payment assistance funds must be combined with a first mortgage such as Conventional, FHA, VA and USDA loans. Down payment assistance can be provided a number of ways depending on the program, but the most common types are through forgivable loans or direct grants. The funds are typically provided by housing finance agencies, municipal housing development authorities and county economic development departments."
Does Rob Chrane see the trend for more traditional down payment requirements becoming a permanent part of home mortgages as we move forward after the recent housing bubble burst?
“During the housing boom, most home buyers did not need or seek out assistance programs. The loans were often zero down and easy to come by. By good measure loans now require more documentation, but now the pendulum on down payments has swung way to the other side.”
“There are still some government sponsored enterprise (GSE) programs like Fannie Mae’s My Communities that have conventional 90-95% loan to value loans. But, in fact, many conventional, 30-year fixed rate mortgages now require down payments of 15 to 20%. And, mortgage insurance requirements make conventional loans of greater that 80-90% harder and more expensive to get.”
“While you will save money over the long term by locking in on some of the lowest rates we have seen in decades, you may also need more cash available to secure the down payment.”
“According to Trulia's latest American Dream survey, consumers rank saving for a down payment as the number one barrier to home ownership. And, with higher down payment percentages, it is taking families much longer to save, delaying home ownership and keeping properties on the market longer.”
“Today, consumers of all different backgrounds are looking for down payment options that can help them secure the financing on a home. Having easy access to hard-to-find information about assistance programs can be a game changer in hard hit markets that have a large housing supply with home buyers still on the fence. It can also help us move from an investor market to an owner occupant market.”
“Even as some down payment assistance programs may become unfunded or expire, other new programs to meet the current housing need are added. In Illinois, for example, the governor recently announced a new pilot program called the Illinois Building Blocks Program. It will provide $10,000 in down payment and closing cost assistance for vacant homes in five communities.”
“Our company has developed short videos on topics including the top three types of programs and how to complete a DPR search. Our articles and blog posts highlight current issues including, how FHA loans and assistance programs can work together and the steps consumers should take before they begin house hunting."
Rob Chrane invites consumers to take advantage of the free consumer information offered by Workforce Resource, LLC, “Home buyers can register for our monthly newsletter on our website home page, in the bottom right corner, for links to home buying resources, tips, websites, case studies, and more.”