HUD

The market value of condos may be further depressed by new Homeowner Association (HOA) requirements set by FHA. FHA loans are the most popular mortgage product for condos because of the combination of low down payment and easier qualifying. Other mortgages may be available for HOAs that are not FHA approved, however, they have: 1) higher rates; 2) higher down payments; 3) more stringent qualifying guidelines.

Implemented in February, the HRAP/DELRAP (HUD Review and Approval Process/ Direct Endorsement Lender Review and Approval Process) program sets out new guidelines for projects to be eligible for FHA financing. Among the requirements are:

* the HOA may not have 15 percent of the homeowners delinquent on HOA dues
* one investor or entity may not own more than 10 percent of the project
* at least 50% of the project must be owner occupied
* More requirements apply. Call 1- Chip Allen below for more information.

Chip Allen
Crestline Mortgage Bankers
A Division of Universal Lending Corp
Direct: 303.947.2109
Fax: 303.987.0676
Loanchip@hotmail.com
Your Lender for Life!

In my previous 2 Blogs on DPA, I discussed and tried to dispel some of the myths surrounding down payment assistance. In addition, I highlighted some of the key factors in determining what it takes to qualify for DPA. Today, I will address who are the agencies out there who offer DPA and how doing a little research can help in deciding which program you should consider and how to find out if your lender works with that agency.

If you go to HUD’s website and search for down payment assistance, you will find that there are over 30 different state, county, and city agencies out there offering DPA programs out there for first time home buyers (http://www.hud.gov/local/co/homeownership/buyingprgms.cfm). Most of them are geographic specific (city and county) with a few of them being statewide. So understanding where you believe you want to live is absolutely critical determining what agency and program you should use. Let’s say for example you want to purchase a home in Denver that happens to be in Adams County. In this scenario, you could potentially use the following three different agencies/programs (CHFA, CHAC, and Adams County). Working with a lender that knows the subtle differences between the programs is paramount and will save you a small fortune in interest payments over the life of the loan.

Once of the best ALL AROUND programs is Colorado Housing and Finance Authority (CHFA). It is a statewide program that offers a multiple programs and options for first time home buyers. It serves the entire State of Colorado and never runs out of money. It has the highest income limits for first time buyers and some very accommodating credit requirements (FICO scores down to 580). They offer home buyer education (both online and class room) and the administrators to the Mortgage Credit Certificate Program (MCC) where first time buyers can “super charge” their federal tax savings by taking a 20% “interest tax credit” on their tax return.

Check out CHFA’s website at www.chfainfo.com. Great programs offer by CHFA and you can find a list of approved CHFA lenders on the website as well.

For those of you new to the home buying process, a new change happened January 1^st, 2010 that will make you life allot simpler in terms of shopping for a home loan. The new Good Faith Estimate (GFE) requirements have made lenders HIGHLY accountable for the interest rate and closing costs quotes on a home loan. In the past, mortgage lenders and brokers could play “fast and loose” with their Good Faith Estimates often quoting terms that were not available just to get the client “in the door”. Once you invested a few weeks with them and gotten the loan approved, the terms would change at the last minute. Consumers either were forced to take the different terms or start the process over with a new lender. The number one complaint by consumers to HUD was that their terms at closing (rate, closing costs, and cash required to close) was significantly different than they were originally quoted.

Today Lenders are now required to provide you with a “Good Faith Estimate” (GFE) that binds them to their quote (rate and fees) for a minimum of ten days. In addition, the new GFE discusses lock options much more clearly. Sections A of the new GFE (lenders origination charges) cannot change at all (other than decrease) and Section B (Other Settlement Services) cannot change by more than 10% of the original quote. If the section B charges are above the 10% tolerance, the lender is required to “refund” the difference back the borrower at closing.  So the consumer is very much protected from terms changing at all from the original quote. I recently attended a seminar and one of the points that the instructor made is that the acronym GFE should now stand for “Guaranteed Fee Explanation” and I could not agree more. Basically the new GFE has become that, a form that guarantees the fees and rates to the client. Good news and more transparency for the consumer.