housing finance agency
Insiders Insight-Reporting on the Reports
January 29, 2010 by Russ Boyd · Leave a Comment
Videos by Russ Boyd are uploaded to Youtube, MetaCafe, Veoh, Vimeo and Yahoo Video by
Three news reports caught my eye in the past week that shed light on the state of the real estate market.
The California Association or Realtors ® reported that homes sales increased 1.7 percent in December in California compared with the same period a year ago, while the median price of an existing home rose 8.4 percent. Furthermore, for the second consecutive month, California’s median home price rose year-to-year in December, and had the largest year-to-year increase in more than three years. The state’s median price also remained above $300,000 for the second straight month. All this sales activity has led to a reduction of inventory, C.A.R.’s Unsold Inventory Index fell to 3.8 months in December, compared with 5.6 months in December 2008. 
As has been the case for much of the year, unsold housing inventory is between 2 and 3 months in the San Francisco Bay Area Counties. Statewide, three Bay Area cities, Los Altos, Palo Alto and Los Gatos and were in the top 10 for the highest median prices.
As can be seen here, according to recently released data in the latest Case-Shiller Home Price Index, all of the cities in the “20 City Composite” reading have improved for the past 10 months. 
The report revealed that four metropolitan areas including, the San Francisco Bay Area, reflected value gains in December and have shown monthly gains for over the past six months.
The third report that caught my attention was the November Federal Housing Finance Agency’s monthly House Price Index. According to the FHFA report, U.S. house prices rose 0.7 percent on a seasonally adjusted basis from October to November and for the 12 months ending in November, U.S. house prices rose 0.5 percent. I should point out that the FHFA monthly index is calculated using purchase prices of houses backed by mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. Also worth noting is that most homes being sold today are financed using conforming or high balance conforming loans.
The Pacific Region, which includes California, reported a year over year increase of 2.3 percent. As this graph indicates, the low point for home prices in the U.S hit bottom in November 2008.
A question that we are no longer asked is, “when will the market bottom?” It’s clear that was 12 to 14 months ago. The question for would be home buyers and home sellers is how to make the most in this market. While all these and other reports indicate an improving real estate market we still have a long way to go. In these complex times, I am always available to answer your questions or discuss you concerns. Simply call, text or email me for a prompt response.
Now, more than ever buyers and sellers will benefit from the advice and guidance that an experienced REALTOR® can provide. If you are in the San Francisco Bay Area, I invite you to start at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, including bank owned and short sales, home loans, market activity reports, home seller strategies, staging and decorating, a suite of 19 calculators, plus my book, “Let’s Make a Deal, The insiders Guide to Buying and Selling Real Estate” and more. Of course I am always available to discuss your real estate or mortgage related questions or concerns, just call, text or email me for a prompt response.
Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240.
housing finance agency
Sales Boost Expected From New FHA Tax Credit Rules
June 10, 2009 by orlandomortgagecentral · Leave a Comment
I came across this article on the National Association of Home Builders website. It covers some interesting points regarding the $8000 first time home buyer tax credit. If you are a first time home buyer and are in the Orlando mortgage market go to OrlandoMortgageCentral.com
The recent decision to allow home buyers to apply the Obama Administration’s $8,000 first-time home buyer tax credit toward the purchase of an FHA-insured home is expected to provide a further boost to homes sales, said Robert Dietz, NAHB’s director of tax issues.
In order to maximize the impact of the latest changes to the credit, home builders are well advised to scrutinize the details, which can be found in FHA Mortgagee Letter 09-15, Dietz said.
State Housing Finance Agency Role
Under the new FHA rules, state housing finance agencies and other government entities can “monetize” up to the full amount of the tax credit to enable borrowers to immediately apply the funds toward the FHA-required 3.5% down payment, he said.
The announcement of the new rules on May 29 by HUD Secretary Shaun Donovan “blesses” the tax credit loan programs that have been established by 10 state agencies, he said, and will encourage more states to join this list
Under these programs, state housing finance agencies make a short-term loan in an amount that is approximately equal to the anticipated tax credit, as calculated on IRS Form 5405.
The loan is backed by the tax credit itself and secured by a second lien against the purchased home, and it is generally paid off when the home buyer receives their tax refund from the IRS. If it is not paid off at this time, the loan becomes a self-amortizing second mortgage at a fixed interest rate.
.
FHA-Approved Lender Role
In contrast to the housing finance agency rules, home buyers who are using FHA-approved lenders can only apply the tax credit to a down payment exceeding the 3.5% minimum required on an FHA-insured mortgage — or to their closing costs, Dietz advised.
The mortgagee letter permits lenders to purchase the anticipated tax credit from the home buyer. The proceeds from this sale can be used by the home buyer to provide an additional down payment or to pay closing costs, such as escrow for taxes, insurance and community association assessments. The funds can also be used to buy down the interest rate of the mortgage.
FHA-approved lenders are not allowed to place a second lien on the home, he said. Instead, they must secure repayment through a contract with the home buyer.
It is unclear at this time what form the lender option for monetization of the tax credit will take. NAHB will be following this issue and providing updates as they develop.
In all cases, the FHA limits fees associated with either a tax credit loan from a government entity or the purchase of the tax credit by an FHA-lender to no more than 2.5% of the tax credit amount, or $200 for an $8,000 tax credit.
Prospective first-time home buyers should be cautious in participating in programs that offer monetization, Dietz said. If the organization is part of the state government, it is safe to assume that its program is reputable. Otherwise, home buyers may want to check with their local Better Business Bureau or a state or local government’s department of consumer affairs.
Expected Market Benefit
Assessing the impact of the tax credit on the housing market, NAHB Economics earlier this year calculated that it would help to stimulate 160,000 incremental home sales — 101,000 to first-time buyers who receive the credit and another 59,000 to existing home owners who will be able to buy another home after selling their current home to a first-time buyer.
In an update of those projections following the FHA announcement and including the impact of prior state monetization programs, NAHB analysis indicates that the tax credit program now will generate 192,000 incremental home sales, including 121,000 to first-timers and an additional 71,000 to move-up buyers. These transactions will add 73,000 jobs to the economy this year.
More than 560,000 taxpayers claimed the tax credit for sales in 2008, according to data from the Treasury Inspector General for Tax Administration, and NAHB forecasts that more than one million taxpayers will claim the $8,000 tax credit for 2009 purchases.
Under current law, the first-time home buyer tax credit only applies to home sales completed prior to Dec. 1, 2009. More information on the tax rules of the program is available at www.federalhousingtaxcredit.com.
