FREE DOWN PAYMENT ASSISTANCE AND GRANTS ARE NOW AVAILABLE FOR NC RESIDENTS TO HELP YOU BUY A HOME!

FREE DOWN PAYMENT ASSISTANCE PROGRAMS ARE NOW AVAILABLE IN NORTH CAROLINA FOR QUALIFIED HOME BUYERS!

If your income or the need for down payment assistance has kept you out of the housing market, our home buyer programs can give you the boost you need to own a piece of the “American Dream”!

If you need help with the down payment and closing costs, you may qualify for interest-free, deferred, forgivable second mortgages up to 3% of your down payment or other benefits by using a Qualified Realtor / Broker and Lender, or other assistance programs!

Our Real Estate firm, New Home Buyers Brokers and Realty Pros is one of the qualified Brokers in North Carolina who has the knowledge and experience to help you get FREE Down Payment Assistance to stop throwing your money way in rent and to help you buy the home of your dreams! To see if you qualify for one of the programs, call: Kristen Haynes, Broker In Charge, GC, CMRS at New Home Buyers Brokers: 704-905-4062 (Direct) or 1-877-372-2252 (Toll Free).

   ”Helping You Find Your Way HOME”!

www.NewHomesNC-SC.com or khaynes@newhomesnc-sc.com

 

Here are some of the available programs that you may qualify for:

• The N.C. Home Advantage Mortgage™ offers competitive interest rates along with down payment assistance and reduced PMI rates to save you money on your mortgage payment every month, on top of the down payment, which is up to 3% of the mortgage loan amount for FHA borrowers (which normally will cover almost all of the required down payment), and 2% for Conventional borrowers. This down payment is fully forgiven after 15 years. This can be combined with the Mortgage Credit Certificate, for a “double home buyer bonus”!

• The Mortgage Credit Certificate (MCC) enables first-time buyers to save up to $2,000 a year on their federal taxes.
• For both first-time and move-up home buyers, the NC Home Advantage Mortgage™ provides qualified individuals with stable, fixed-rate mortgages and down payment assistance up to 5% of the loan amount. Even better, repayment of the down payment is required only if you sell, refinance or transfer your home before year 15—the down payment assistance is forgiven at 20% per year after 10 years in the home.

  As an added bonus, if you are a first-time buyer or a military veteran, you may also be eligible to combine this program with aMortgage Credit Certificate (MCC) to increase your savings even more! We offer these products statewide through participating lenders.

• The House Charlotte Program provides 10-year, deferred, forgivable loans to qualified Funds can be used to cover your down payment, closing costs, as well as for interest rate buy downs.

• NACA provides credit counseling services, home ownership classes and grants for those who qualify.

• The Good Neighbor Next Door Program is a federal housing program administered by HUD, for Police Officers, Firefighters, EMTs, and K-12 Teachers that offers up to a 50 % discount on the appraisal value of homes in specially designated “revitalization areas”,  as well as “One Hundred Dollar Down” homes that qualify for FHA financing.

The N.C. Home Advantage Mortgage™ 

Available with 30-year, fixed rate FHA, VA, USDA and conventional mortgages, the N.C. Home Advantage Mortgage™ is a perfect match for buyers looking for safe, affordable financing. The mortgages offer competitive interest rates, lower PMI and MIP mortgage insurance rates (saving you more in your mortgage payment every month in MIP and PMI fees), AS WELL AS the FREE down payment assistance. These programs can be STACKED with other assistance programs for eligible borrowers (Charlotte Housing Partnership or NACA funds, VA loans, or other programs and grants available statewide in North Carolina.

Repayment is required only if you sell, refinance or transfer the home before year 15 of the loan – the down payment assistance is forgiven at 20% per year after you live in the home for 10 years, and fully forgiven at 15 years.

For more information on the Home Advantage Mortgage, click here: http://www.nchfa.com/home-buyers/interest-rates

Am I Eligible For The NC Home Advantage Mortgage With Down Payment Assistance?  

You may be eligible for an N.C. Home Advantage Mortgage™ if:

• you are buying a new or existing home;      
• you are a first-time OR a move-up buyer;
• you buy a home in North Carolina and occupy it within 60 days of closing (this is not for investors who will not occupy the residence as their principal home;
• you don’t exceed the income limits for the person on the loan (not the entire household, as in MCC);
• you are applying for a FHA, USDA, VA or conventional loan through a Participating Lender and meet the sales price limits of the loan type;
• you are a legal resident of the United States, and;
• your credit score meets the basic requirements for the program.
• If you choose an FHA, VA, or USDA loan, you will get 3 % towards your down payment. With conventional loans, you will receive 2 % towards your down payment.
• The down payment can be “stacked” with other federal and state programs and with additional seller concessions towards closing costs, if you qualify, Seller concessions are limited to 3 % with Conventional loans, and up to 6 % with FHA loans.
• Click the link below to see if you qualify via the income limits in your area: http://www.nchfa.com/home-buyers/income-limits

What Properties Are Eligible For This Free ‘Down Payment Assistance’ Program?

• New and previously owned single family homes
• Townhouses
• Condominiums*
• Duplexes*
• Manufactured Homes (only new, never occupied, doublewide or greater manufactured homes on permanent foundations)*

*These property types are only available for FHA, VA and USDA loans, not conventional loans.

The Mortgage Credit Certificate (MCC)

If you are a first-time buyer and meet certain income and sales price limits, you may be eligible for a Mortgage Credit Certificate (MCC) worth up to $2,000 a year in tax savings. This federal tax credit can lower your income-tax liability, dollar-for-dollar, leaving you more money to use toward your mortgage. If you qualify, you will be able to claim 30% of the interest you pay on your mortgage if you purchase an existing home or 50% of the interest for a new home (never occupied) – up to $2,000 for every year you live in your home – as a tax credit on your federal income taxes.

MCCs can be combined with the N.C. Home Advantage Mortgage™ and other “stacked, eligible programs”, increasing the savings on your new home – as well as with any other qualifying lender mortgage program, including some adjustable rate mortgages.

How Does The MCC program work?

Suppose you qualify for an MCC and obtain a 30-year, 4% fixed-rate mortgage of $97,000 for the purchase of an existing home (not new construction). The first year’s interest payment is approximately $3,880. The MCC allows you to take a federal income tax credit of $1,164 ($3,880 x 30%) for that year.

If your federal income tax liability is $1,164 or more after you have taken all other credits and deductions, you receive the entire benefit of the MCC tax credit – $1,164. In figuring your taxes, you also claim a deduction for the remaining 70% of your mortgage interest.

If your federal income tax liability is less than $1,164—for example, $800—your tax is reduced by only $800 that year. However, the remaining credit can be claimed on tax returns for the next three years, if tax liability increases. Note that depending on your individual tax situation, the MCC may not always provide a tax credit benefit to you in a given year depending on your overall tax liability.

You can receive an immediate benefit from your MCC tax credit by filing a revised W-4 (Employee’s Withholding Allowance Certificate) with your employer. In this example, your federal income tax liability would be reduced by $97 a month ($1,164 ÷ 12). The extra $97 increases your take-home pay and helps make your house payments affordable.

The House Charlotte Program

Who Is Eligible For The House Charlotte Program?

Families with incomes that are 110% or less of the HUD Area Median Income are eligible for assistance. Participants must complete a pre-purchase homebuyer education program. The home must be a family’s primary residence and be located in one of designated House Charlotte eligible areas. Maximum purchase price of home is $155,000.

How The Program Works:

You must use a Registered Broker / Realtor and Lender to find and finance a home. Banks apply for the program on behalf of qualified buyers. To find out if you are qualified, contact your approved Broker / Realtor, who can also set you up with an approved lender.

The selected home must be located in one of the approved Charlotte Neighborhood Statistical Areas (NSAs). Each Charlotte neighborhood is further broken down into Neighborhood Profile Areas.  To determine if the property of interest is eligible, and address search must be completed through the mapping application.  Generally, these homes are located in disadvantaged areas that are “up and coming” but still have some growing to do.

Once your Realtor finds you a house in an eligible area, you will then ask your approved lender to apply for the House Charlotte program. You also must complete a homebuyer education program. In order to register for a home buying course, buyers may contact the Community Link or any other HUD-approved Counseling Agency to register for the program. There are income limits and area limits to be approved for this program.

• Provides funding up to $5,000 for families with income above 80% AMI, up to 110% Area Median Income (AMI)House Charlotte Program Image.
• Provides funding up to $7,500 for families with income at or below 80% (AMI)
• Provides funding up to $10,000 for families with income at or below 60% AMI in select House Charlotte areas.
• Provides funding up to $10,000 for buyers who are employed as sworn CMPD police officers. This is a 5-year deferred, forgivable loan.

NACA:

The Neighborhood Assistance Corporation of America (“NACA”) is a non-profit, community advocacy and homeownership organization. NACA’s primary goal is to build strong, healthy neighborhoods in urban and rural areas nationwide through affordable homeownership.

NACA has made the dream of home ownership a reality for thousands of working people by counseling them honestly and effectively, enabling even those with poor credit to purchase a home or refinance a predatory loan with far better terms than those provided even in the prime market.

The NACA homeownership program is one answer to the huge subprime and predatory lending industry. NACA has conclusively shown that when working people get the benefit of a prime rate loan, they can resolve their financial problems, make their mortgage payments and become prime borrowers. NACA’s track record of helping people who have credit problems become homeowners or refinance out of a predatory loan debunks the myth that high rates and fees are necessary to compensate for their “credit risk.”

 NACA has access to billions of dollars of mortgage funds for primarily low- and moderate-income people and people purchasing in low to moderate-income communities.

Eligibility and Program Details:

Purchase and Rehab loans

DOWN PAYMENT: None

CLOSING COSTS: None (paid by lender)

INTEREST RATE: One percent below the prime market rate

Current Interest rate:  30 year fixed (as of )

BUY-DOWN: Funds to Permanently Reduce Interest Rate

One percent of mortgage amount reduces interest rate by one quarter of a percent (.25%). This is a tremendous added benefit.

APPLICATION FEE: None (paid by lender)

POINTS & FEES: None (paid by lender)

Lender Grants: Lenders with NACA provide a grant for low and moderate income (“LMI”) homebuyers and those purchasing in LMI communities that matches a down payment with funds for an additional buy-down. You must become a member, attend Home Counseling sessions and the property must be located in a NACA, Urban Designated Housing area to utilize this program. You lso must use a NACA approved lender and Realtor / Broker.

CREDIT HISTORY:

Perfect Credit Not Required

Member’s personal payment history evaluated without consideration of his/her credit score.

P.M.I.: (Private Mortgage Insurance) None

Membership: (Neighborhood Stabilization Fund) None

OTHER TERMS: No yield spread premium; No pre-payment penalty; No balloon payment; No required credit life, or other unnecessary or overpriced insurance.

The Good Neighbor Next Door Program: 

Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.

How the Program Works: 

Eligible Single Family homes located in revitalization areas are listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for seven days.

How to Participate in The Good Neighbor Next Door Program: 

Call a HUD- Approved Broker in North Carolina who will help you check the available listings for your state. Follow the instructions from your Realtor to submit your interest in purchasing a specific home. If more than one person submits on a single home a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD’s regulations for the program.

Eligibility Details:

This program is only available to Police Officers, Firefighters, EMT’s, and K-12 Teachers.

Those buyers can get a 50 percent discount off the HUD appraised value of a home in specially designated ares. For example, if HUD lists a home at $100,000, you can buy it for $50,000 provided, you occupy the home as your personal residence for the required occupancy period. If you qualify for any FHA-insured mortgage program, your down payment is only $100 and you may finance closing costs.

You must live in the home for 36 months after the purchase.

The program is available for those with cash or using Conventional, FHA, VA financing.

This program can be “stacked” and combined with FHA financing (even with 203 K or 203 B “Rehab” loans.

If the buyer uses and qualifies for FHA financing, they also might qualify for the “$100 Down Payment” plan. Call your Realtor to see what you qualify for and what is available on the market with this $100.00 Down Payment program (areas are limited).

HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this “silent second” provided that you fulfill the three-year occupancy requirement.

CREDIT REPAIR COUNSELING COMPANY:

In need of credit repair? Our lenders like www.HOPE4USA.com. They are excellent  and very price conscious compared to other similar companies. They are  for-a fee service provider, but used by many major lenders for credit repair, and are very economical compared to other companies.

Here’s a FREE, informative guide for you from Hope 4 USA, so you can start taking steps to rebuild your credit score so you can purchase the home of your dreams:

 http://www.hope4usa.com/free-credit-repair-toolkit

Ready To Start Searching For Your Next Home? See What’s Out There Today!

Start your FREE Home Search today by calling Kristen Haynes at new Home Buyers Brokers at 704-905-4062 or by downloading this new, FREE App on your Smartphone or Tablet!

To Use This 100 % FREE, “Home Scouting” Home Search App:

1. Go to your phone’s App Store and download the “Home Scouting” application.
2. Enter VIP Code: 7049054062 (no dashes).
3. Create your own anonymous User Name And Password- then you can use it to log in on a desktop, too! It’s that easy!

We are also MILITARY FRIENDLY and support our Armed Forces and Veterans!

Contact Us To See What Programs that YOU Qualify For! It’s 100 % Confidential- and it’s always 100 % FREE!

Call:  New Home Buyers Brokers / Realty Pros, Realtors / Brokers in NC / SC: 704-905-4062 or Toll Free: 1-877-372-2252

Do you have further questions about what programs you qualify for? Call or email us, below:

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Brought to you by:

       Kristen Haynes, Broker In Charge, GC, Certified Military Residential Specialist

Direct: 704-905-4062  or Toll Free: 1-877-372-2252

 Email: khaynes@newhomesnc-sc.com

Web: www.NewHomesNC-SC.com

Copyright © 2016 New Home Buyers Brokers / Realty Pros

NEW FICO ‘SCORE NINE’ CREDIT SCORING SYSTEM ANNOUNCED, AND AN FHA LOAN MARKET UPDATE

NEW FICO SCORING SYSTEM ANNOUNCED AND FHA LOAN MARKET UPDATE March 18, 2014 Breaking News. FICO has announced that it will release the next broadly available version of the FICO Scoring System beginning this summer. INTRODUCING FICO ‘SCORE NINE”: Using a new, multi-faceted modeling approach, which combines sophisticated in-house analytic technology with insights gained over 50 years of building credit risk models, FICO ‘Score Nine’ will provide the best-in-class predictive power across all of the major credit product lines—home loans, auto loans, credit cards and personal loans—from loan originations, all of the way through managing and servicing the loan. FICO has also addressed lenders’ concerns regarding score consistency across the three major credit bureaus, and compatibility with previous FICO Score versions to ease adoption. The FICO Score continues to help keep lenders aligned with key compliance objectives and relevant government regulations. The FICO Score is the most widely used credit score in North America. Lenders purchased more than 10 billion FICO Scores in 2013, and 90 percent of all U.S. consumer lending decisions use the FICO Score. WHO WILL UTILIZE THE NEW FICO SYSTEM?: The 25 largest credit card issuers, the 25 largest auto lenders and tens of thousands of other businesses rely on the FICO Score for consumer credit risk analysis and federal regulatory compliance. “To become a widely adopted industry standard, a credit score must work well across industries, across all lending product lines and across the entire credit lifecycle,” said James Wehmann, executive vice president of Scores at FICO. “The major changes in the lending environment over the last few years demanded that we take a different approach to building a score that will continue to perform consistently well in various situations. We devised an innovative approach to developing FICO Score Nine that enabled us to leapfrog our own industry-standard benchmark. Our goal is to continue to support a financial ecosystem that includes lenders, securitization investors, rating agencies, regulators and other stakeholders who need a common risk benchmark.” Source: NAMP Daily – www.nampdaily.com HOMEPATH AND HOME STEPS OFFER FREE CLOSING COSTS AND OTHER INCENTIVES: Government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac recently introduced new incentives to bolster home sales through their HomePath and HomeSteps programs, respectively, which are designed to help the firms liquidate the real-estate owned (REO) properties they hold in their portfolios. Specifically, Fannie Mae is offering up to 3.5% in closing cost assistance on HomePath properties available in 27 states during the FirstLook period. During the FirstLook period, owner-occupant or public entity buyers are able to submit offers on HomePath properties, giving them the opportunity to purchase homes without competition from investors. Fannie Mae recently announced the extension of the FirstLook period from 15 days to 20 days. To be eligible for the incentive, the initial offer must be submitted between now and March 31, 2014, so there’s not a lot of time left to utilize this program (unless it’s extended). Homes using this incentive must also close on or before May 31, 2014. The incentive will offer qualified buyers up to 3.5% of the final sales price to pay closing costs. In addition, home buyers have a choice of $500 incentives they can use towards condominium association dues, flood insurance premiums or the home warranty of their choice. To qualify for these additional incentives, the closing must settle on or before May 30, 2014. The promotion does not apply to investor purchases, auction sales, sealed-bid sales and bulk sales, Freddie Mac reports. Source: MortgageOrb, www.mortgageorb.com For a list of available properties, call your local Realtor or go to: http://www.homepath.com.   AN FHA UPDATE AND PREDICTIONS FOR THE UPCOMING YEAR: Following the first-ever Treasury draw required by the Federal Housing Administration this year, the agency says it is back on stable footing and does not anticipate requiring Treasury assistance in fiscal year 2015. As reflected in the Obama Administration’s proposed budget for the coming fiscal year, both FHA’s forward and reverse lending programs are expected to be cash flow positive with the Home Equity Conversion Mortgage program anticipated to have a negative subsidy rate at -0.23%. A positive credit subsidy indicates the program would require cash to cover losses. In this case, however, the HECM program is expected to perform on its own, slightly above its break-even point. The earlier bailout to the tune of $1.7 billion was largely attributed to losses in FHA’s reverse portfolio. “The budget estimates the Mutual Mortgage Insurance Fund will have a positive capital reserve balance of $7.8 billion,” said FHA Commissioner Carol Galante of the entire fund outlook following the budget release. “We will not require a mandatory appropriation from the Treasury this year.” FHA touted its performance and positive outlook in the coming year, pointing to achievements such as reducing chronic homelessness by 16% and assisting 450,000 homeowners facing foreclosure through loss mitigation assistance in the midst of last year’s budget sequester. “This is more remarkable given the context in 2013,” Housing Secretary Shaun Donovan said. “Given the sequestration that cut across the entire federal government budget, HUD was faced with finding ways to cut 5% from our budget with very little time to prepare and just seven months left in the fiscal year. We made some extremely difficult choices. We’re proud of what we did to provide best possible outcomes.” Source: Reverse Mortgage Daily – www.reversemortgagedaily.com Congress’s lack of progress on reforming the U.S. housing-finance system shouldn’t be “an excuse” to delay rebuilding the market for private-label mortgage securities, a senior U.S. Treasury Department official said recently. “Many investors have told us that they can and want to take mortgage credit risk,” said Michael Stegman, housing-finance counselor to the Treasury secretary, in prepared remarks at a research conference in New York. Adding simplicity and transparency is a key first step, he said. “To get back to an efficient, responsible, and sustainable level of complexity, and to rebuild trust, the new issue non-agency market must first follow a path of greater standardization and transparency,” Stegman said. Federally controlled buyers Fannie Mae and Freddie Mac have been in a conservatorship since 2008, an arrangement that has lingered with U.S. lawmakers disagreed over the appropriate role for government in housing finance. Source: Market Watch – www.marketwatch.com. EASIER QUALIFYING EXPECTED FOR FHA MORTGAGE BORROWERS: First-time and low-income borrowers may have an easier time qualifying for a Federal Housing Administration loan. Ginnie Mae, a government agency that issues bonds backed by FHA loans, reports that the average credit score on FHA-backed loans fell to 680 in 2013, and the average debt-to-income ratio rose to 40.3 percent — both indicators that credit may be easing. In comparison, Ginnie Mae reported in January 2013 that the average score was 701 and the debt-to-income ratio was 38 percent. “The FHA theoretically allows scores as low as 580,” the L.A. Times reports. “But lenders, buffeted by defaulted loans and demands that they buy back troubled loans that they sold, generally have set standards higher since the financial meltdown.” Source: The Los Angeles Times – http://www.latimes.com A Note from Kristen: Actually FHA allows scores down to 500, but requires a down payment of 10% below 580. But many lenders do not want to underwrite loans under 640 (580 is the absolute minimum I have seen here in Charlotte, NC, and those loans also come with higher loan origination fees and interest rates). While many lenders have lowered minimum scores, FHA’s quality assurance initiatives ensure that lenders will still be underwriting their files under a microscope and looking at the loans carefully, because lenders now have to buy back their “bad” or defaulted loans if any errors are found in the original underwriting process.  Copyright © 2014 Realty Pros / New Home Buyers Brokers, Inc. Kristen Haynes, Broker In Charge, GC, CMRS  Web: www.NewHomesNC-SC.com         Name(required) Email(required) Website Comment(required) Submit Δ

 

FANNIE MAE IS NOW GIVING AWAY A FREE 3.50 % DOWN PAYMENT FOR A LIMITED TIME TO HOME BUYERS WHO QUALIFY!

 FANNIE MAE IS OFFERING A FREE 3.50% DOWN PAYMENT (AND OTHER INCENTIVES) FOR A VERY LIMITED TIME!

Please distribute to your network, so as many people as possible have the opportunity to benefit from this unique, one-time deal, never before offered by the federal government!

To reduce its inventory of foreclosed homes, Fannie Mae is now offering qualified owner-occupant purchasers cash incentives toward closing costs in the amount of 3.5% of the purchase price of a home!

By Kenneth R. Harney February 27, 2014, 5:00 a.m.

WASHINGTON — If you’re planning to shop for a home in the next few weeks, here’s an early spring buying season come-on that just might save you some money if you qualify. Fannie Mae, the largest mortgage investor in the country, has a bulging portfolio of houses acquired through foreclosures nationwide. About 31,000 of these properties are listed on its resale marketing site.

To move them quickly out of inventory, Fannie Mae temporarily is offering qualified owner-occupant purchasers — but not investors until after a waiting period — cash incentives toward closing costs of 3.5% of the purchase price. But you have to submit your initial offer no later than March 31 and close by May 31.

What sort of houses are we talking about? Have your Realtor send you information or go to: www.homepath.com and you’ll see. They run the gamut — from a one-bedroom condo in San Diego to a four-bedroom, four-bath single-family home in suburban Montgomery Village, Md. Some states have thousands of HomePath listings online: Florida has nearly 12,000; Illinois, 4,360; Ohio, 2,800; California, more than 2,300; Washington state, nearly 1,800; and Nevada, about 1,400.

Asking prices range from $30,000 to $600,000 or more. On a $400,000 house, the 3.5% closing cost incentive would amount to $14,000. • Also • Finding ways to help young adults make their first home purchases • Strategies for getting a mortgage amid tougher federal rules • Mortgage servicer shenanigans keep consumer watchdogs busy. To ensure that buyers who intend to occupy its homes get an opportunity to fully check them out and bid without competition from investment groups offering all-cash deals, Fannie has instituted what it calls a First Look program. It essentially prohibits bids from investors on properties during the first 20 days after listing (30 days in Nevada).

After that, investors are free to jump in. Each First Look listing has a countdown clock attached to it that indicates the number of days remaining before bidding is opened to all comers. The new 3.5% closing cost offer is available only during active First Look periods from mid-February through March, so there’s not a lot of time to get involved. Bidders will need to indicate upfront that they want to be considered for a closing-cost discount. Who is eligible? First, you’ve got to be a bona fide owner-occupant purchaser and commit to live in the house as a primary residence for at least a year.

You’ll need to fill out a certification to that effect that can be found on the site. Properties are not available in all states. You don’t have to be a first-time buyer, though the Fannie program is likely to attract substantial numbers of them. The 3.5% closing cost discount helps with one of the biggest problems faced by first-timers — upfront cash. As with most home purchases, you’ll need to be able to qualify for mortgage financing. Though Fannie may end up owning or securitizing the loan you obtain, it won’t be financing you directly.

On HomePath purchases, you shop for a mortgage just as you would on any other house. Ideally, you nail down a financing source and get prequalified for mortgage money up to a specific dollar limit at current interest rates. If you’ve already located a First Look property and qualify, the lender is likely to take the 3.5% closing cost incentive into consideration in evaluating your application.

While you shop on HomePath, however, keep this important factor in mind: These are foreclosed, previously occupied homes. Though some of them are repaired, painted and spiffed up before they are listed, many could use some additional work. They are sold “as is” and that’s built into the pricing. Fannie identifies what it calls “improved” properties on the HomePath site — those that have undergone significant repairs — with either the “Home Depot” logo (when repairs have been made by contractors from that company) or a hammer and roof symbol (when repairs have been completed by independent contractors hired by Fannie).

Your Realtor will help you make a bid on the property of your choice. It’s best to use the service of an experienced Realtor due to the myriad of contract provisions that need to be met throughout the process (like home inspections, de-winterizing a property for inspections, using an approved lender and attorney, etc). You may also want to check out other sources for distressed properties with your Realtor, such as HUD homes: www.HUD.gov.

Your Realtor / Broker will be experienced with distressed properties, such as foreclosures, pre-foreclosures, and HUD homes, and will be a vital resource to help you navigate through the maze of these type of purchases (one thing is for sure- these deals do not work like “normal” home purchases).

If you can’t find the First Look house you want, don’t give up. Freddie Mac, the other giant federal mortgage investor, also has thousands of foreclosed homes that it’s trying to dispose of — and its own First Look program — at its Home Path marketing site. Though Freddie Mac currently has no closing cost incentive offer, it does provide a $500 allowance toward the purchase of a home warranty policy, and it promotes special mortgage financing options on houses in some areas. If you qualify, that could mean a loan with no mortgage insurance, no appraisal and a 5% maximum down payment.

Want to know how much home you can qualify to buy? Contact Jenny Stoner or Kim Venable of Fairway Independent Mortgage Corporation: http://fairwaync.com

These are definitely worth checking out, whether you are on the fence about buying a home, or you are a seasoned investor looking for an extra-special deal!

Contact me for a list of properties in your area:

Direct: 704-905-4062 or Toll-Free: 1-877-372-2252.

Kristen Haynes, Realtor, BIC, GC, CMRS New Home Buyers Brokers / Realty Pros

CONTACT ME:

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Email: khaynes@newhomesnc-sc.com

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http://www.youtube.com/watch?v=0VT-dxbePQs&feature=youtu.be

Broker In Charge, Unlimited Building General Contractor, Certified Military Residential Specialist
Boards: 2009-2014, Professional Standards Committee, Charlotte Regional Realtor Association
2008-2009, Independent Broker Owner Council, Charlotte Regional Realtor Association
Member: Charlotte Regional Multiple Listing Service,Charleston-Trident Multiple Listing Service, National Association of Realtors, National HUD Broker, Charlotte Regional Realtor Association, NC Licensing Board for General Contractors, BBB. EHO

Tips on How To Buy Foreclosure, HUD Homes and REO / Bank Owned Properties

 Expert Tips on Buying Foreclosure Properties

Brought to you by Kristen Haynes, Realtor / Broker In Charge of New Home Buyers Brokers / Realty Pros. Licensed in NC / SC since 1992.

If you’re thinking about purchasing a Foreclosure HUD Home or Bank Owned (REO) Property, use this informative guide to explain what happens throughout the complex Foreclosure ‘home buying’ process.

This was prepared to be an informative guide in the Foreclosure / Bank REO Purchasing process. The information contained herein is designed to create an informed consumer and to lessen the stress of the home buying process for future home buyers who are considering purchasing a Foreclosure, Pre-Foreclosure, bank owned (REO) or HUD property. Here’s a helpful link to HUD about buying government owned properties and foreclosures: (http://portal.hud.gov/hudportal/HUD?src=/topics/buying_a_home).

How to make an Offer- Your Realtor / Broker will help you find and make an offer on all foreclosure or pre-foreclosure properties that interest you. Once you identify the “right” property, you and your Realtor will fill out the offer using the bank or government (HUD)’s forms and addendums (not using your state’s  “normal” Offer To Purchase and Contract form that is typically used in your area). The MOST important thing to remember when purchasing a foreclosure, short sale (pre-foreclosure, where the owner is still on the title, foreclosure proceedings have commenced, but the bank does not yet have the house back), HUD home or distressed bank property is that NOTHING works the same as what you’re used to!

For statistics and trends in your area, and to get a “feel” for what is happening in your particular market, contact your local Realtor. You can do a nationwide search on our web site at: http://www.newhomesnc-sc.com. Another good source to start gathering information is: http://www.realtytrac.com/statsandtrends. Simply pick the state, city or zip code that you are interested in, and it gives you loads of market information to help you start your search.

REO (Real Estate Owned) Departments & Asset Managers require that all offers are to submitted be on their “Offer Worksheet”, or the online offer equivalent. If you are purchasing a HUD home, you must use HUD specific forms, not available to the general public. It must be filled out, in person, in triplicate, plus your Realtor / Broker will be required to make an online bid on your behalf. Bids must be submitted by an approved HUD Broker (go to: http://find-a-hud-home-today.com/find-a-hud-approved-broker). You must also use an approved HUD lender, and use the HUD approved attorney for your area. Double check before you start the process that your lender is HUD approved, if you are getting a loan.

You will have to provide a bank or cashier’s check with the offer in the amount that HUD specifies as the minimum (this is based on your offer price), a copy of your driver’s license or equivalent, and your social security number. If one tiny item is missing or out of place, your bid will be rejected, and you and your Realtor could lose the bid that would have been awarded to you. In most cases, it will then go to a second party, and you will have to start the house hunting process all over again!

It’s important to note that in most circumstances, HUD or the banks will have a “waiting period” of at least 11 days for investors- ie, non owner-occupants. They usually reserve a set period of time to try to first sell the homes to people who will occupy them, not rent them out. You will have to make a statement as to which type of buyer you are, and not being honest about it is a federal crime.

In addition to the contract, there are many additional addendums that you will also be required to sign. People feel like they are in “paperwork overload”! These addendums basically state that that you are purchasing the home “As-Is”, what your purchaser status is (ie, owner occupant or investor), and have other clauses to protect the seller. With HUD homes, usually there will be a “condition property report” attached, which shows you the result of any inspections that have already been done on the property and the problems with the home that have been identified. That does not mean that the inspections, however, FOUND everything. The homes are still sold “as-is”, buyer beware. Most pre-foreclosures and foreclosures do NOT have a property disclosure, so it’s best to have the home inspected or walk through with your friendly GC before you make a bid. Once your offer is awarded and the contract is executed (signed), you have a binding contract, and your earnest money is fully at risk if you try to back out because you found a defect later on.

The Bank Asset Manager’s role: – Your Realtor will also have to provide an Excel worksheets to the person handling the foreclosure file, and this person is the Bank Asset Manager. This worksheet simplifies the process for the Bank’s Asset Manager, because each Manager has hundreds of assets under management, and often in multiple states with vastly different forms. This is the main reason why people complain that they “don’t hear back or get updates” like they expect with their other “normal” past home purchase offers. You may end up in a multiple bid situation, and not know for weeks or months whether you “won the bid” or not. But remember- no news is good news, until you hear otherwise. Upon acceptance of the offer, all documents are sent by email or mail to the seller/ Asset Manager to your Realtor / Broker.

Presenting an Offer- All offers must be presented with earnest money (with a certified / bank check) AND a mortgage pre-approval from a major lender. They may even require you to get “pre-approved” with their own lender (though you do not have to use them for your financing). There are NO exceptions to the rule, so get approved with the lender PRIOR to submitting an offer, unless you are paying cash. Cash is always “king” when banks weigh different offers on the table- they don’t like worrying that a buyer’s loan may not be approved while it ties up their property. They know that by waiting for your loan approval, they may lose another buyer in the meantime. They will accept no Promissory notes, or offers contingent upon the sale of another property. “Cash” offers MUST be accompanied by proof of funds from your financial institution, proving that you have enough funds to complete the purchase.

How long before we (the Agent & Home Buyer) hear back?- The timing varies depending on the institution, the time of the month (month’s end taking longer), and the Asset Manager’s file load. Often the institutional seller is in a different time zone that creates delays in response times. Additionally, the more complex the offer, the more conditions that have to be met (inspections, appraisal, etc.), the more likely that approvals or responses have to come from “management,” again delaying response times. Your Realtor will be constantly checking the status of their files- and they will forward the information as soon as it becomes available to them.

Expect a slower-than normal process with little communication- Bank Asset Managers have a large number of foreclosures and pre-foreclosures under management, and do not respond to multiple and/or daily queries, no matter how anxious you are to hear news of your offer’s status. Continued multiple and/or daily queries slow down the process for everyone involved.
Try to remember that while these deals can be stressful, your Realtor, the other Realtor, and the bank are all working towards the common goal of closing on the subject property. Bank deals and short sales do not operate with the “same set of rules” as other homes or purchases you may have made in the past.
IF YOU HAVE NOT HEARD ANY RESPONSE FROM THE BANK, IT IS BECAUSE THERE IS NO UPDATE TO GIVE YOU YET. THERE MAY BE MULTIPLE OFFERS ON THE PROPERTY, OR THEY MAY BE IN THE “DUE DILIGENCE” PROCESS, OBTAINING A BPO (MARKET VALUE ANALYSIS) OF THE HOME, OR MAY BE WORKING THROUGH A FORECLOSURE HEARING OR BANKRUPTCY TRUSTEE.

Counter offers and extensions- Since all offers are submitted on the worksheet or online, if your offer is countered, it will be in the “worksheet” format, which will probably be unfamiliar to you. Once an offer is accepted, the entire “package” ie, the offer is put on the REO worksheet, counters addends, copy of the check, etc, is sent to the REO department for additional bank signatures. At this time, you, as the buyer, may be required to sign additional addendums. The banks or HUD *may* grant you an extension if, through no fault of your own, you need an extra week or two to close the loan. They have forms for that that your Realtor / Broker can obtain. However, they do not HAVE to grant an extension. That’s why it is a good idea to get your ducks in a row, your loan fully approved, and any appraisals done asap. They will also charge you for each day of the extension!
Why have we received the seller’s offer or counter offer with no signatures?- These forms are generated by the Lender’s REO manager and often come to the listing agent as an email attachment once the verbal agreement has been accepted. Once an agreement is in place, the file is then given to corporate management for signatures to match yours.

If you are obtaining a loan to purchase the property, this is the time to make sure that you get all of you paperwork- including all W2s, tax forms for the past two years (yes, they must be filed with the IRS, not just “in process for you to use that tax year to qualify), all wage or alimony and child support statements, any filed separation agreements, etc.) to your lender (unless it’s a cash offer), so they may begin the loan process. Realistically, you should start this process and be “ready to strike” before you find the perfect home, because it will make your deal MUCH stronger to the bank’s underwriters if you are getting a loan. Keep in mind that when dealing with a bank, they may have odd hours, in different time zones, and do not work weekends- so seller signatures can take a week or two to get back. Also, if you cause a delay in closing, Asset Managers will charge “per diem” charges (of they don’t cancel your bid and take another contract) if the loan is not ready to fund and close by the agreed-to  closing date.

Verbal agreements- Once you are informed that your offer is accepted, it is. (acceptance may be accompanied by a worksheet that your Realtor may be required to also have you sign). Generally, this will be emailed to your Realtor by the Asset Manager. REO departments and asset managers give the “ok” verbally, and then their worksheet automatically goes to their manager for signatures. Some asset managers require original signed documents. Be prepared to overnight all original documents and addenda with accepted offer.

Time frames-  Generally you will have 30 to 45 days from mutual acceptance of the contract to close the transaction. If you are paying cash, you could close in as little as 14 business days in most cases- IF the bank is ready. They set the closing time frame. With HUD, it is generally 45 days. With banks, it can be anywhere from 15 days to 60 days. With Pre-Foreclosures, it depends on where the bank is in the process of foreclosure. There are many steps that the bank must take to either foreclose and re-sell or clean up title and issues with the seller prior to foreclosure to make it all happen. Often, the proposed closing date on the original offer is unrealistic due to the elongated negotiation and acceptance process with the REO departments. The Asset Manager knows that there is no way that you can close in two weeks, unless you are paying cash and have no upcoming appraisal or inspections. Asset Managers know that appraisals, inspections and the loan process take time. They will assume that you have taken the time prior to making an offer to inspect the home and to become pre-approved for the loan and that there will be no trivial delays beyond the 30 (to 45) day closing period. Read the bank addendums carefully-there is usually a per diem late fee assessed for delayed closings- if they allow you to extend, at all.

Loan delays- The seller will not suffer delays due to the purchaser’s lender not performing in a timely manner. Begin your inspections upon being alerted that your offer is accepted.

Short sales- Short sales can take four to six months, or LONGER, depending on where the seller is in the process. With short sales, your bid is open for overbidding by other purchases while your offer is on the table, so you could wait six months for a home, only for the bank to hold off on signing any offer until the last minute- and then it could go to another purchaser. Be VERY careful with short sales if you are not a seasoned investor.

Also be aware that most lenders will not allow you to “lock your rate in” without a substantial charge for more than 60 days. If possible, purchase your property with cash (even if from a home equity line). Banks believe “cash is king”- there will be no loan issues or delays, so they will take your offer over another one with a loan if they are anywhere near close if you have cash and they have to get a loan.

If you have to get a loan, make sure that you are FULLY loan approved (you have gone to the lender and have been through the entire approval process (you have given your paper copy W2’s and past two years of wage and taxes to the lender and underwriting has approved your loan, subject to only an appraisal on the property), it will also help your chances exponentially to be the winning bidder.

Closing and title companies to close escrow- Like it or not, the REO company usually chooses the closing attorney or title company. This is due to the fact that they have significant amounts of title work done during the foreclosure process and it makes it easier to use companies who are familiar with their unique process. It may take a week to receive closing instructions. It is typical during this time to hear “nothing”. This is normal.

Inspections & utilities- Most times, the utilities are off at the home you have made an offer on, or it has been winterized, and has to be “de-winterized” for the utilities to be turned back on for a home inspection. It is absolutely essential that you give the bank up to a week’s notice of your upcoming inspection dates, prior to scheduling your inspection.

You, as the buyer, generally are responsible for any fees to re-connect the utilities. Make sure to have your Realtor check on who is responsible for paying these fees and / or calling utility companies to set these up. Addendums with your contract usually require that you, as the buyer, assume those responsibilities and associated fees.

It is not a bad idea to visit the property a couple of days prior to the inspection to check if the utilities are actually ON and that the systems are working. For example, you may need to light a water heater pilot light to allow the water heater to heat up enough over a day to be able to be checked.

“As-Is” condition– Banks sell property assets in AS-IS, Where-IS condition. As a rule, only in certain instances will the bank consider repairs. What you ask for upfront is all you will get. Asset managers have “caps” on concessions they are allowed to give on each file and took the “As-Is” condition into account when they accepted the terms of your offer. Repairs will not be authorized to be completed prior to closing, so you have to close to start work, clean the carpeting, etc.

Closing– Congratulations! Your Realtor will make sure to help you complete all lender requirements to obtain final underwriting (don’t be surprised when the underwriter kicks the loan back multiple times, asks for multiple explanations and additional documents- this is the lending environment we live in today). Expect to be exasperated and hounded for documents at any given moment and you will be better prepared for the onslaught! Many people are like, “what, do they want my first born”?!?

If you are obtaining a loan, expect to be inundated with seemingly ridiculous requests throughout the process- even two days before the closing, your Realtor / Broker will work with the lender, bank, Asset Manager, Attorney and other service providers to get you through to a successful closing. They will help review the loan package, HUD 1 closing statement, and help you navigate your way through to a successful closing on your “foreclosure home of choice”!

If you have any further questions or need help finding a foreclosure home, call me anytime- we are “Foreclosure Specialists” in the greater Charlotte, NC and Charleston, SC metropolitan areas.

Stay Tuned for the next blog in our series: “How to Find the Best Foreclosure Properties”

Call or email me today:
Toll Free: 1-877-372-2252 or Direct: 704-905-4062
Kristen Haynes, Realtor, BIC, GC, CMRS
New Home Buyers Brokers / Realty Pros

Email: khaynes@newhomesnc-sc.com
Web: http://www.NewHomesNC-SC.com

        

 

                                                                                                                                                   Kristen Haynes, President / Broker In Charge, Realtor, NC / SC

Unlimited Building General Contractor, Certified Military Residential Specialist

Boards:
2009-2014, Professional Standards Committee, Charlotte Regional Realtor Association

2008-2009, Independent Broker Owner Council, Charlotte Regional Realtor Association

Member: Charlotte Regional Multiple Listing Service,Charleston-Trident Multiple Listing Service, National Association of Realtors, National HUD Broker, Charlotte Regional Realtor Association, NC Licensing Board for General Contractors, BBB / MLS / EHO

Copyright 2014 New Home Buyers Brokers, Inc. / Realty Pros