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Archive for the 'Buyer Information' Category

Breaking News: First Time Home Buyers Can Use $8k Tax Credit as Downpayment!

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment.

Donovan’s remarks came in an address to several thousand REALTORS®, including 130 from Michigan, who are in Washington D.C. this week for the annual REALTORS® Midyear Legislative Meetings & Trade Expo.

Secretary Donovan said that important changes, which the National Association of REALTORS® has been calling for, will help consumers purchase a home. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment,” Donovan said. According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Read more here.

$8,000 First Time Home Buyer Credit Explained

Tags: First time home buyer, first time home buyer tax credit

Oakland County Offers FREE Loans to Buy Foreclosures

Last week Oakland County introduced a plan to help get some of the vacant foreclosed homes off the market in select Oakland County communities.  Their press release follows.

I need to call the county and ask some questions.  The program seems very generous and should help sell some foreclosed homes.  I am not sure why some communities were left off of the list.  For example, Birmingham is on it, but Beverly Hills is not.  Royal Oak Township is on, but the city of Royal Oak is not.  No go for Bloomfield Township, but a yes for Troy.  This has me questioning how communities became eligible.

As much as I know the foreclosures need to get off the market, this gives them a steep advantage over the regular resale homes that are already severly challenged for finding buyers.  The foreclosures are selling, for the most part, without much additional help.  Low prices do that.

“Pontiac, Michigan, February 17, 2009 — More families in Oakland County may be able to find homeownership within their means thanks to a new program administered by the Oakland County Community & Home Improvement Division. The Oakland County Home Buyer Program is aimed at helping low and moderate income families take ownership of vacant, foreclosed single family homes and condominiums as their primary residence.

An informational workshop for prospective homebuyers will be held Saturday, February 28, from 9 a.m. to noon at the Oakland County Executive Office Building Conference Center, 2100 Pontiac Lake Rd., just west of Telegraph Rd., in Waterford. Pre-registration is not required.

“Families who thought they could never afford their own home now have the best opportunity to become homeowners through this unprecedented program,” Oakland County Executive L. Brooks Patterson said.

Oakland County can provide no-interest loans for down payment assistance, closing costs, home improvements or other financing. The homebuyer must prequalify for a fixed rate mortgage loan from a lending institution. This loan represents 51% of the purchase price. Oakland County will finance the remaining 49% of the purchase and rehabilitation costs up to $100,000. The homebuyer must also provide $2,000 to initiate the purchase. The homebuyer only pays on the conventional mortgage obtained from their lender. Payment on the down payment and home improvement loans is deferred until the property changes ownership.

Homebuyers with incomes at or below 120% of Area Median Income (AMI) are eligible for assistance. For example, a family of four earning up to $83,900 per year is eligible under this program.

Funding for the Oakland County Home Buyer Program is provided by the U.S. Department of Housing and Urban Development’s (HUD) Neighborhood Stabilization Program (NSP). This one-time $17.4 million emergency funding supplements the Community Development Block Grant (CDBG) program to purchase foreclosed homes at a discount, and rehabilitate or redevelop the homes to stabilize neighborhoods impacted by foreclosure and abandonment, and reverse the decline of neighborhood housing values.

The Oakland County Home Buyer Program covers properties in select Oakland County communities. Contact Farmington Hills, Pontiac, Royal Oak, Southfield, or Waterford directly to inquire about home buying assistance programs in their communities.”

You can find more information on the programs on the county’s web site.  If you need a Realtor to guide you through your purchase, I would be happy to assist you.

Photo by TW Collins

Tags: Birmingham mi foreclosures, oakland county foreclosures., troy mi foreclosures

First Time Buyers’ Tax Credit: Details for the Southeast Michigan Buyer

Yep, you Metro Detroit first time home buyers who have been thinking about stopping renting and starting owning now have 8,000 new reasons to get hopping and start shopping.  Uncle Sam is giving you that much in good ol’ US dollars.  You’ll see it as a credit on your 2009 tax return, so it could end up as a check in your mailbox in April.

We’ll give you the highlights:

• Eligible Property – any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.
• Income Limit - Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).
• Eligible First Time Buyer – Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.
• Repayment – No repayment for purchases on or after January 1, 2009 and before December 1, 2009
• Recapture – If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.

Check out this link for the differences between last  year’s plan and this years.

Oh, to be a first time buyer!

Tags: first time buyer, first time buyer credit, michigan first time buyer, tax credit for first time buyers

Michigan Home Buyers and Sellers to Benefit from Stimulus Bill

Congress finally came to terms on this stimulus bill that we’ve been hearing so much about. This thing is very far reaching and is going to cost a boat load of money, but I am just focusing on the items that will affect real estate sales and mortgage finance.

Mortgage Rate Reduction – There has been a lot of buzz about the government somehow forcing mortgage rates down to 4%. There has never been a clear answer as to how they would do this (mortgage rates are set by a free market pretty much like everything else in the USA!). This bill does not call for any specific measure that would peg mortgage rates at some direct level. It does, however, allow the Fed’s to continue to purchase mortgage backed securities (MBS) in the secondary mortgage market. Keeping this market de-thawed should allow mortgage rates to remain low as they have been for the past 8 weeks. The bottom line is that fixed rate mortgages in the 5’s are pretty great anyway!

Higher Loan Limits – One of the things this bill does is to re-set loan limits to 2008 levels. This is more important than it appears. For example, in our area of Southeastern Michigan, the FHA loan limit had been reduced from $297,500 to $271,050. This might not seem like a big deal but if you’re a homebuyer and want to purchase something that’s $300,000 then it is a big deal! Overall, conventional loan limits will remain unchanged around most of the nation because Fannie and Freddie did not reduce the limits this year so the conventional loan limit for most areas will remain at $417,000.

Changes to the Homebuyer Tax Credit – The homebuyer tax credit has been re-vamped in a couple of ways. The maximum credit amount has been increased to the lesser of 10% of the purchase price or $8,000 (up from $7,500).Now the tax credit does not have to be repaid (this is great!) unless the buyer sells the home in the first 3 years and then they have to repay the entire amount. Also, the time period has been extended and now the tax credit is available until December 1, 2009. All other income limits and first time buyer requirements still apply. The new tax credit begins on January 1. Anyone who bought a home in 2008 under the previous law is still subject to the rules of the old bill but anyone buying in 2009 is subject to these new rules even if they bought prior to the bill being passed as long as the purchase date was in 2009.
This “Stimulus Bill” is enormous – just another way for the government to grow even larger? How are we going to pay for these $800 billion dollar expenditures? What long term effect will printing all of this new money have on our future economy? Who knows! All I know is we have to head off a potential economic disaster and this seems like the best way to do that right now.

Tags: first time home buyer credit, home buyer tax credit, stimulus bill

Oh, to be a First Time Buyer in Metro Detroit…

Over the last few weeks I have had the pleasure of meeting with quite a few people who will be soon buying their first homes in Metro Detroit. They are excited about the opportunities they are seeing in places like Royal Oak, Birmingham, Beverly Hills, Huntington Woods and Troy. They should be excited. Today’s housing market has created unprecedented opportunities for them. I wish I was a first time buyer.

Housing prices are lower than they have been in more than a decade.

Interest rates are at a 50 year low.

The first time buyer’s credit provides an additional $7,500 tax credit at $0 interest is being replaced with an up to $8,000 income tax credit that does not have to be repaid. Only first time buyers are eligible. Think free money from Uncle Sam. Or think of it as $8,000 off of the purchase price. That certainly sweetens any deal… Next year, plenty of Metro Detroit first time home buyers will be getting back a hefty check from the US goverment, just because they bought a house. Not bad at all.

With lower purchase prices come lower property taxes, usually lower than the previous owner was paying. Listing tickets today will not yet reflect the change in taxes, because assessments just came out and the new tax bills are not sent out for a few months. Taxes are still a tricky issue, so do your research.

Yesterday I was out with some first time buyers who wanted to see 4 houses in Troy. We ended up seeing two because the other two were already under contract. As always, the competition for the most desirable homes will be stiff. I suspect that this spring, the first time buyer market will be especially competitive as people look to take advantage of the tax credit and market conditions.

Be prepared. An opportunity like today’s hasn’t been seen in decades.

Photo Credit K-Girl

Tags: $8, 000 homebuyer tax credit, First time home buyer, first time home buyer tax credit, michigan first time home buyer

Yes, Virginia, there are HUD homes in Birmingham, Michigan

Birmingham is certainly known for its upscale downtown, incredible restaurants and it’s wonderful neighborhoods.  We have pricey real estate here too, compared to much of the rest of the region.

On Inauguration Day, I showed Birmingham’s only HUD home active in the MLS.  To date, there are have been few HUD homes in Birmingham, but we could have more in the future.

My client asked me, “Aren’t HUD homes in bad areas?”  This seems to be a common perception, but HUD homes are the product of people who had FHA guaranteed mortgages losing them to foreclosure.  2009 FHA loan limits for Oakland County are up to $273,700, and we certainly have many homes in that price range in Birmingham.

FHA loans have allowed people to get into homes with lower down payments, and have been of particular assistance to first time home buyers.  In the last 9 years we didn’t see that many FHA loans financing Birmingham/Bloomfield Hills homes.  It was much more common to do a piggyback loan, with a first mortgage and a second mortgage to avoid PMI.  Piggyback loans gone now that underwriting guidelines have tightened up.

HUD homes are sold via incredibly transparent on-line auctions, which frees them from some of the issues that have surrounded the sales of other foreclosed homes. The bids are made through HUD approved brokers (like us), and the auction results are posted daily. Owner occupants are given preference and may bid earlier in the process, without competition from investors.

Investors also need to conduct any inspections prior to making an offer. Owner occupants are given much more leeway in this regard.

These homes provide an incredible opportunity for buyers, though one should proceed with caution.

Tags: birmingham mi foreclosure, foreclosure, HUD, HUD homes

The Big Open House: Save the Date for May 3RD

Did you know that the larges single open house event in the US takes place right here in Metro Detroit?

Last year our board of Realtors sponsored The Big Open house, a huge tri county effort to have as many homes as possible opened on one day.   Agents reported great turnout, and a number of buyers found what they were looking for that day.

You will want to save the date for this year’s Big Open House on MAY 3RD.  School districts are participating as well.

There is no denying that housing inventory is at historically high levels; however, that also means that there are incredible opportunities to purchase real estate. Even with the tightening in the mortgage market, interest rates remain near historically low levels for qualified buyers.

As the big day approaches, here are your sources of information about the houses opened that day

• Through an insert in the April 30 editions of Detroit Free Press and The Detroit News that will list all open homes by area;
• Via a Web site, TheBigOpenHouse.com, where all participating homes will be listed; you will be able to search the open houses and, using an interactive map, plot your route to visit the homes;
• And, finally, with a map included in the Sunday paper the day of the event.

Municipalities and school districts in the region are also being contacted about conducting “open houses” for their communities and schools.

WOOPS. I had the date wrong. Thanks to a reader in California (who is moving here this spring) for letting me know! It is May 3rd.

Tags: big open house, open house

It’s baaaaaaaaaack: Seller Financing!

Tightened credit markets and a sluggish real estate market have sellers looking for ways to seal the deal. This week I saw a Birmingham builder do what he could to take control of the situation and set his properties apart. His answer: the land contract.

Not only is he offering land contracts, he’s offering them at rates better than you will get at the bank. Today he advertised 4%! What’s not to like about 4% money, especially since his homes sell at prices where the buyer is likely to need a more expensive jumbo mortgage. Other advantages of land contracts:

Potentially cheaper closing costs

Seller *might* be more lenient with credit blemishes

I haven’t called for details, nor have I done the math, but I think this sounds like a great incentive for buyers.

Intrigued? Take a look.

Tags: birmingham mi, creative home sales techniques, land contract, metro detroit land contract, michigan land contract, seller financing

Value Alert: In Town Birmingham MI

I want to stand on the rooftop and shout Screaming Deal! Screaming Deal! But I know that won’t go over too well with the neighbors, so I am keeping my large mouth closed.

I can’t believe the price on this house. We just reduced it by $50,000 today and it is priced below market for a quick sale. You will LOVE the quality and the amenities offered. This truly is a rare opportunity to own at this price in downtown Birmingham. It is priced better than the foreclosures and it is in perfect condition. Call me before it is gone.

For larger pictures and more details, visit 731 S. Bates on our web site.

Tags: Birmingham, Birmingham Mi Real Estate, birmingham michigan bargain, birmingham michigan house deal, birmingham michigan value