The Federal Housing Administration (FHA) announced new guidelines to strengthen its assets and reduce risk.  These are some of the major changes that will affect borrowers:  

 1) There will be new loan-to-value and credit score requirements.  A  FICO score of less than 580 will require a minimum of 10% downpayment.  

 2)  A 3.5% downpayment continues to be acceptable for those with a FICO score of 580 or above.   The upfront insurance premium will be increased to 2.25% (currently 1.75%). 

 3)  Allowable Seller Concessions will be reduced from 6% to 3%.   

4)  Stronger enforcement of FHA standards & guidelines for lenders.  Lenders will be ranked by performance.

 The timing for these new guidelines to kick-in is the spring and early summer.  Long Island  homebuyers will be required to pay more money to obtain an FHA mortgage.  The best time to buy is Before these new guidelines go into effect.   To read the full statement click on FHA Report.

DON’T FORGET! You MUST be in contract by April 30 and Close by June 30 to take advantage of the  The First Time HomeBuyer and Repeat Buyer Tax Credit.  See Video with details on my Blog Post.

Contact Cheryl Grossman at cheryl@liagent.com for more information or to discuss your housing needs.

Video from the IRS provides information about the new First-Time Homebuyer Tax Credit and how it can benefit you.  The law went into effect Nov. 6 and it extends the first-time homebuyer credit to April 30, 2010 (must be in contract by that date and contract closed by June 30, 2010). Eligibility requirements for purchasers are expanded.

There’s more information about the requirements and how some current long-term homeowners also can use a Tax Credit of $6,500 for the purchase of another home in an article from the IRS website. 

Start your search for a new home at www.LIagent.com.  Click on the map to search for all homes for sale on the LI MLS. Or use the quick search form on the upper right sidebar.  Contact us at CGTeam@CherylGrossman.com.

 President Obama signed into law today an extension and expansion of the homebuyer tax credit.  The $8,000 First-Time Homebuyer Tax Credit is extended until April 30, 2010.  Buyers must be in contract by that date – but have until June 30 to close.  Current homeowners who have lived in their home for 5 years can receive a $6,500 tax credit when they purchase another home.  Income levels have been raised to $125,000 for single buyers and $225,000 for couples.  The purchase price of the home cannot exceed $800,000.  There are requirements and limitations.  The National Association of Realtors (NAR) published a chart which list the stipulations -  NAR Tax Credit Brief.

These new guidelines will help many buyers on Long Island.  All combined - the tax credits, reduced home prices, and historically low interest rates make the total cost of buying a home now the lowest it’s been in years - creating an incredible opportunity for you and your family.

Start your search now at www.LIagent.com or use the Quick MLS Search on the upper right sidebar.  Call us at 631-493-0542 or CGTeam@CherylGrossman.com.

CLUE – an acronym for Comprehensive Loss Underwriting Exchange – is a national database recording property claims for insurance companies.   All of your property claims to your insurance company are listed and kept for 5 years.  The report shows the date, amount of loss and the type of loss – including claims for mold, water damage & fire damage.   It’s been compared to a credit report on your home.   If an insurer decides that the report indicates a home is too risky he can refuse to insure that home – and without homeowner’s insurance, your buyer cannot obtain a mortgage.

There are some steps you can take to avoid a contract falling through just before a closing.

• Sellers should order a CLUE Report before listing the property. That way you are prepared to deal with the issue and have an opportunity to correct any mistakes on the report.  You can order a report through Choice Trust.
• Even if your home shows up on a CLUE Report, your buyer probably can purchase a homeowner’s insurance policy – but may have to have to do so through an independent insurance agent who has access to numerous policies and the cost may be higher.   As a seller it is better  to request a report ahead of time, consider what options are available to mitigate it – and not take a chance only to lose the sale of your home by “hoping” for the best outcome.

There is an informative article on MSN Money about CLUE Reports and homeowners insurance.  Any questions?  Please contact me at cheryl@liagent.com.

There are a couple of First-Time Homebuyer Assistance Programs available for local  residents.

For Huntington residents wishing to purchase a home in the Town of Huntington, the Town has a great program for First-Time Homebuyers called the “Huntington American Dream Homebuyers Assistance Program” which matches funds for a down-payment.  There are eligibility and income requirements and the purchase price of the home cannot exceed $396,150.  For more information and to request an application contact the TOH Community Development Agency at 631-351-2881.  Huntington American Dream Homebuyer Assistance Program.

Although it’s over for this year, there is a Suffolk County Down Payment Assistance Program for First-Time Homebuyers which will start up again next May.  I’ll post information about that program next Spring.

The State of New York has several programs for First-Time Homebuyers which include such benefits as below-market interest rates, financing up to 97%, new construction incentives, financing for remodeling an existing home, programs for military veterans and more.  All are designed to make the home purchase more affordable for low and moderate income families.  The easiest way to see if you qualify for one of these SONYMA programs is to go to their website.

To find out more information about these homes, click on a photo.

Any Questions?  Want to arrange an appointment to view any home, please contact me at Team@CherylGrossman.com or call 631-223-8549.  More homes at www.LIagent.com

First-Time Homebuyers can benefit from two new programs in the Town of Huntington unveiled today.    These two programs are funded by the Town’s Affordable Housing Trust Fund – using money that developers paid into the trust fund in return for obtaining increased density for their projects.  (Most of the funding came from the developers of The Greens.)   “Helping people, especially people just entering the workforce, find housing they can afford will help ensure the Town’s future by addressing one of the major factors cited as contributing to Long Island’s brain drain. I can think of no more important role government can play,” Supervisor Petrone said.

The two programs for First-Time Homebuyers to be implemented are:

The “American Dream” program, which will help first-time buyers realize the American dream of home ownership by providing 50 percent of their down payment, up to a maximum of $15,000. The town has earmarked $600,000 from the housing trust fund for this program, which is open to people making no more than 120 percent of the median income in the town. On a sliding scale, that works out to $85,600 for an individual or $122,200 for a family of four. The maximum purchase price of the house is $396,150.

The “Take Back the Blocks” program, which will make available to first-time buyers houses the town has purchased from absentee landlords and rehabilitated to include a primary residence and a legal accessory apartment. The projected income from the apartment will help buyers qualify for a mortgage and meet carrying costs. The Town has allocated $429,000 in housing trust fund money to help purchase properties on Columbia and Tower Streets, which will be converted to a total of 16 living units. Other funding for this program is coming from Suffolk County and from the State’s Restore NY Communities program. This program is open to people making 80 percent of the median income, or $57,000 for an individual and $81,450 for a family of four on the sliding scale.

The Department of Housing and Urban Development announced on Tuesday that the Federal Housing Administration is going to permit its lenders to allow 1st-Time Homebuyers that meet the requirements to use the $8000 tax credit as a downpayment.

Speaking at the mid-year National Association of Realtors Meeting in Washington, D.C., Shaun Donovan, the HUD Secretary said “We all want to enable FHA consumers to access the First-Time Home Buyer Tax Credit funds when they close on their home loans so that the cash can be used as a down payment,”  He said that FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans – which allows eligible 1st-Time Homebuyers to access the funds at the closing table.

In comments about the housing market, Donovan said,  “I do think we have some early signs hat the market overall is stabilizing. …Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”

If you’re a First-Time Home Buyer, Start your Home Search here at www.LIagent.com!  Cheryl Grossman and her Team, Patricia Giambalvo and Paulette Rosenberg are ready to help!  Contact us at Team@CherylGrossman.com or 631-549-1993. 

Some Good News for Buyers and Sellers on Long Island!  Freddie Mac and Fannie Mae once again have increased the higher loan limits allowed for conforming loans.  The mortgage rates on bigger mortgages finally should come down.  Home loans up to $729,750 for single-family homes (Nassau and Suffolk qualify for the maximum limit) should be cheaper in the next few weeks.  This higher conforming loan limit is part of the economic stimulus act and is available only until the end of this year and then reverts back to the $417,000 true-conforming loan limit.    Freddie Mac and Fannie Mae can purchase or guarantee only conforming-loans-anything over the limit is a Jumbo Loan-and the interest rates are much higher.  The interest rates for these super-conforming loans may be slightly higher than the true-conforming $417,000 limit  (typically one-fourth to one-third percentage point higher) – but they still are cheaper than Jumbo loans-which average around 1 to 1 ½ points higher than conventional mortgages.

Even though the act passed in February, the criteria for these new limits were released only recently and both Freddie Mac and Fannie Mae will begin buying super-conforming loans on May 4.  Check with your mortgage officer to see when their company will start writing these loans.  (See How Much Can I Afford? for names of some mortgage lenders.)  This higher loan limit and resulting lower interest rates for mortgages up to $729,750 certainly will have a positive impact on the Dix Hills & Melville Housing Market.  Good news indeed!

For more information email me at cheryl@liagent.com.  Please visit my web site, www.LIagent.com.  New Home Searches with a great IDX company, Diverse Solutions – coming this week.

Where is the housing market headed?  Have we reached the bottom yet?  Is the housing bust over?  Three reports will be released this week that may indicate which direction the housing market is headed.   A newspaper article says that data from these reports will be focused on two parts of the housing market:  Home Sales and Home Prices.  And they don’t necessarily move in tandem.  One may recover before the other one does.

February showed an increase in numbers of home sales – for both new construction and resales – and that trend is likely to continue.  Foreclosures, record-low mortgage rates and the $8000 Tax Credit for 1^st-time homebuyers have all contributed to an increase in the numbers of homes sold. The busier spring housing market will help that momentum also.  Less likely to show an uptick are home prices.  A report due out tomorrow will address that.  Foreclosures may help home sales activity but they have a negative effect on home prices.  If home prices have “bottomed-out” and a recovery is taking place – we may not know that for awhile.  It takes time to go from looking for a home, signing a contract and then closing on that home.  The article, Housing Data Could Signal If Bust Is Over  was published April 20 in The Washington Post.

NAHB has more detailed information about the Tax Credit.  Information about New York State programs for 1^st-Time Home Buyers including SONYMA mortgage programs and Home Ownership Assistance for NY State and Long Island.  How Much Can You Afford?   Before you start your home search you need to find out how much you can afford and then obtain a Mortgage Pre-Approval Letter.   A  Mortgage Calculator will show you how much you’ll pay each month.

Choosing a Home – Confused by the process of buying a home?  Not sure what you can afford?  When selecting a home that will hold its value – What should you look for?

Cheryl’s Buyers Guide explains the buying process and includes worksheets and Scorecards  for rating homes that you view.  First Place Buyers Guide at HGTV’s FrontDoor web site has a range of information for buyers.  HUD discusses a step-by-step process to purchasing a homeMortgage rates are the lowest they’ve been since the 1950s.

For help with your home search, Contact the Cheryl Grossman Team for a personal consultation at CGTeam@CherylGrossman.com.  More information for Buyers is on my web site:   www.LIagent.com.