FHA & Nehemiah
As home prices drop and interest rates remain fairly stable what loan program is available to those who have little to no money for downpayment and closing costs now that the 110% stated income loans are a thing of the past?
Well, FHA is one really good option. And, for those who have 0 dollars to work with and good credit FHA can be used in conjunction with the Nehemiah Program.
Here are a few quick bullet points on FHA and Nehemiah guidelines…
FHA
- Up to 97% financing
- Allows all gift down payment
- Government insured loan
- No minimum FICO, although interest rate can be affected by scores lower than 600
- Allows for alternative credit refrences when no FICO is present
- Debt to income ratio guidelines are set at 29/41 (housing/total debt ratio) and have been known to approve higher when there are compensating factors such as good credit, cash reserves, etc…
- Spouses must be reviewed and debt included in the debt to income ratios, UNLESS they are legally divorced.
- Allows for Non-occupying Co-borrowers
- No reserve requirements
- Underwriting standards more lenient than conventional loans
- Mortgage insurance required
- Must be owner occupied (unless investor is purchasing a HUD repo)
- Allows up to 6% seller contribution towards closing costs. That means seller can actually donate 6% to Nehemiah for down payment and another 6% can be used as a seller contribution towards closing costs to buy down interest rate and so on…If you can negotiate that much of a seller contribution.
Nehemiah
- Seller funded down payment assistance program
- Nonprofit group that receives sellers funds and transfers them to the borrower in the form of a gift (allows for a perfect, match to FHA, which allows an all gift down payment)
- Charges $299 for the transaction
- No qualifying guidelines, if you qualify for the primary loan, Nehemiah approval is automatic
- Allows gift of up to 6% of total purchase price for down payment and/or closing costs
- do not have to be a first time homebuyer
- Resale and New Construction allowed
- No repayment of gift money and no additional liens against the property
- No income or asset limitations
So jump down off that fence you are currently sitting on and grab a bit of the American Dream. This just may be the very best time to do it.
Kelly…
Good Credit vs. Bad Loans.
I just read an article on CNNMoney.com entitled “Good Credit Can’t Protect Borrowers From Bad Loans“. It explained in a very clear manner how a lot of lending decisions were made soley on the borrower’s credit score (FICO) and not much weight was given to whether they could actually pay back the loan. Things like ‘cash reserves‘ or ‘job security’, among other things.
This article really tells it like it is, and I agree with most of what they have to say. The only caveat I would add is that the borrowers need to accept some responsibility. Even if it’s just a tiny bit. Don’t they? They are the ones who signed on the dotted line to pay back the loan. They can read. It wasn’t a ‘conditional’ promise to pay. It wasn’t something like: “I’ll continue making loan payments as long as I want to, or I’ll keep paying as long as my property keeps going up in value”. Long story, short. Everyone is at fault, and that’s my take on it.
It’s an easy read. So do yourself a favor… and read it.
Wallace…
Who wants to be a millionaire?
I think the answer to that is plenty easy. Who wouldn’t want to be a millionaire? But the more difficult question is “how do you get there”?
You could inherit it. That’s how a lot of the mega rich get it. Then the question is “do you think they’ll be able to keep it”? I’ll save that for another blog.
You could marry it. That’s what my father told me to do. I should have listened.
You could make it yourself. The hard part is how. Well, you could invent something or develop some sort of business and work for it. The percentage of us who become “stars” is pretty low, so we’d better look for another option.
Or… you could invest in real estate and let it build up over time. No great secret here, you just need to do it. Take your first step. And now is the time to begin. Prices are at an all time low. Interest rates have remained stable. And there is an abundance of inventory. Time to take advantage of the banks that were trying to take advantage of you.
Managing your real estate is relatively easy but if that’s not your thing, you can hire a property manager. You still have to keep an eye on it but it’s not like having to work a second job to bring in that second income.
This is NOT a get rich scheme. It’s wealth building at its most basic. It takes a little time, but you’ll need the income when you get there anyway, so why now start now.
There are also investment groups if you don’t want any part of managing the property but those take a little more care and research.
Contact your REALTOR and start down the millionaire path. Remember that real estate is a long term investment.
Happy Real Estate hunting.
Wallace…
California Zinfandel
From once having worked in a region in California known for bold, intense Zinfandel, Paso Robles, and becoming very familiar with the grape and the wines it makes, I was astounded that for the most part, other regions around the world have little do with the production or consumption of Zinfandel. A couple exceptions include Italy, where a Zinfandel clone called Primitivo is commonly grown and consumed, and Croatia, where this grape is known as Crljenak.
After having spent some time studying wine in Australia, I didn’t realize how much I missed this traditional California varietal until just recently, when I tasted a flight of Zinfandel wines. In California, Zinfandel can be a very strong, full bodied wine with ripe fruit and a variety of spicy flavors. Perhaps the most popular style of Zinfandel in the U.S. is a style known as “white zinfandel” which, as we all probably know, is a pink, slightly sweeter wine enjoyed by the masses. However, in other regions, such as Margaret River, Western Australia, I interestingly found that the cooler growing climate has a positive affect on the Zinfandel grape. These wines have medium body and typically retain more spice than fruit with pepper, clove, and anise and a hint of dark berry flavors.
Zinfandel is a very important grape variety to the U.S. and is often considered America’s heritage grape. Zinfandel vine cuttings were first brought to the U.S in the early 1800s and were planted in the northeastern regions of the country. Once vine cuttings were planted in California in the mid 1850s, it was found that Zinfandel can grow incredibly well in the various California climes.
Zinfandel became hugely popular during the California Gold Rush as it could be made into a pretty decent drop, and even though this grape has had some competition from other varietal wines over the past few decades, it is still a significant part of the California wine growing and making history. It has actually become so important in fact that entire wine festivals are dedicated to this grape. Such festivals include the annual Zinfandel Festival in Paso Robles organized by the Paso Robles Wine Country Alliance (www.pasowine.com), the Lodi Zinfandel Festival (www.zinfest.com), and the annual ZAP (Zinfandel Advocates and Producers) tasting in San Francisco (www.zinfandel.org).
For more information about the history and significance of this wine grape, please go to www.zinfandel.org.
Just recently I tried numerous Zinfandel wines and I personally rated the following wines the highest for their concentrated fruit and delicate oak aromas and flavors. Additionally, I was impressed that the heat from the higher alcohol content in these wines did not interfere with the wines’ aromas and flavors.
I hope you enjoy the following wines as much as I did!
2006 Seghesio Sonoma County Zinfandel, $20
This rich purple colored wine is full of life with intense aromas of black berries, raspberries, black cherries, spice and interestingly, a hint of coconut. Beautifully balanced and intense flavors of red fruits, cherry, raspberry, spice and vanilla come through on the palate. This medium bodied wine has an incredibly fruity finish; the tannins, acidity, and fruit in this wine, hint that it will age well for the next five to ten years.
Alc. 15.4%, www.seghesio.com
2006 Seven Deadly Zins, Lodi, $17.00
A typical Lodi Zinfandel, this medium bodied wine has a remarkable combination of ripe cherries, raspberries, and subtle vanilla aromas with smoky plum and cherry flavors and a lingering fruit finish. This wine is definitely ready to drink now but should stay fresh for the next 3-5 years.
Alc. 14.5%, www.lodivineyards.com
2005 Sin Zin, Alexander Valley, $20.00
This inky red-purple Zin exhibits aromas of black berry, black raspberry, clove and peppery notes with fairly intense dark cherry, vanilla, spice and black fruit flavors in the mouth. This medium bodied wine is very well balanced and finishes surprisingly strong. Drink now or for the next 3-5 years.
Alc. 14.5%, www.avvwine.com
*Please drink responsibly
The Real Estate Diet: How to lose that unwanted weight.
And by weight, I mean the real estate that’s weighing you down. Well, the answer is simple… ”just stop making the payments”. That’ll do it !!! We all know, that short of some catastrophie, it would be the wrong thing to do, but it is a means to an end.
Next you need to try the more traditional methods:
1) You can give it away ( I wish I could get rid of my unwanted poundage that easily).
2) Or you can sell it ( I’d be happy if I could sell the unwanted poundage too).
So if you don’t want to ”LOSE” your property and you don’t or can’t “GIVE” it away, then I guess you need to sell it. You can try and do this by yourself which has become extremely difficult in most sates because of increased regulations. And you’re NOT exempt just because you DIDN’T KNOW. If you take on the job, you take on the risk and the liability. You can buy books, which will primarily cover things on a statewide level, but not on your local level. And by that I mean local disclosures or laws. In our area we have “air quality” disclosures and “right to farm” disclosures, just to name a few.
If you find yourself in the need or desire of losing that unwanted real estate, do yourself a favor and hire someone to work with you to achieve your goals. It’s like hiring a trainer. You think you can do it on your own, but you know better. They keep you from going places you shouldn’t go and they keep you focused on your goal, the end result.
Remember; No Pain, No gain.
Again…Happy Selling
PS I guess I need to take my own advice and hire a trainer.
Wallace…
