The Harvard Joint Center for Housing Studies issued a comment in its latest report that renters will likely find a very challenging rental market in the upcoming months. Significant slow downs in multi-family housing growth means there will be fewer options available to those looking to rent properties, and subsequently rental rates will likely increase. Clearly this is optimistic news for landlords and investors who are now picking up many of the foreclosure properties around the country that come on the market well priced. Eventually these foreclosures getting into the rental pool will alleviate some of the expected shortage in rental units, but a large easing of upward price pressure is unlikely in the near term as the multi-family housing typically has a larger lead time for development. That means bringing on new multi-family housing will take awhile and in the immediate future it’s likely to be far from a renter’s market.
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HUD has developed a new FHA insured mortgage program, called the “Streamline 203k” Limited Repair Program that permits homebuyers to finance up to an additional $35,000 of repairs into their mortgage to purchase and improve or upgrade the home before move-in or to refinance an existing mortgage and add up to $35,000 in repairs or improvements. With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. Unlike the standard 203(k) program, any FHA approved lender may originate a Streamlined 203k mortgage.
The following repairs can be financed with this program: * Repair/Replacement of roofs, gutters and downspouts
This program can also be used with the purchase of a HUD home. Team Woodall Tip: The Streamline 203k Program can be a fantastic asset for purchasers or homeowners looking to renovate a property in need of repairs, however the process for obtaining the financing isn’t necessarily a quick undertaking. Contact a lender for additional details on the program, but be advised that the borrower will have substantial work and documentation to provide in order to obtain money under this program. Q: What are the basic eligibility requirements for FHA financing? A: FHA insures mortgages made by approved lenders to individuals and non-profit and government agencies that are approved to participate in HUD’s programs; HUD does not loan money to homebuyers. Generally, to be eligible for an FHA loan, you must have a valid social security number and have lawful residency in the United States and be of a legal age to sign on a mortgage in your state. Lenders will verify income, assets, liabilities, and credit history for all parties on the loan. FHA’s mortgage programs do not typically have maximum income limits for qualifying, although you must have sufficient income to qualify for the mortgage payment and other debts. Income limits may be present when qualifying for down payment assistance or other secondary financing programs (including those funded by HUD) that may be used in conjunction with an FHA loan. Using FHA guidelines, lenders will make a credit determination based on the merits of each case. To find out if you qualify, and how much you can borrow based on your income and debts, you should contact a FHA approved lender. Q: What is the minimum downpayment requirement for FHA? A: Generally, the borrower must make a cash investment of at least 3.5 percent of the contract sales price as required by the Housing and Economic Recovery Act of 2008. Detailed instructions for determining the minimum investment for an FHA insured mortgage are available in Handbook 4155.1. This downpayment amount may be gifted or employer sponsored. For additional information on FHA mortgages go to: http://portal.hud.gov/portal/page/portal/HUD/topics/buying_a_home On a national level home sales this year are on pace to outperform 2010, even though last year was bolstered by the artificial homebuyer tax credit. Driving much of this increase is an improvement in the general economy and slow but steady job growth. While a considerable number of people are still unemployed and not all businesses are thriving, there have been steady improvements in these areas which have helped the housing market pick up sales. Monthly job growth has been a bit over 100,000 positions recently, but the huge number of jobs lost previously will take awhile to come back and recent college graduates also filter into the pipeline of job seekers. Affordability is probably the single biggest driving influence right now in home sales rebounding. NAR’s affordability index is at a record high of 170. This means that households earning the national median income have 170% of the income needed to buy a home at the national median price point. Clearly local market conditions may be different across the country with some cities having more affordability than this and others less. Once lenders return to pre-boom “normal” standards sales may also see an additional increase. Mortgage money remains tight with good to great credit being required by most lending institutions and the resulting performance of those loans has been phenomenal. With summer vacation just around the corner, families with young children may be looking for ideas to keep the kids busy. One option that avoids the heat and is in a safe environment is Pump It Up; an indoor inflatable playground company. Going well beyond the simple “jumping castles” found at children’t birthday parties, Pump It Up takes inflatable recreation to the extreme. Large slides, obstacle areas, climbing apparatus, and traditional jumping castles are all part of the facilities two play rooms. The company also caters to birthday parties with eating area, catering, and other fun youth activities available. Open play times for different age groups and family play times are available as well. The facility is located just off I-10 on the frontage road to the north of Miracle Mile. For more information, hours, and rates visit their website: Pump It Up. Team Woodall Tip: Online registration/payment is available and can be very beneficial during holiday open play times. Firebirds Wood Fired Grill offers its diners an upscale, rustic atmosphere inspired by Colorado lodges and features a variety of appetizing entrees cooked over open flamed grills. Immediately you’ll feel the warmth of the restaurant’s exposed wood structure, fireplaces, stacked stone decor, and bold colors which provide a comfortable, relaxing environment. The Tucson restaurant located at La Encatada Shopping Center is one of 17 Firebirds Restaurants stretching across the United States and opened its doors back in 2003. Since that time it has built a reputation locally as offering delectable food for moderate prices. Featuring an array of American cuisine, Firebirds is most noted for its steak offerings, but appeals to a broad range of food tastes. Everything from gourmet hamburgers and sandwiches to seafood and pasta can be found on the menu. Perhaps one of the finest choices is the Sesame Encrusted Salamon with ginger mustard aioli that can be found on their specialties list. This selection is a healthy serving of tenderly cooked salmon, accompanied by parmesan mashed potatoes and fried spinach. If you’re clamoring for an even hearty meal than the Prime Rib might better suit your tastes, although availability on this item is often limited. A full bar offers the perfect drink accompaniment to your meal or a good spot to relax at happy hour with friends. Overall the environment is welcoming to patrons and the managers and staff go out of their way to make your meal an enjoyable one. So next time you’re looking to enjoy good food, with generous portions, for a reasonable price think about making a trip out to Firebirds Wood Fired Grill. Call ahead seating is available and often Firebirds Wood Fired Grill La Encantada Shopping Center 2985 E. Skyline Rd. (520) 577-0747 Both nationally and locally in Tucson the number of existing sales rose last month. Nationally that is the sixth increase in the last eight months, demonstrating a trend of activity as people re-enter the real estate market due to favorable affordability conditions and a healthy supply of inventory to choose from. This 3.7% national increase in unit sales volume is encouraging and while still short of last year’s sales numbers it also bodes well that this year is improving without the aid of the federal tax credit which was bolstering sales at this point last year. In Tucson total unit sales saw a 32.99% increase from February to place the March units at 1,169 which is identical with March of 2010, according to the Tucson Association of REALTORS. After a slight increase in the average price during February, March saw prices decline again with the average sales price coming in at $163,590. This increase in unit sales did shrink the available inventory by 3.51% from the month prior, even with a higher rate of new listings coming to the market than the month before. Local forecasts expect a bottoming of the Tucson market either later this year or into 2012, but with mortgage rates still attractive buying conditions are primed. Even some additional percentage decrease in prices will likely be less impactful to payments than a rise in interest rates. Home ownership has historically held many tax benefits and one of the biggest perks has been the ability to exclude profits realized from the sale of a home from the 15% capital gains tax. To qualify for this exemption the homeowner must have owned the property for at least two years and have lived in the property for two of the last five years. Once these tests are met then up to $250,000 of profit for a single person and $500,000 for a married couple could be exempt from taxation. Unfortunately many homeowners today are underwater on their homes and the sale of a home may not result in any profit. However, a sizable portion of people can still benefit from this tax exclusion afforded homeowners. With the drop in real estate prices more and more homeowners have decided to become landlords and rent out their properties. Often this occurs when seeking a larger home or having to relocate for a new job and the existing house can’t be sold or the owner doesn’t want to sell for current market prices. These so-called “accidental landlords” should keep the government’s capital gains exclusion guidelines in mind when going this route. Any owners with equity who are vacating the property to rent it out should consider the option of selling, even if at a reduced profit, to avoid paying capital gains. At least knowing the current tax laws can help each person make the decision that best fits their needs. One other point to keep in mind regarding this capital gains exclusion afforded by the government is that if a property was rented your excluded capital gains amount will be reduced by the depreciation taken, or that could have been taken, on the property while rented. As always it’s best to consult with your accountant or other tax professional to determine the best course of action. A bill introduced in the House of Representatives this week could substantially improve the process of short sales by putting time limits on bank responses. Titled “Prompt Decision for Qualification for Short Sale Act of 2011”, this legislation would impose a deadline of 45 days on lenders to respond to requests for short sales. To date one of the most difficult tasks has been to get any response from a bank when negotiating a short sale transaction. Often the banks are unsure of whether to accept a short sale offer and the long delays lead to potential buyers walking away before a response it even made. Short sales are typically much more cost effective for a bank to undergo than a foreclosure and the impact on the seller’s credit is much less severe as well. Buyers themselves reap benefits too as the sales are often at a discounted price when compared with a non-distressed property. Having a quicker response time at least allows buyers to be more informed and have a quicker read on whether to move ahead with the purchase or pursue a different avenue. Some sections of legislation passed last year are undergoing repeal as President Obama is scheduled to sign the bill H.R. 4 soon. Specifically now being changed is a requirement that all rental property owners, even individuals renting a second home, would have to file a form 1099 for any vendor/contractor that’s paid more than $600 in a year. Similar legislation repealed also would have applied for all businesses to provide these 1099s for any expense over $600, even to large corporations. While the intent of the bill was commendable to ensure more compliance with income declaration, it became clear that the reporting requirements were overly severe and constricting to small business owners and individuals. Existing laws still require this reporting of rental property expenses to a single vendor over $600 but is limited to those operating a business in this area of specialty. UPDATE: The bill has been signed into law by President Obama. |
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