The Regan Team - Petaluma Homes & Mortgage Blog - PetalumaLending.com

Home Affordable Refinance Program aka HARP 2 Guidelines

Thu, 17 Nov 2011 23:16:04 -0500

In November of 2011 the Obama administration announced a revamped Home Affordable Refinance Program or HARP for short. The initial HARP program was released in 2009 but limited an upside-down homeowner to a maximum loan to value of 125%. With so many homes more than 25% underwater, the program needed to be updated.

So here are the new rules (only applies to Fannie Mae and Freddie Mac loans):

- December 1^st, 2011 is first day applications may be taken. If you’re more than 125% loan to value you must wait until March 18th 2012 when Fannie Mae’s underwriting system is updated.

-No maximum loan to value; even if you’re 100% or more upside-down you may be able to refinance.

-Your current loan and new loan must be over 80% of your current home value. (If you owe equal to or less than 80% of your home value you can refinance under the standard refinance rules)

-Fannie Mae and Freddie Mac are reducing and/or eliminating some risk based fees making the rates better. Under the original HARP there were risk based adjustments that could add up to 3 points to the rate.

-Your current loan must have been sold to Fannie/Freddie on or before May 31^st 2009.

-The income and asset requirements are minimal and most options only require a recent pay stub and verification of employment. While there is no debt to income limit if your payments don't increase by more than 20%, you must receive an approve/eligible decision when running the loan through Fannie's Desktop Underwriter (DU).

-If you have a 2^nd mortgage you can’t combine the 2^nd into a new loan. Your existing 2^nd mortgage will have to agree to subordinate behind the new HARP 1^st mortgage.

-If you have existing mortgage insurance your current mortgage insurance company will have to agree to switch over the coverage to the new loan. This is completely voluntary on their part so there are no guarantees.

-Eligible properties include one- to four-unit primary residences, second homes, and one- to four-unit investment properties, including single-family homes, condos, co-ops and manufactured housing.

-Maximum loan to value is 105% on 40 year and adjustable rate loans.

What will make you ineligible for a HARP 2 refinance?

-Can’t have late payments in last 6 months and not more than one 30 day late in the last 12. Any 60 day+ late payment disqualifies you.

-If you’ve refinanced under the HARP 1 program you’re ineligible.

-If your current loan is not owned by Fannie Mae or Freddie Mac. (Click this link to find out if FREDDIE MAC owns your loan, click this one to find out if FANNIE MAE owns your loan)

This updated program may be able to help thousands of Sonoma County, Marin County, and Napa County home owners to stay in their homes as well as save them thousands in interest.

For more details on the HARP 2 program here are the press releases for FANNIE MAE and FREDDIE MAC.

If you're in California and want to refinance under this program call or e-mail us today!

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

HUD proposing to reduce FHA seller concessions

Thu, 26 Jan 2012 01:16:28 -0500

On Wednesday January 25^th HUD released an announcement detailing how it would monitor lenders default rates and the consequences for not meeting their guidelines. Later in the press release there was a small mention on a topic that could make FHA loans more expensive for the consumer.

They announced they’re going to issue a proposal to limit seller concessions. Currently FHA allows up to a 6% seller credit for closing costs, under the proposed rules mentioned in their July 15^th 2010 memo, it would be reduced to 3%.

How would this make a difference?

FHA loans require tax and insurance impounds and there are times when up to 9 months of property taxes need to be collected. In high costs areas this cost alone would eat up a large portion of a 3% seller credit and cause the buyer to come in with additional money.

With the reduction it could also prevent borrowers the ability to pay the 1% upfront mortgage insurance premium to be paid by the closing costs, forcing them to roll it into the loan amount and paying interest on it for the term of the loan.

Once HUD publishes the proposal there will be a 30 day public comment period before they make a final ruling; there’s no set date for this to take effect.

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

FHA Extends Flip Waiver for 2012

Mon, 26 Dec 2011 12:36:21 -0500

Any residential property that changes ownership more than one time in a 12 month span is considered a flip. Previously HUD did not allow FHA loans on properties that had been flipped less than 90 days from the most recent ownership change.

In January 2010 HUD created a special waiver that allowed FHA financing on flips less than 90 days; that waiver was set to expire December 31, 2011. HUD recently announced that the waiver has been extended through 2012.

As in last year’s waiver there are a few guidelines that must be met:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

• In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions. (Generally this means that the lender will need to do two appraisals to justify the increased price.)

A few other things to note:

-There are some lenders that still will not offer FHA financing on flips less than 90 days.

-The lenders that are allowing it can be more restrictive on debt to income ratios.

-Many require a home inspection and to have all items noted by the inspector fixed before closed of escrow.

This is great news for FHA buyers and the home market in general. Be sure to check with your lender if you’re considering making an offer on a flip less than 90 days to make sure they can offer this financing and what their requirements are.

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

FHA Extends Flip Waiver for 2011

Sun, 30 Jan 2011 20:16:54 -0500

In January 2010 HUD created a special waiver that allowed FHA financing on flips less than 90 days; that waiver was set to expire January 2011. This weekend HUD officially announced that the waiver has been extended through the remainder of the year.

As in last year’s waiver there are a few guidelines that must be met:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

A few other things to note:

-There are some lenders that still will not offer FHA financing on flips less than 90 days.

-The lenders that are allowing it can be more restrictive on debt to income ratios.

-Many require a home inspection and to have all items noted by the inspector fixed before closed of escrow.

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

New VA loan limits for 2012

Sun, 18 Dec 2011 22:10:09 -0500

There have been a few welcomed changes to VA loans in 2011 including a lowering of the upfront funding fee; you can read more about that HERE

In 2012 there is another change coming; lower loan limits.

You can find current VA loan limits by clicking here

The basics are:

Sonoma County: $419,750 down from $478,750

Marin County: $625,500 down from $1,000,000

Napa County: $460,000 down from $530,000

This change will not affect most VA buyers as the new loan limits are more than adequate for each county and if needed the 2012 FHA loan limits allow for higher purchase prices with only 3.5% down.

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

FHA Loan limits going back up!

Fri, 18 Nov 2011 16:26:58 -0500

On October 1^st 2011 Congress allowed the high balance loan limits on Freddie Mac, Fannie Mae, and FHA loans to be reduced to 115% of the medium home price of each county. In Sonoma County the limit went from $662,500 to $520,950; a $141,550 drop. In Marin it dropped $104,250 from $729,750 to $625,500.

On November 18^th 2011 Congress renewed the higher limits for FHA loans through 2013. At this time Fannie Mae and Freddie Mac are staying the same. So if you’re looking to purchase a home here are the new loan limits:

Sonoma County:

FHA: $662,500

Fannie Mae and Freddie Mac: $520,950

Marin County:

FHA: $729,750

Fannie Mae and Freddie Mac: $625,500

Napa County:

FHA: $729,750

Fannie Mae and Freddie Mac: $592,250

This increase will help many buyers secure more affordable financing and help the battered housing market recover.

Click here for current FHA loan limits

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

Adobe Pumpkin Farm in Petaluma

Mon, 03 Oct 2011 11:44:55 -0400

The Adobe Pumpkin Patch in Petaluma, CA has been a family tradition for years. It’s located at 2478 East Washington Street in Petaluma and it’s open from 10am-6pm daily; weather permitting.

There’s something for everyone from hay rides, farm animals, food vendors, farmers market, a haunted barn, and of course hundreds of pumpkins to choose from. My favorite is the Halloween store that always has great decorations for sale.

The farm is open from late September through Halloween. For more information call them at 707-763-6416 or visit online at www.adobepumpkinfarm.com

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

FHA 580-639 credit score program

Mon, 07 Mar 2011 23:11:27 -0500

*** Please note we are licensed in the State of California ONLY. Call your local mortgage provider in other states for assistance with this program. ***

In 2010 the minimum credit score for a FHA loan rose to 640 for most investors. That precluded thousands of potential home buyers from making home ownership a reality. Those who had gone through a temporary financial set back and whose credit scores were damaged couldn’t find home financing.

Now some make sense guidelines for FHA are back for a few select investors. There’s now a 580-639 credit score FHA loan; here are the guidelines:

- FHA 203k and flips are not allowed
- Purchase only
- Maximum 45% debt to income
- 3.5% down payment (more may be required)
- Standard mortgage insurance
- 1-2 units only (Rental income not used to qualify)
- Gift funds are allowed
- 2 months PITI reserves with a pattern of saving
- No overdrawn bank accounts and on time payments for the last 12 months minimum
- Homebuyer counseling required

This program is not meant to open financing to those who don’t have a track record of good financial management, but rather to help those who had a one time / temporary financial set back and are now back on their feet.

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

VA Loans are changing…for the better!

Sun, 25 Sep 2011 12:23:19 -0400

The last few years most loan programs have increased their fees. FHA has increased its monthly mortgage insurance from .5% to 1.15% and USDA as of October 1^st, 2011 is adding monthly mortgage insurance to its loan.

The goods news for Veterans is that due to the “Restoring GI Bill Fairness Act of 2011” their loan fees are going down!

Currently a Veteran using a VA loan for the first time will be charged a 2.15% funding fee, as of October 1^st, 2011 that’ll drop to 1.40%.

On a $400,000 loan that’s a savings of $3000.

There’s no monthly mortgage insurance on VA loans and you can finance 100% of the purchase price of a home.

In Sonoma county you can get up to a $419,750 loan, in Marin $625,500, and in Napa $460,000.

Here’s the breakdown of the new fees:

Down payment less than 5 percent:

Prior to October 1, 2011

Active Duty – 2.15%
Guard/Reserve – 2.40%

On or after October 1, 2011:

Active Duty – 1.40%
Guard/Reserve – 1.65%

At least 5 percent but less than 10 percent down payment:

Prior to October 1, 2011

Active Duty – 1.50%
Guard/Reserve – 1.75%

On or after October 1, 2011:

Active Duty – 0.75%
Guard/Reserve – 1.00%

10 percent or more down payment:

Prior to October 1, 2011

Active Duty – 1.25%
Guard/Reserve 1.50%

On or after October 1, 2011:

Active Duty – .50%
Guard/Reserve .75%

Second or subsequent use VA loan funding fees are the same for both active, Guard, and Reserve:

Less than 5 percent down payment:

-October 1, 2007 until October 1, 2011
3.30%

-October 1, 2011 until October 1, 2012
2.80%

-October 1, 2012 until October 1, 2013
2.15%

-On or after October 1, 2013:
1.25%

At least 5 percent but less than 10 percent down payment

-Prior to October 1, 2011

Active Duty – 1.50%
Guard/Reserve – 1.75%

On or after October 1, 2011:

Active Duty – 0.75%
Guard/Reserve – 1.00%

10 percent or more down payment

-Prior to October 1, 2011

Active Duty – 1.25%
Guard/Reserve – 1.50%

– On or after October 1, 2011:

Active Duty – 0.50%
Guard/Reserve – 0.75%

For more information about VA loans click HERE

For current VA loans limits click HERE

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

USDA Loans Changing

Mon, 19 Sep 2011 13:34:43 -0400

On October 1^st, 2011 USDA is making a few changes to its home loan program. Currently USDA allows a 100% home loan in designated areas, with a 3.5% upfront funding fee (that can be rolled into the loan amount), and no monthly mortgage insurance.

Under the new rules USDA will still allow a 100% home loan, but is reducing the upfront funding fee to 2% (that can be rolled into the loan amount), and adding a monthly mortgage insurance premium of .3%.

So how does this look?

Current numbers on a $300k USDA Loan at 4.5%:

$300k base loan amount + $10,500 (3.5% upfront funding fee) = $310,500 total loan

Principal and Interest payment = $1573.26

Under the new USDA home loan guidelines on a $300k loan at 4.5%:

$300k base loan amount + $6,000 (2% upfront funding fee) = $306,000 total loan

Principal and Interest payment = $1550.46 + $76.50 monthly mortgage insurance = $1626.96

Or an increase of $53.70/month

Now this may not seem like a lot but it equates to about $10,000 less in buying power in this example.

For more information on the USDA 100% home loan click HERE

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

100% USDA Rural Home Loans

Wed, 05 May 2010 20:26:42 -0400

There’s a great home loan program for those looking to live in “rural areas” called the USDA home loan. It’s a government insured loan for owner occupied single family homes and there are no limits on loan amount or purchase price. The program offers a 30 year fixed loan at a rate that runs about a quarter over the day’s FHA rate.

Income and Asset Limits:

In Sonoma County, the household income is limited to $92,450 for a family of 4. In a household of 5-8 that can increase to $121,450. Assets are also limited to 20% of the purchase price. So a buyer with $60,000 in assets (savings, investments) is eligible to buy up to a $300,000 home in Sonoma County.

For more on income limits in other counties click HERE

Eligible Sonoma County Locations:

A large area of Sonoma County is eligible for this 100% USDA Rural home loan. Excluding Santa Rosa up to Larkfield, Rohnert Park/Cotati, City of Sonoma and Petaluma, the rest of Sonoma County is eligible. Included are communities like Healdsburg, Sebastopol, Cloverdale, Windsor, all Russian River area, Graton, and Sonoma Valley along Hwy 12.

To find out if a property is in a USDA eligible area click HERE

Details:

-up to a 6% seller credit

-no reserves required

-credit scores can be as low as 620, but under 660 requires a special waiver

-appraisal is done by a HUD certified appraiser and all section one items need to be cleared

-single family homes only

-upfront guarantee fee is 2% and can be financed as part of the loan

-.3% monthly mortgage insurance

-property taxes and home owners insurance impounded in payment

A USDA home loan example:

$300k purchase price at 4.5%:

$300k base loan amount + $6,000 (2% upfront funding fee) = $306,000 total loan

Principal and Interest payment = $1550.46 + $76.50 monthly mortgage insurance = $1626.96 + $60 home owners insurance + $312.50 property taxes = $1999.46 total house payment.

Expect 60 day escrows.

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

CalSTRS Home Connection Program

Fri, 26 Aug 2011 11:37:35 -0400

The California State Teachers Retirement System is discontinuing their 80/17 program that allowed CalSTRS members to purchase a home with a 17% second from CalSTRS and 3% down from their own funds making home ownership more attainable.

As of October 1^st 2011, a new program will replace it called Home Connection. Here are some of the highlights:

-80% 1^st lien mortgage (30yr fixed)

-15% 2^nd lien mortgage from CalSTRS (30yr fixed)

-Interest rate on the 2^nd lien will match that of the 1^st

-5% down payment from CalSTRS member

-700 minimum credit score on single family residences

-740 minimum credit score on condos

-60 day rate lock

This new program will keep home ownership a reality for many with less than 20% down, but like the rest of the lending industry, the program has tightened their guidelines and increased the down payment requirement.

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

PMI: out of business

Sun, 21 Aug 2011 20:24:14 -0400

PMI, the private mortgage insurance company that helped millions of people with low down payments purchase a home is no longer in business. As of Friday August 19th they stopped issuing mortgage insurance for those with less than 20% down. Here’s the announcement:

So what does this mean for those with less than 20% down?

Nothing right now; there are other mortgage insurance companies such as MGIC, RMIC, Radian, and Genworth that still provide these services. That being said it’s a trend that should be watched closely; if one of the most popular and biggest private mortgage insurance companies closed its doors, another could be next.

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

City of Petaluma Water-wise Conservation Program

Wed, 20 Jul 2011 17:47:02 -0400

The City of Petaluma has a free program that allows customers to sign up for a water-wise house call in an effort to make the inside and outside of your home more efficient and helping you to lower your water bill.

You can sign up online for an appointment here:

http://cityofpetaluma.net/wrcd/waterwise-housecall-signup.html

or call 707-778-4507

Once you schedule an appointment a water efficiency professional will check the following areas:

Indoors:

Inspect faucets, showerheads, toilets and other water using equipment for flow rates and leaks
Provide free low-flow aerators, kitchen faucet swivel heads, and showerheads if needed
Share details about how you can qualify for our high-efficiency toilet and clothes washer rebates
Outline the best and most practical ways to maximize your water savings

Outdoors:

Test sprinkler system and look for leaks and broken sprinkler heads
Identify areas of the system that may need maintenance or upgrades
Discuss what soil type you have and how it affects watering needs
Provide an efficient irrigation schedule for your timer if you have one. They’ll even program the timer for you
Provide free low-flow hose-end nozzles if needed.

The inspection should take about 45 minutes to an hour and once it’s completed, you’ll receive a report of your home's water using fixtures, appliances, and irrigation equipment. You’ll also receive a certificate to display if and when you decide to sell your home that shows the home is water efficient.

In order to qualify for the City of Petaluma’s High Efficiency Toilet Rebate and High Efficiency Clothes Washer Rebate program you’ll need to have a water-wise inspection completed.

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.

Loan limits changing in October

Fri, 24 Jun 2011 18:27:36 -0400

In 2008 Congress passed the Economic Stimulus Act of 2008 which raised the loan limits GSE’s or Government Sponsored Entities (Fannie Mae, Freddie Mac, and FHA) would purchase and insure. This made certain Jumbo loans much more affordable and readily available to borrowers.

The traditional conforming loan limit was $417,000 in the lower 48 and the bill raised that up to $729,750 in certain counties.

In Sonoma County the limit was raised to $662,500 and in Marin and Napa Counties $729,750 was the limit.

Come October 1^st, 2011 the limits are being reduced.

Here are the new limits:

Sonoma County: $520,950

Marin County: $625,500

Napa County: $592,250

These lower limits will raise lending costs for many mid range buyers as Jumbo interest rates historically are .25% to a full point higher than conforming mortgages, require at least 20% down, higher credit scores, and even stricter guidelines than the GSE’s.

The bottom line is that if you’re looking in the affected loan ranges, unless Congress extends the higher loan limits, purchase your new home soon!

Check current FHA loan limits by click this link

Michael Regan (NMLS #275695) specializes in Marin, Sonoma, and Napa counties. You can reach him at 415-672-2499 or online at www.TheReganTeam.com

Follow me on twitter and become a fan on facebook.