This program was developed to help address first-time home buyers’ concerns about potential job loss and how such a loss would impact their ability to make their mortgage payment. Through the Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for up to six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months.
The first time home buyers tax credit ends in a few month, together withe the mortgage protection program this is a time to get serious about buying a home.
And the definition of a first time home buyer: someone who has not lived in his owner occupied home for 3 years. So technically, someone who owns rental property and has been renting the last 3 years is a first time home buyer.
The government pays you to buy a house, go for it!
Mirjam
Mark Quinn provided a very informative presentation at the April 1 meeting of the Sonoma County Alliance held at the Santa Rosa Golf and Country Club. The Sonoma County Alliance is a county-wide coalition of business, agriculture, labor and individuals incorporated to encourage a healthy economy, maintain a sound environment, protect private property rights and promote a responsive political process. Their monthly forums seek to maintain a visible force in community affairs; engage elected officials in dialogue regarding the establishment of public policy; provide a forum for its membership concerning land use and development, housing, taxation and allied matters; and increase membership interest and participation in legislative and political affairs on a countywide basis.
Mr. Quinn discussed the recent changes to the SBA 7a and 504 programs in addition to discussing a new program entitled the “American Recovery Program” that will be available in the next 6 weeks. These programs are the backbone of loans for working capital as well as real estate and business acquisition for small businesses.
According to the SBA website www.sba.gov, “The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.” The Obama Administration has specifically set aside funds to stimulate the small business economy since it is recognized that small business is critical to our economic recovery and strength during this recession. Large companies are shedding jobs and it is small businesses that hopefully will add jobs under the government stimulus plans.
Some if the program changes that Mr. Quinn discussed where 1) increase funds of $50M distributed to non-profits for the SBA Micro loan program 2) SBA 7a fees waived which are normally passed on to the small business from banks and the increase from 75%-90% guarantee to banks, and 3) the potential of the Dept of Treasury to buy 7a loans on the secondary market where some banks pick up added revenue. He also introduced the American Recovery Program which will be a new SBA program that will provide “short” term loans specifically for business that may be facing short-term cash flow problems during the recession. Loans will be up to $35,000 and the SBA will pay the first year interest and payment due for the first year. Further details forthcoming in the next few weeks for this program.
Mr. Quinn acknowledged that more resources are needed for the department to assist in processing loans and streamlining the process however it is up to Congress to fund SBA’s activities. He was hopeful that some additional funds will be increased for operations under the stimulus plan since the SBA heavily depends on it SBA “preferred” banks to really carry the burden of local underwriting, processing and outreach.
Denise Beeson works with Small Business Owners and Real Estate professionals specializing in placing commercial loans including SBA with preferred lending institutions and private money financing.
Earlier this week I had the privilege to be at a financial seminar organized by Wachovia Securities. Senior Portfolio Manager Margaret Patel was the first speaker and besides a lot of valuable information she expects the real estate market to go further down, about 10-15%. Of course this forecast is based on the financial and economic situation in general and is an overview of the real estate market nation wide. However, all real estate is local and the following charts show what’s currently happening in the real estate market in Sonoma County. Please feel free to give your opinion, quite frankly I think with numbers like these we might have hit bottom in Sonoma County…
In the mean time, don’t forget that we live in beautiful Sonoma County and this weekend and the next weekend is Wine Road Barrel Tasting.
Should you like to go next week, it’s cheaper to order tickets ahead of time, click here to order.
Have a great day!
Mirjam -707-486-2638
Some people have compared the current financial turbulence to the 1930’s and other ‘black days’. Some facts to know:
- More than 1000 banks closed in 1930 – only 14 U.S. banks have been taken over in 2008
- There are 76 million households in the U.S. that own their home - 24 million of these homes are free and clear
- There are 52 million homes with mortgages - 97.2% of these are not in foreclosure, 93.8% of these homes are current on their payments
On a sobering note:
- Over 20% of homeowners with a mortgage owe more than their home is worth
- 40% of all foreclosures are non-owner occupied
How did we get here?
Resale numbers – the above does not include new home sales.
Sources: Wall Street Journal / Moody’s Economy.com / RealtyTrac / NAR / Forbes
Do you see the problem and thus the predicament we’re in? Something had to happen one way or the other. Of course no one wanted it to be this bad. Let’s see what’s going to happen the coming time. In the mean time, Pat Kitano has a great way of keeping us informed -
In the mean time, it’s an excellent time to buy real estate!
Mirjam
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Denise on September 15th 2008 in Economy, RE Investing, Sonoma County info
The Press Democrat had a article about the “Bittersweet windfall”: when you bought you home at the height of the market, you can ask for an adjustment for your property taxes. Your Realtor can help you with the ‘comps’ by the way, just call and ask. he/she will know what you need.
However, coming back on the article: Now is a great time to buy property, most people know that by know. However, ever thought of the fact that it’s also a great time to move up/move down? Yes you will sell your home for less than if you would have sold it in 2005 however, what you are moving into is also less and guess what the basis is for your property taxes… yep, current market value, in most cases the price you paid for the home. And for investors: quite a few properties do cash flow…
Actually my friend Raquel stated it very smart: it doesn’t matter when you buy or sell as long as you do it in the same market. It’s very difficult to time a market, investors do in some way, but so far the people that were waiting for the market to come down/go up have done nothing at all. So Raquel is right: ‘do the math’ see whether it makes sense and make your dreams come true!
And some stats to prove that sales are picking up:
Have a great weekend. Great recommendation from Pat Pisenti (best Chiropractor in town) for a small winery with great wines: Porter Creek Vineyards. I haven’t been there recently so let me know what you think.
Have a great day!
Mirjam de Rijk - email: mirjam@c21alliance.com
Pete Phillippe from Indymac Bank was so kind to send an extensive overview with updates in underwriting as of June 1, 2008 Industry wide General Loan guidelines by the Secondary market (some variance with specific Lenders).
- With Foreclosures , reestablished credit history now 3 yrs after event before a new loan given
- No 60 plus mortgage lates within the last 12 months
- Authorized users of credit trade lines will no longer be considered in credit decisions. Can’t piggyback on someone’s good history. FICO now is “not using” card holders good scores for the authorized user to improve their own scores
- On interest only loans, borrowers have to be qualified on the full principal and interest payment
- Min. credit scores 640 for 1 to 2 unit properties, 680for three to four units . . .620 if LTV less than 75% of property value
- Stated income loans max. 80% ltv for w-2 wage earners and self employed or commissioned borrowers, or combinations of salaried and commissioned. Usually 700 middle ficos required. Cash out? 75% ltv’s
- With FHA loans 580 and above FICOs still ok with alternative credit documentation and “good” credit explanations
Dont’ forget, these are general guidelines, exeptions are possible with every lender. For more info, you can also contact Pete Phillipe @ Indymac bank 707-535-1263. He will give all his client free credit reports.
More to come in the coming days.
Mirjam (mirjam@c21alliance.com)
David Leonhardt had an interesting thought in this morning’s NY times.
After being a renter for all the good reasons, he finally decided to buy. The article did make sense, however he forgets the rules of inflation. How much was a 3 bedroom 2 bathroom home in the area where you live 30 years ago? How much was the rent at that time? How much is the rent for that same home right now? To my opinion, in the long run it’s better to buy than to rent, however, if you only plan to live in an area for 1 year (for work or other reasons) you’re probably better of renting.
The New York Times also featured an interesting graph (Buying vs renting). It’s fun to play with it, don’t forget about the rules of inflation though…
And by the way… today is a great day to buy real estate in Sonoma County!
Have a great day!
Mirjam (707-486-2638)
Mirjam on May 30th 2008 in Economy, Buyers, Sonoma County info
George Houghton a CPA in town who is specialized in Real Estate gave a seminar this Friday. His concepts on Real Estate and Real Estate investing in the Bay area are profound and supported by numbers. Please remember, these are concepts, give or take a few years.
Rules of inflation (excluding high tech stuff and salary) : every 30 years add a zero. Think about the value in gold, rent, ticket to the movies etc
For Real Estate: every 10 years values double , every 30 years ad a zero.
Your first house is free. You have to live somewhere and if you take the cost of renting a home, compare that to all the tax benefits of owning a home, it’s almost the same. Rent is paid to someone else, mortgage is paid ‘to yourself’. Of course this does not work for a million dollar home but for an entry level/median home.
Every rental cost about 10% of the value. Yes, this is true, think about it, I look forward to your reaction!
And last but not least: every $10K spend on a car is the same as $100,000 is Real Estate and 1 million in retirement… I know you have to enjoy life but it gives something to think about an spend more consciously.
By the way: George Houghton wrote a book: Unleash the power of Real Estate.
Have a great weekend!
Mirjam (mirjam@c21alliance.com)
I know the market fluctuates all the time but I have been noticing that a lot of homes have been going into escrow, it has been rising over the last 5 weeks. It started slow but then it picked up. And yes, a lot of the homes that went into escrow also closed. Look at the statistics that I pulled from Broker Metrics a program that very conveniently pulls the data from our local MLS system.
The media is giving you info that the economy is going through the drain, the Fed will have to cut interest rates again. Perhaps they are right, but keep in mind John D. Rockefeller who said “The way to make money is to buy when blood is running in the streets.”
The info is also great for sellers, should you need or want to sell your home, the numbers clearly indicate the ‘new reality’.
The above statistic is from all Sonoma County. The drop shows that a some people have take their home of the market at the end of the year, some home owners who were trying to do a ’shot sale’ did not succeed and the property went into foreclosure (these properties will come back a few months later as an REO) and it clearly show the increase of activity.
I look forward to your feedback!
Mirjam (707-486-2638)
