Santa Likes These Numbers for Bend, Oregon (Duke Warner Market Trends Report)

Here’s to a happy and joyful holiday season for everyone. A warm holiday season it has been so far here in Bend, Oregon. This has not stopped Bendites from enjoying a great start to our ski season. Living in Bend has such great advantages to the daily grind, it is so nice to enjoy the snow in the morning then follow it up with an afternoon bike ride or escape the grind by heading out to the slopes for a quick hour or two.

Linked here is an early Christmas gift this month’s Duke Warner Market Trends Report.

In this month’s report we actually have seen an increase in active listings, while new listings coming to the market have declined. While most active listing categories are down but relatively equal to last month, listings in the $225,000-$325,000 range have jumped. This category saw an increase of 34 more homes actively listed. Many of these homes have come into the market to take advantage of the favorable reporting the last few weeks. The number of listings in the pending sale category also has dropped dramatically by 68 transactions. The homes that sold in Bend also dropped but this appears to be in line with the season.

Watching our daily sales trends makes me think that December will continue to be solid. One category in a pinch is with those trying to complete their short sales before year’s end. The “Mortgage Forgiveness Debt Relief Act and Debt Cancellation” for distressed homeowners expires then which could leave many successful short sale clients with enormous tax liability. While there has been intense lobbying to extend tax relief, it is being drown out by the fiscal cliff bickering. The effect this bickering has on the rest of the market remains to be seen. This bickering has cast a constant pall on the joyful holiday season and has effectively been the Grinch that is stealing Christmas and beyond. Soon Santa will come and go, as will this crisis too.

I have refused to give in to the Grinch’s his year and have asked Santa to send more referrals. I am pretty sure that Santa will not mind a little help from those of you out there that know someone in need of a hard working broker. Help keep the coal out of my stocking, I am easy to reach.

Have a great Holiday Season and spread a little joy to those known and unknown to you!!

 

203k Renovations Loans Brining Dreams To Life...

Have you ever found that perfect location that you want to live but the house just is not quite right for you? Would the addition of more bedrooms or an expanded kitchen make it that perfect place? Does that perfect location have a home that is not traditionally financeable due to the condition of the home? It’s time to think outside the box.

In today’s market where there has been little new construction over the past four years a lot of the homes that are coming into the market need help. Surprisingly there is a loan program that could make your dreams come true. Created back in 1978 during our last major housing market down turn the Federal Housing Administration (FHA) put a loan guarantee program together called the 203k renovation loan program, this is a sister program to the ever popular 203b loans that comprise the bulk of FHA loans. The loans which are provided through their approved lenders allows for homes to be purchased and renovated all in one loan package.

These loans are intended for owner occupied residences which includes multiplexes up to four units. Also eligible are homes that need to be moved to a new location, condominiums and mixed use properties, all have more detailed qualifications than a single family residence that will need to be met.

With most mortgages borrowers can only purchase a home that meets the requirements and standards of their lender. Rarely can you find a lender that would release funding for a purchase if repairs or renovation are needed. In most cases this meant the repairs would need to be performed before the sale was completed. Any renovation would need to wait until the purchase was completed and required the buyer to find another funding source, such as a second loan, to pursue any renovation. These additional loans are amortized over a shorter period of time, at a much higher interest expense, often crimping the level of renovation.

The 203k program allows a buyer to roll the purchase and the repair/renovation expense into one long term loan at an amazing interest rate and extremely low down payment, currently as low as 3.5%. Now this does come with a few more hoops to jump through than the normal mortgage process. The extra hoops related to this program are working with a HUD certified appraiser to determine the value of the property, both before and after the project is completed, determining the value of the expenses of construction and materials, as well as working with a licensed contractor to name a few.

With the extra hoops in mind have your team assembled before shopping. The major hoop to clear is having a good grip on what the project will cost. It will take some time to put your numbers together and you will need the help of your contractor and possibly an architect. Complimenting this would be to have picked your lender out and have a discussion with them as to the other concerns that you will want to address before embarking on your quest for a the not so perfect property.

So now you have your team assembled and you have found perfect location. It could be that small two bedroom country home with one bathroom and a bad roof on a beautiful parcel of land with larger than life Cascade Mountain views. With this program as long as you leave the original foundation in place you can expand the home to meet your needs. This of course is not without limitations, luxury items and improvements will not be allowed. So that indoor lap pool will have to wait but adding rooms, dry walling, painting, plumbing, electrical, windows, doors, heating systems, decks and roofing are all allowed.

One of the requirements in the 203k program is for the homes to improve their thermal efficiency; a great partner for this would be to tap into the Energy Trust of Oregon. Energy Trust of Oregon can perform energy audits of your home to help develop a plan of attack for your project. The Trust can also provide cash incentives for weatherization, heating/cooling, water heating/treatment, appliances, lighting, energy saver kits and much more. They also can be a valuable resource for green technologies in wind, solar and hydro power. Energy Trust of Oregon is a great example of being able to use a number of public assistance programs in conjunction with the 203k program. Locally Neighborhood Impact is a great resource for researching what other programs may compliment your project.

Time now to calculate your loan amount, in the 203k program the FHA allows the lesser the following scenarios; The as-is value or purchase price of the property before the renovation plus the estimated cost of the renovation or 110 percentage of the after-improved value of the property this is then multiplied by the appropriate loan to value factor. In Deschutes County the current loan limit is $447,000 which leaves plenty of room to renovate most homes provided you match up well with qualifying income to support your needed loan amount.

Being that this is an FHA loan; the list of pluses for this program is long. Starting with no income limits, accommodating today’s market FHA accepts credit scores down to a 620, debt-to-income ratios that can be up to 50%, cosigners are allowed, super low down payment of 3.5%, gift money can be used as down payment assistance allowed for down payment and seller concessions up to 6%. Interest rates will be a bit higher than what you find on other loan products but generally they run close to where the FHA 203b loan program is to about a quarter percent higher.

I think that we have possibly given you enough information to pique your curiosity. There are some other hoops and nuances that we will not cover here today along with one variation of the program, the streamline 203k for smaller renovations. I would be glad to meet with you to discuss the nuances and the streamline program.

So if the hoops have not daunted you and you would like assistance in developing a team I can help. We can start searching active listings for Bend, Oregon for the perfect project while you assemble your team. It will be exciting helping you turn your dreams into reality.

Home Sweet Home

First time home owners are you looking for your first “Home Sweet Home”? The Oregon Bankers Association in conjunction with the Oregon Association of Realtors® has put together a program to assist first time home buyers in obtaining their first “Home Sweet Home”. The program is focused on providing homeownership opportunities for low and moderate income Oregonians earning less than or equal to 100% of the area median income.


To get started the first time home buyer must be working with a lender who is a member of the Oregon Bankers Association and a Realtor® who is a member of the Oregon Association of Realtors®. To help the first time home buyer your lender can make available to you a $2,000 grant for your down payment and/or closing costs, along with matching assistance from your lender or other qualified sources valued at a minimum of $500.


ELIGIBLE BORROWERS

To be eligible for a $2,000 grant you must:

• Be qualified as a first‐time homebuyer.

• Occupy the property you purchase as your principle residence.

• Not have household income over 100% of the area median income in the county where you purchase your home. Median income varies by county, so ask your lender for information on specific limits.

• Have no major credit obstacles.

• Have no more than $10,000 in liquid assets left after loan closing.

• Successfully complete an approved homebuyer education course.

• Be a legal Oregon resident or be pursuing permanent residency.


ELIGIBLE PROPERTIES

Eligible properties include any new or existing single‐family residences located in the State of Oregon, including site‐built homes, condominiums, townhouses and manufactured homes. Properties must meet quality standards required to qualify for a mortgage loan.


TYPES OF LOANS

The following types of loans may be used in conjunction with a HOME Sweet Home

Program grant: 􀁹 FHA 􀁹 Conventional

State Bond 􀁹 Rural Development 􀁹 VA


AMOUNT OF ASSISTANCE

In addition to the $2,000 grant, your lender will help you determine the type and amount of additional assistance from other sources that fits your needs and budget.


HOMEBUYER EDUCATION

Successful completion of an approved homebuyer education course is required to be eligible for assistance through this program. If you have not completed such a program, please contact your lender or visit www.oregonbond.us/OHCS/SFF_Homebuying_First_Time_Homebuyer_Training.shtml to learn about upcoming classes in your area.


ELIGIBLE LENDERS

All banks in Oregon that are members of the Oregon Bankers Association are considered
eligible lenders. A list of OBA member institutions can be found at http://www.oregonbankers.com/members/bank‐members/list/ . Qualified homebuyers must obtain financing through an eligible bank in order to access the HOME Sweet Home funds and must be a working with a REALTOR® in good standing.


Visit your bank to inquire about accessing the HOME Sweet Home Program.

Good News For Buyers Qualifying for the Home Tax Credit…

Home buyer’s looking to keep their homebuyers tax credit in play received good news today. The bill which extends the timeline for those buyers who had a qualified offer in to purchase a home before April 30th and receive the home tax credit was passed by the Senate last night. The original bill for the extension of the home tax credit had been tied to the additional unemployment benefits bill which had failed in the Senate earlier this week. Heavy lobbying by the National Association of Realtors® (NAR) enabled the bill to be introduced as a free standing bill which passed the House of Representatives and Senate. The bill now awaits the President’s signature.

The bill also contains additional provisions to tighten the rules to prevent tax credit fraud. Given the news earlier this month concerning prison inmates, some who are in for a life sentences receiving benefits from the tax credit, this should be a welcome inclusion to the bill. One can only imagine how many other scams are defrauding the program are out there, hopefully the provisions in this bill can curtail a good portion of the fraud.

The federal home tax credit was part of the American Recovery and Reinvestment Act signed into law in February 2009. The $8,000 credit was available to first time buyers who purchased a house after January 1, 2009 and was originally scheduled to expire on November 30, 2009. The credit was seen to have stimulated home sales, especially in the lower price ranges, and in November Congress extended it through April 30 and added a $6,500 tax credit for non-first-time buyers.

Those who had qualified offers in before the April 30th date were given until June 30th to close their transaction. In many areas title companies struggled with the added push of home buyers trying to complete their deals creating a backlog that could not be cleared by the deadline. Others struggled with cumbersome short sale proceedings, even the most straight forward transactions can take an excoriating amount of time to complete. The new date to complete transactions for the tax credit is September 30th.

New Grant Program available to help first time Oregon homebuyers!

Available starting today is a grant for first time home owners who earn less than or equal to the median income for their area of the state. Created by a partnership of the Oregon Association of REALTORS® and the Oregon Bankers Association, the HOME Sweet Home Program (HSHP) is designed to provide homeownership opportunities for Oregonians.


The Ira Gribin Workforce Housing Grants Program has provided the initial funding by providing $80,000 grant to the Oregon Realtors Association HOME Foundation. The goal is to address the growing need for affordable housing to the average layperson.

First time homeowners will be eligible for a $2000 grant funded by HSHP. Those interested in this program must be working on the home purchase with a broker who is a REALTOR® and obtain their mortgage through an Oregon Bankers Association member bank.