Down Payment Assistance in Atlanta
May 13, 2008 | Leave a Comment
The Nehemiah Program
This morning I had the privilege of attending a seminar about down payment assistance and how it can benefit both buyers and sellers in the greater Atlanta market. The seminar was taught by Leslie Kane, Area Manager, of The Nehemiah Program. The Nehemiah Program is charitable organization that has helped over 40,000 families in Georgia achieve their dream of home ownership.
The Nehemiah Program began in Sacramento, California in 1994 and was designed to help a particular community become more stable. The program gets its name, Nehemiah, from a biblical figure that helped rebuild the walls of Jerusalem and since the program was being utilized to help rebuild a community it just seemed to fit.
How Down Payment Assistance Works
If a buyer is qualified to purchase a home using FHA financing then they are automatically qualified to purchase a home using the Nehemiah Program. The home being purchased must be owner occupied and can be single family, duplex, triplex, quadraplex or a FHA approved a condo. With FHA loans the buyer is required to make a minimum down payment of 3% of the loan amount. By utilizing the Nehemiah Program the seller contributes the down payment for the buyer. At the time of entering into a contract with a buyer for the purchase of the home, the seller agrees to contribute the down payment and a small processing fee to the program. This is accomplished using the Participating Home Agreement form from Nehemiah. The program in turn contributes the down payment for the buyer. The buyer completes a Gift Letter form detailing where the gift funds came from and what address they will be used for purchasing. This type program can only be performed by a charitable organization. (Sellers are only committed to pay the contribution and fee if a buyer utilizes The Nehemiah Program to purchase the home.)
Who Benefits From a Down Payment Assistance Program?
The Nehemiah Program is helping both buyers and sellers in the greater Atlanta market. Obviously buyers benefit by being able to purchase homes with little or no money out of pocket. Generally speaking this type program would be for buyers with credit that is good enough for them to be able to purchase a home but they lack having the funds for a down payment. Typically prospective buyers who are currently renting or living at home are good candidates for this type program.
Sellers are also benefiting from this program. With the recent increase in FHA loan limits to $346,250 in the metro Atlanta area and $271,000 in outlying areas, more home sellers find themselves in a position to participate in this type program.
Who Qualifies For Down Payment Assistance?
As was stated earlier, if a buyer is qualified to purchase utilizing a FHA loan then they are automatically qualified to participate in this down payment assistance program. To find out if you qualify for FHA financing and down payment assistance Contact Mack.
How to Find a Good Builder
April 30, 2008 | Leave a Comment
So you have decided to build your new dream home. How do you find the right builder? Are you just going to leave it to chance? I hope not. You are preparing to make what is possibly the largest purchase you will ever make. As a buyer you owe it to yourself to practice your due diligence and find a builder who is qualified to build your dream home as well as being someone that you can communicate with about your wishes and desires in your home.
In the Atlanta Real Estate market, the most common ways for a buyer to find prospective builders are via the internet, their REALTOR, word of mouth from their family and friends or from the local Home Builders Association. Once the candidates have been identified the buyer and their buyer’s agent should begin the due diligence period by asking questions to determine the best fit. Here is a list of possible questions to ask:
- How long have you been building homes? (You are looking for 3+ years)
- Is your primary source of income derived by homebuilding?
- What insurance coverage’s do you carry? (You are looking for general liability, workman’s comp, and builder’s risk.)
- What is your primary source of information regarding changes in building codes? (You are looking for trade associations such as the home builder’s association or various continuing education classes)
- What is your written warranty on the homes you build and can I have a copy of it to review?
- What is your policy on home inspections? (You must be allowed to use a code certified inspector)
- Will you provide me with references from your homeowners?
- Due to today’s economic time and the state of the real estate market, would you be willing to share your financial information with us?
- Why should we select you to build our home?
While these may not include every question that you may need to ask, it should provide a good start. Even if the home you are looking to purchase is already started and at some stage of completion you should still ask questions of the builder. After all you are interviewing as an employer. You are hiring someone to build your home.
How does a Short Sale Effect Value
April 20, 2008 | Leave a Comment
One of the requirements of being a licensed agent is to successfully complete various continuing education classes during each year. Last fall I attended a class on “Understanding Appraisals”. The instructor for this class is an Atlanta Appraiser by the name of Scott Murphy. I found Scott to be extremely knowledgeable and he was more than helpful for the agents taking the class. Taking into account Scott’s experience and expertise, I requested his insight on the effects of a short sale on appraised values from an appraiser’s viewpoint. The following is Scott’s reply:
The effect on the market due to short sales is yet to be seen. Short sales are relatively new to the market. Many short sales will go to investors who know how to manage the complex and time consuming process. They will work the system to obtain the property significantly below market. They in turn will relist and sell the house at market value, much the same as the foreclosure process. These sales will hopefully self correct themselves. The sales that will be most damaging to the market are those which sell to owner occupants slightly below market value with full market exposure.
The true test to the validity of the sale and to determine if the sale is a true arms length sale would be its exposure to the market. Foreclosure sales are generally discarded because a lack of exposure to the market or they are significantly inferior in condition to other homes in the neighborhood. Short sales, on the other hand, are typically in similar condition to other homes in the neighborhood. If the home is multiple listed for a reasonable amount of time (IE: 30 days or more) it is then thought to have been adequately exposed to the market and may very well be an arm’s length sale. The effect these sales will have on the market will be determined by the exposure and the number of them in a given neighborhood. Most neighborhoods can support 1-2 short or distressed sales without altering values. When the number of short of distressed sales exceeds the number of arm’s length sales values will significantly decrease.
I want to thank Scott for taking the time to share his insight. His answer has brought up an even more thought provoking question, Are short sales in any way responsible for the declining markets as viewed by the various mortgage lenders? If so would they not be like a double edged sword, they cut the losses of the lender by foregoing a foreclosure but create a more difficult lending environment for purchasers because entire market areas are becoming classified as declining markets.
Short Sale in Atlanta
April 18, 2008 | 1 Comment
If you are having difficulty paying your monthly mortgage payment, you are not alone. Lenders got very creative, even greedy, while inventing mortgage programs that helped families buy their first home or refinance existing mortgages. Many of these programs were for buyers with no money for a down payment or for families with less than perfect credit. These loans were known as subprime loans. One of the most popular of these loan programs were the hybrid adjustable rate mortgage. A hybrid ARM has a low interest rate initially (a teaser rate) which is followed by significant upward adjustments during the remaining years of the loan. Other than lenders, declining or flat markets and tougher economic conditions have contributed to everyone having a more difficult time meeting our monthly obligations.
Recently a new phrase has come into the real estate market, not only in Atlanta, but throughout the nation. That phrase is a short sale.
What is a Short Sale
A short sale is when you have the ability to sell you home, but the proceeds from the sale are less than the actual payoff and expenses involved in selling the home. In a short sale, the mortgage company agrees to accept less than the payoff they are owed. A short sale is an alternative to foreclosure which may benefit both the lender and borrower. Typically a short sale is a better solution for the lender than foreclosure. If the lender had to foreclose on the property, they would be responsible for attorney fees, possible eviction costs, utilities and other various costs associated with a foreclosure. In allowing a short sale the lender may be able to reduce their losses compared to a foreclosure. One important point is that the lenders typically require documentation as to the hardship that has caused the need for a short sale.
What Hardships are Acceptable
Most mortgage companies require a hardship letter prior to discussing a short sale. The hardship letter should present the facts clearly and honestly and must provide the proof regarding the situation that caused the borrower to fall behind on their payments. The following hardships are frequently accepted by mortgage lenders:
- Job Loss or significant loss of income
- Divorce or Separation
- Excessive Medical Bills
- Death of a Spouse
- Military Service
- Adjustment in Mortgage Payment
How Does a Short Sale Affect My Credit
The late payments that lead up to the short sale will, as expected, have a negative impact on your credit. The main advantage to a short sale is avoiding foreclosure. A short sale should be less detrimental on a credit report than either a foreclosure or a deed-in-lieu of foreclosure.
The Mortgage Debt Relief Act of 2007
By signing H.R. 3648, The Mortgage Debt Relief Act of 2007, President Bush changed the tax ramification for anyone selling their home via short sale or owners who are renegotiating their mortgage. Prior to this legislation signed into law any shortage on a full payoff to a lender was considered taxable income.
Work With a Professional
If you are thinking about a short sale on you home, it is recommended that you meet with a professional and discuss you exact circumstances so that you can be given the best guidance for your situation. Working with a REALTOR® who knows how to talk with the Loss Mitigation Departments at the lender as well as being able to guide you on all the proper documentation required for a short sale will make this process easier for you. The actual documentation required by each lender can vary dramatically. To successfully complete a short sale transaction it is necessary for you to have all the elements documented and in place along with having an effective short sale strategy.
I will be happy to meet with you to evaluate your situation and discuss the options that are available to you. Feel free to contact me via email or phone.
Hail Damage in Atlanta
March 17, 2008 | 9 Comments
Tornado Hits Atlanta
This past weekend was one of the most interesting weekends the Metro Atlanta area has ever experienced weather wise. Friday evening about 10:00 a tornado touched down in downtown Atlanta. Extensive damage was done to the Georgia Dome, the Georgia World Congress Center and various additional buildings throughout the area. Airborne debris and high winds broke windows and lifted the roofs off of several structures. The SEC Basketball Tournament was suspended Friday Night and then relocated to Alexander Memorial Coliseum on the Georgia Tech Campus when it resumed on Saturday.
Saturday Was Even Worse
While Friday evening was exciting, Saturday was even more eventful. Starting about noon storm after storm seemed to be like freight trains running through North Central Georgia. Even though it could have been much worse, there were two fatalities. My thoughts and prayers go out to the families effected
Have Your Roof Checked
The news broadcasts have shown much of the visible destruction. What cannot be seen is the damage that hail can cause to a roof. If your home was in one of the area that received hail, do yourself a favor and have a qualified roofer examine your roof for any hail damage. It is much better to catch it now before you have water damage to your roof and attic.
Woodbridge Crossing
March 14, 2008 | 2 Comments
The Providence Group is growing again. Mark your calendar for the 25th of March for the Grand Opening and ribbon cutting ceremony at the covered bridge which is located in the Historic Concord Covered Bridge Area of Smyrna. Special guests Mayor Max Bacon, City Council Representative Pete Wood and Harold Smith of the Smyrna Historical Society will be joining Pete and Warren Jolly of Jolly Development in commemorating the opening of the covered bridge.
Woodbridge Crossing is a gated community of upscale single family courtyard and garden homes priced from the high $300’s to the mid $500’s. The community offers swim facilities, an outdoor seating area with fireplace and a clubhouse with a full kitchen. The HOA provides landscape maintenance for all homeowners leaving more time to enjoy the rich history and entertainment available in the area.
Individual homes feature carriage-style garage doors along with brick, siding and stone on the exteriors. However the interiors design features are what sets these homes apart. Gourmet kitchens with granite counter tops, tile back splashes, custom cabinets and stainless appliances are just the start. The main level of each home includes 8 foot doors, hardwood flooring and detailed trim packages. The large Master Suites feature luxurious bathes with separate garden tubs and walk-in showers.
To view available homes in Woodbridge Crossing click here
Atlanta FHA Loan Limits Raised
March 6, 2008 | 2 Comments
So what exactly does the FHA do? The FHA provides mortgage insurance on loans made by FHA approved lenders throughout the United States. Since it inception in 1934 FHA has insured more that 34 million loans. Generally FHA loans are easier for buyers to qualify for as they do not have the more strict underwriting guidelines of conventional loans.
We have known that it was coming, we just didn’t know how high the limits would be raised. Well we got the answer today. The Federal Housing Administration, FHA, has increased the loan limits on a FHA insured home loan in Metro Atlanta to $346,250 up from $252,890, an increase of 27%.
This action by FHA should help spur the housing industry in the Atlanta market. Any home priced below $346,250 just became easier for more buyers to qualify for.
Atlanta Real Estate Conditions
February 27, 2008 | Leave a Comment
The Atlanta Real Estate Market has escaped from many of the problems that have affected other major markets. It has been pointed out that the resiliency of the Atlanta market is due to our sector being fueled by jobs and relocation rather than speculative buying as has happened in some of the condominium resort areas. Just how lucky are we? Below you can see one of the policies lenders have adopted that affect buyers in other areas of the county.
In certain areas of the country lenders have implemented what is called a “Declining Markets Policy”. In essence what this policy calls for is for buyers, purchasing property in what the lender has identified as a declining market, to increase their stake in the property. Most lenders are requiring the loan-to-value (LTV) ratio if one loan is being utilized or the combined-loan-to value (CLTV) ratio if multiple loans are being utilized to be reduced by five (5) percent. An example would be rather than being able to obtain 100% financing in a declining market, a buyer could only obtain 95% financing. The exception to this policy would apply for FHA and VA loans. For these government backed loans a second level underwriter review is called for, thus making qualifying more difficult.
Lenders are identifying the declining markets by both city and county in the various effected states. Several sources are being used to determine which areas are included. Standard and Poors Case-Schiller Home Price Indices, The Federal National Mortgage Association, The Federal Home Loan Mortgage Corporation, The Office of Federal Housing Enterprise Oversight Index along with statistics from The National Association of REALTORS are the most common sources used in identifying these areas.
Not only are there declining markets, but several of the lenders are also looking more closely at what have been identified as “Soft Markets”. While these areas are not as drastically affected, the lenders are requiring a second level underwriting review for soft market identified locations.
In the latest report I have been able to obtain, the Atlanta Market has not been identified as either a declining or soft market as defined by these lender guidelines. This doesn’t mean that the buyers market is gone. It just suggests that the Atlanta Market has not been as decimated as some of the other major metropolitan markets. Conditions remain favorable toward buyers with sellers making considerable concessions and interest rates remaining low. To find more information about Homes for Sale, just let me know what your requirements are. I am here to help.
Avoid Foreclosure-Temporary Loan Relief Alternatives
February 20, 2008 | 2 Comments
One of the most important duties that I have is educating my clients and future clients about various aspects of the real estate market in Atlanta. With the current economic climate and foreclosure being discussed on virtually every news broadcast, it is important for consumers that are experiencing financial difficulty to know what their options are. In the recent post about How To Avoid Foreclosure I mentioned that there are some temporary alternatives that do not result in the loss of your home. Let’s take a closer look at what they are.
Forbearance
Forbearance is an agreement between you and your mortgage company that temporarily allows you to pay less that the full amount of your monthly payment or nothing at all during the forbearance period. Generally the mortgage company will consider forbearance when you can show that funds from a bonus, tax refund or other source will allow you to bring the mortgage current at a specific time in the future.
Loan Modification
A loan modification is a written agreement between you and your mortgage company that permanently changes one or more of the original terms of your loan in order to make the payments more affordable. Common loan modifications would include adding missed payments to the existing loan balance, changing an adjustable-rate-mortgage into a fixed-rate mortgage or extending the number of years for you to repay the loan.
A Repayment Plan
A repayment plan is an agreement between you and your mortgage company that gives you a fixed amount of time in which to repay the amount that you are behind on your mortgage. In this alternative you actually pay your regular monthly payment and add an additional portion of the past due amount to each installment. At the end of the repayment period you have paid back the amount that was delinquent.
Reinstatement
Reinstatement occurs when you pay your mortgage company the total amount that you are behind on your mortgage in one lump sum. A reinstatement generally occurs in conjunction with forbearance.
Knowing what options are available to you is often times half the battle. In many situations the best and least expensive alternative will be through working with your current lender or servicer of your loan. If your current lender has no desire to assist you, let me know. I can help you find a responsible lender that will help you or show you additional alternatives.
Sandy Springs Townhomes and Condos
February 10, 2008 | 1 Comment
Alderwood on Abernathy
Priced from the mid $400’s to the mid $600’s Alderwood on Abernathy is a bargain for a townhome community in the trendy Sandy Springs area of Atlanta. An air of sophisticated spaciousness greets all homeowners and guests as they enter the community. Standard features at Alderwood on Abernathy include site finished hardwood floors, hardwood stairs with iron balusters, upgraded trim packages and gourmet kitchens with granite counter tops and stainless steel Kitchen Aid appliances. The oversized master suites provide the owners with an ideal area to unwind in the jetted garden tub and also include his and her vanities, frameless shower doors and granite counter tops. Some of the properties include an optional elevator.
Even though the grounds are landscaped to the max, homeowners enjoy the lawn and exterior maintenance being included with their monthly association dues. Also included are streetlights and sidewalks. Additionally homeowners will soon be enjoying an outdoor gathering area with a covered fireplace, water feature and seating area.
Great Location
Alderwood on Abernathy is conveniently located on Abernathy Road just off GA 400 and only minutes from award winning shopping, dining, and entertainment. Children in the community will attend Spalding Elementary, Ridgeview Middle and Riverwood High schools.
To see current available homes at Alderwood on Abernathy click here.
