FHA Approval for Condos? Where to start???

Currently, the FHA approval process for condo buildings offers two dimensions for current homeowners and homeowners associations. Two types of FHA approval exist, DELRAP and HRAP. Questions and confusion abound regarding this issue so here are a few details to begin helping you navigate through the web of FHA chaos.


FHA Approval Types involved:

1. DELRAP: This is an FHA Approval that a lender can approve in conjunction with a loan application. It requires the same paperwork as an full FHA Approval with the addition of a fee. The turn time frame is shortened to approx. 2 – 3 weeks. A few limited investors (lenders) offer this type of approval. The approving lender accepts the risk if the property doesn’t meet the FHA requirements, so the risk exposure is great, hence only a few main investors will do this. The investor reviews the declarations, budget, bylaws, etc. and if they see anything that raises a red flag such as: special assessment, limited reserves, or any other non-favorable issue they will send the file to the local HUD office to review. Now the process turns into a full HRAP Approval, which is the standard FHA Approval, and takes 8 – 12 weeks.

2. HRAP: This is the standard FHA Approval. The association, seller, or whoever can submit this approval to FHA directly (free) or with assistance of a lender or an FHA Approval Company for a fee.

Hopefully this is a start to clarify the FHA approval system. I will continuously update the progress and conclusions of the initial approvals.

Green New Year's Resolutions - Simple, Cheap, and Easy!

I wish you every happiness this Holiday Season and prosperity in the New Year. Thank you again for supporting me in these crazy times, I appreciate every referral. Be safe and warm this evening!

Here are a few SIMPLE Green resolution ideas for 2010!!

1. Replace 1-5 light bulbs with CFL's, simple, inexpensive and resolution complete!
2. Replace plastic grocery bags with reusable bags,some are free or no more than $1!
3. Vow to bike 10 more times than last year, or take public transportation.
4. Buy a power strip, you can save $100's per year by turning of unused electronics.
5. And lastly, (drum roll...) HAPPY NEW YEAR!!!!!!

Green Up Your Holidays!

BUY ENERGY-SAVING "LED" HOLIDAY LIGHTS.
Now you can decorate your house with LED lights that use 90 percent less energy than conventional holiday lights, and can save your family up to $50 on your energy bills during the holiday season! LED lights are available at many major retailers, including Target, CostCo, and Ace Hardware.

MAKE YOUR OWN WRAPPING PAPER.
Most mass-produced wrapping paper you find in stores is not recyclable and ends up in landfills. Instead, here's a great chance to get creative! Wrap presents with old maps, the comics section of a newspaper, or children's artwork. Or use a scarf, attractive dish towel, bandana, or some other useful cloth item. If every family wrapped just three gifts this way, it would save enough paper to cover 45,000 football fields.

ADD ORGANIC & LOCAL FOODS TO YOUR HOLIDAY FEAST.
Support local family farmers who grow sustainable meat and produce. Not only does it taste better, you'll be doing your part for the planet too. Looking for an organic turkey or ham for Christmas dinner? Find out where to get local green products in your neighborhood.

STOCKING STUFFERS: TEST YOUR ECO- KNOWLEDGE.
Do you have a family member who loves the outdoors? Stuff their stockings with Sierra Club Knowledge Cards, which come in a variety of outdoor themes ranging from survival skills to baby animals. Another great stocking stuffer is "guilt-free" chocolate! Give the gift of organic, fair-trade chocolate and you can eat your way to a better planet.

GIVE THE GIFT THAT GIVES BACK!
Help support the critical work of the Sierra Club and give an eco-friendly gift at the same time! Sponsor a Wild Place this holiday season and share our country's most special wild places and national parks with friends and loved ones. Sponsorships start at $20 and come with a range of special gifts, like a photo, plush animal, certificate of sponsorship, or a backpack. For last minute shoppers - or the most eco-conscious person on your list - download a virtual version and print or email your gift right from home

GET A PESTICIDE-FREE TREE.
Demand is on the rise for Christmas trees that are not covered in chemicals; some growers use 40 different pesticides, as well as chemical colorants. The good news is that there are now a number of tree-farms that sell pesticide-free trees, so ask your local Christmas tree seller, or search for an organic tree farm near you.

RECYCLE YOUR CHRISTMAS TREE.
Ninety-eight percent of Christmas trees were grown on farms, not in forests, so at least it's not as if you're cutting down an ancient tree. Each year, 10 million Christmas trees end up in the landfill. While your tree won't fit in the recycling bin with your newspapers and bottles, you can recycle your tree: many cities offer programs to turn your tree to mulch or wood chips. Call (800) CLEANUP or visit www.earth911.org to find the tree-recycling program near you.

DONATE YOUR TIME OR MONEY TO AN ENVIRONMENTAL GROUP.
Get into the holiday spirit by volunteering! There are countless ways to help improve your community—and the planet—from cleaning up a local river to helping inner city kids experience the outdoors for the first time. Contact your local Sierra Club to find out about volunteer opportunities near you. A donation in honor of a loved one can also be a special holiday gift.

DO A "COOL HOME" TOUR WITH OUR ENERGY-SAVING CHECKLIST.
Take a pledge this New Years' to reduce your home energy use by buying energy-efficient light bulbs. Installing only 6 compact fluorescent light bulbs will save the average American family $60 per year. You can also use our handy "Cool Homes" checklist to see what easy things you can do in your home to save energy. If there's a fire in your fireplace this Christmas, turn down that thermostat! Lowering the temperature even five degrees can take 10% off your energy bill.
>> Check out a complete list of energy-saving tips.

RECYCLE YOUR OLD CELLPHONE.
Getting a new cell phone for Christmas? Not sure what to do with the old one? Now, you can drop off that old phone at any Staples store, as part of the Sierra Club cell phone recycling program. Each year, 130 million cell phones are thrown out, weighing approximately 65,000 tons. Recycling your old phone prevents hazardous elements like mercury, cadmium and lead from ending up in our landfills.
source: http://www.sierraclub.org/holidays/

CONFUSION? JOIN THE CLUB!

The uncertainty and confusion surrounding the mortgage and real estate markets are quite extraordinary. Obviously questions arise on a daily basis from people regarding the actual truths. The media does not accurately portray the reality of the market; if you do not want to speak with me I highly suggest you speak with a mortgage professional that has experience to answer any questions. Some common questions lately:
• Can I still pull cash out on my primary residence?
• Can I pull cash out on an investment property?
• If my home has declined in value I cannot refinance?
• I am self-employed there are no loans for me?
• Is it too late for the First Time Homebuyer Credit?
• Can I do 100% financing?
• Can I buy a condo with an FHA loan if it is not an FHA approved building?

I will answer these as straightforward and accurately as possible to the exact time and day I write this. However in this volatile environment guidelines seem to change every nanosecond. Another reason to contact me to answer any questions you may have.

Can I still pull cash out on my primary residence?
Yes, if there is enough existing equity you can pull up to 80% loan to value, meaning leaving 20% equity in the house. For example if a borrower owes $300K and the home is worth $425K, the borrower can increase the current loan to $340K. There are specific rate adjustments related to credit score - but this is the general idea.

Can I pull cash out on an investment property?
Yes, up to a 75% loan to value, similar to the above situation.

If my home has declined in value I cannot refinance?
Not true at all! There are a few options depending on the specific situation. If a homeowner originally had 20%, but no longer, in the past mortgage insurance would have to be added. Now there are two options, depending if the loan is owned by either Freddie Mac or Fannie Mae. Mortgage insurance is not required in the refinance with the appropriate approval up to 95% loan to value with no significant rate hits.
Homeowners can check both these websites to see who owns their loan:
FANNIE MAE:http://loanlookup.fanniemae.com/loanlookup/
FREDDIE MAC:https://ww3.freddiemac.com/corporate/

I am self-employed there are no loans for me?
Actually as long as the last two years of tax returns support income after all adjustments, it is still possible. Issues arise if there is a serious decline in income from one year to the next, otherwise it is still possible. I always request to review tax returns prior to ensure income is sufficient.

Is it too late to take advantage of the $8000 First Time Homebuyer Credit?
Not necessarily, as of now this is set to expire November 30, however the Senate has approved an extension with a few additional nuances to the plan. The new plan extends the credit until April 30 to write a contract and closing must occur prior to June 30. In addition, current homeowners of the last 5 years can also qualify for a $6500 tax credit. The Senate bill would also raise the adjusted gross income cap to$125,000 for single filers and $225,000 for joint filers. We now await the House approval or amended plan.

Can I do 100% financing on a purchase?
Well close to it, FHA allows for a 3.5% down payment plan. This loan has been a powerful driver for first-time buyers, it is a 30 year fixed rate, no adjustments. The rates are at all time lows: 5%-5.5%, depending on the borrower. VA loans will allow for 100% financing as well, but obviously only veterans can use this.

Can I buy a condo in a non-FHA approved building?
As of now spot approvals are still allowed until December 7 of this year. Basically we can gather the pertinent building information and request for a single approval. These have worked beautifully thus far, hopefully it will continue.

HALLOWEEN AFTERMATH!

Well with bellies bulging and teeth aching from too much candy this Halloween, it’s time to refocus on the year to come. 2010 is looming as the beginning of the recovery: job increases, housing market improvement, new construction starts, steel mills opening (ok well maybe not on that one). Regardless of the validity of current conjecture, some things are worth mentioning.

As far as The Fed is concerned, according to their statement today, the economy is beginning a slow recovery period, with inflation at bay, even with a severely weakened dollar, and major support still stemming from the government to support lower interest rates.

“Conditions in financial markets were roughly unchanged, on balance, over the intermeeting period. Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales.” (FOMC, Nov 09)

Well it could be worse, the tentative words and lack of any descriptions of future plans left investors and people alike, feeling, well status quo? Is that a good thing? Can we buy into this recovery? Ask the person next door who has not worked in over a year, the couple who planned on retiring this year, now postponed indefinitely, or the single mother who lost her health insurance benefits.

Recovery is just a word, albeit a positive word and a drastic improvement from its counterpart, recession; but when can we truly see the results of the recovery? In this humble opinion, in the small things: the local coffee shop whose doors seem just a little more full, the week that passes where you do not hear of someone losing a job, maybe even a person actually getting a job. These subtle signs of improvement continue to increase the so desired forward momentum this economy craves.

So enjoy another piece of Halloween candy, that innately evil candy lasting until New Years; just in time, of course to adamantly refuse the gluttonous indulgence ever again! Instead, take a minute to notice the subtleties of recovery and just maybe it will become reality.

Improved Interest Rates Amid Negative Data

Last week proved to be very busy week, with the end result being a very positive move in interest rates. The decrease in interest rates is due to negative data exceeding expectations for August's Existing Home Sales and New Homes Sales reports. Existing-home sales posted an unexpected 2.7% decline in August, to a 5.1 million-unit annual rate, the first reversal after four months of gains. However according to the National Association of Realtors®, Lawrence Yun, NAR chief economist, said the tax credit is working. “Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus.”

Something obscured by the negative data is: the actual supply of homes for resale actually fell by almost a month and new homes by .3 months. The decreased inventory reflects a positive shift in the market, even if the current sales trend may initially seem negative.

Case-Schiller reported a third month of gains for home sale prices. Tomorrow we have MBA purchase applications and the ADP employment report, plus later in the week jobless claims and other potential market movers. Rates are low today, but for how long depends on present expectations versus actual data this week! Stay tuned.

Realtor on the Forefront of Green Movement!!

I just wanted to take the time to mention a friend and realtor who has chosen to take a unique perspective on the “Green Market” in Elmhurst. Laura Reedy Stukel of L.W. Reedy Real Estate not only created a “Reedy, Set, Green Homes” campaign , and, the 5x10 Challenge among a slew of other grass roots movements to benefit her neighborhood and local charities; she is also the recipient of the Better Homes and Garden "green improvements" winner of its biannual Home Improvement Challenge.

The Chicago Tribune also found her worthy of a full article in Sunday’s real estate section - this article touches on what Laura has tried to convey from the inception of her Green Initiatives. Green improvements may not always be the most glamorous, but the focus on improving your home’s energy efficiency will continue to provide a return on investment well into the future, more so than choosing bamboo flooring, for instance.

All of this in just one year! Congratulations on such an accomplishment already, I cannot wait to see what is next. Laura and her husband Ray were also able to qualify for my Green Solutions™ Mortgage that rewarded their green improvements by giving a below market rate with zero lending costs on their refinance!