GRANTS to Buy a Home in California

Down Payment Grant Gift

Orange County INCOME LIMITS GENERAL NUMBERS

FHA Max                                             

$85,680 Riverside & San Bernardino
$102,360 Orange County
$85,680 Los Angeles County
$91,080 San Diego County

                               

Compare CHDAP, CHFDAP ACCESS Down Payment Assistance Programs – Which is Better?

Compare CHDAP, CHFDAP, ACCESS Down Payment Assistance Programs – Which is Best?

Home buyer down payment assistance loan programs such as CalHFA’s CHDAP, CHF DAP, and the CHF ACCESS program are three of the most popular first time home buyer assistance programs in California.

The CHDAP and ACCESS program all provide 3% assistance that can be applied towards meeting FHA’s 3.5% minimum down payment requirement.

CHF DAP gives grants gifts five percent

I offer all these mortgage loan programs but each is a little different

CalHFA’s CHDAP assistance, CHF’s DAP Grant, and the CHF ACCESS assistance program will help you make better home financing decision that impact you long after you move into the home.

 

	CHDAP	CHFDAP	ACCESS
Assistance Amount	3% – sales price	5% – loan amount	3% – sale price
3% Assistance	Silent 2nd Loan	Grant	Loan Repaid
Qualifying Area	All California	All California	All California
Mandatory Origination fee?	0	1.5%	0
Credit to pay closing costs?	Up to 2%	Yes	Very Limited
DTI Ratio Max Limit	55%	50%	43% – 45%
Minimum Credit Score	640	620	580
First Time Buyer Only?	Yes	No	No
Income Caps? (county)	Yes	Yes	Yes
Income that Qualifies	Household	Borrower	Borrower
Max Loan Amount	$417+	$500	$417k+
90 Day Flips Allowed	Yes	Yes	Yes
Prepayment Penalty?	No	No	No
Max Seller Contribution?	3%	6%	6%
Gift Funds Allowed?	Yes	Yes	Yes
Cancellation Fee?	No	$400	No
$250,000 Purchase	Comparison	===========	========
Assistance Amount	$7,500	$12,500	$7,500
Down Payment Needed	.5% = $1,250	0	.5% = $1,250
Est. % Rate /apr (call for actual current rate)	3.875 / 4.962	4.5 / 5.413	4.5 / 5.183
Rate on 2nd lien	3.25% (deferred)	NA	8.25%
Mtg P&I Payments + MI	$1,405	$1,208	$1,567

Interest Rate: The interest rate comparison is for a 30 year fixed, 660 FICO score, from a time when CHF published their Platinum rate of 4.5%. Rates can vary, but for the most part, the Platinum and ACCESS mortgage rate is .5% to .625% higher than a regular FHA loan. Rates change a couple times a day. This is not a rate quote. This is not a commitment to lend. These programs may be cancelled at any day at will. APR is listed above as second number 

All assistance programs are subject to funding availability

CalHFA CHDAP Down Payment Assistance Program

As you can see, the CalHFA CHDAP home buyer assistance program typically offers you a much lower interest rate, payment, and is the least expensive option between the three assistance programs. Some people say the CalHFA’s CHDAP is the BEST down payment assistance program in all of California.

CHFDAP Down Payment Assistance Program

The CHF DAP program seems like it should be the better program because the 5% grant never has to be repaid, right? CHF Platinum charges an additional 1.5% up. Plus, the interest rate, on average, is .5% higher than CHDAP assistance program.

 

In the $250,000 purchase scenario above, the CHFDAP assistance program gives you $12,500. for the down payment (less than CHDAP or ACCESS), then charges you a 1.5% fee ($3,618), AND you Just because you can use the Platinum assistance program doesn’t mean you should, right? What do you think?

CHF ACCESS Down Payment Assistance Program

The CHF ACCESS program offers the highest interest rate, reduces how much you can qualify for but does cater to borrowers with lower credit scores. However, since the assistance in the form of a 2nd loan (15 yr fxd) that is actually a fully amortizing payment, you’re paying that 3% loan off and building equity faster.

 

Can I Refinance Out of My Higher Rate Platinum or ACCESS Loan in the future?

To qualify for an FHA streamline refinance, FHA has a 5% net tangible benefit requirement test.

 

In five years (after having built enough equity to 80%  assuming 3% gain in value per year -  or if you have additional funds to pay the loan down sooner) you may be able to refinance out of this this FHA assistance loan and into a conventional loan. Of course your value could go down rather than up. There is no guarantee you will have income or credit to refinance at a later date.

 

The Platinum and ACCESS down payment assistance programs are great for people who don't have a family member who can give them a gift or haven't saved enough money on their own, have lower credit scores (but not always), and may feel the only way to purchase is to accept a higher rate and fee home buyer assistance program.

If you can’t get your credit score to 640, or make more than the CHDAP program income cap, you don’t have many options. That’s when Platinum and ACCESS fill a void. I can help you raise your FICO score for free. Don't be urgent to buy with a low score. Call me to get some action paln to raise the score as it will affect your rate and long term payment.

 

THE CONVENTIONAL LOAN PROGRAM IS MUCH BETTER BUT YOU NEED HIGHER FICO

 

5% Grant combined with Conventional loan

Income limit Orange County = $ 93,750 or $7793 monthly

 

FICO score needed  660

Using 43% debt to income ratio as a target

Individuals will have a variety of parameters, FICO, debts, = many factors to

count into qualifying but these are some general numbers

 

$7793 X 43% = $3351 PITI target

 

 $480000  sales price

$456000 loan     

p and I  $ 2310

                                Mi               380

                                Tax              490

                                Insur.           80

 

                          Total   $3260    They could not have any bills with a $ 480000 loan

Seller pays some of closing costs? OR buyer needs about $4000 to close

***

 

$7000 month income X 43%  = $3010 target

$400000 sales price

$380000 loan

                      P and I    $1925

                      Tax               416

                      MI                310

                      Insur              79

                   TOTAL $ 2730   - 3010 they could have $280 in monthly other bills

Seller pays some closing costs or Buyer needs about $ 3800 to close

***

 

$6500 month income X 43% = $2795

        

$375000 sales price

$ 356250 loan

                                P and I   $ 1805

                                Tax               390

                                MI                 290

                                Insur               77

TOTAL $ 2562 - $2795  the could have $ 233 in monthly other bills

 

O.K you made it through all those numbers. I know it sounds confusing. Just call me and we can talk about your scenario. Everyone is unique.

 

Below are some fun pictures I took with my iphone at MIT with my son as your reward for reading.

 

Stop The Ten Mistakes Buyers Make on Home Loan Application

Boston window

1)Lack of disclosure: Buyers need to be honest. Disclose everything that remotely affects the financing of the home.

I  can fix “broken deals”. I’m here to close your loan on time. But I can’t fix issues that aren’t disclosed.

For example: Just because an issue doesn’t pop up on a buyer’s first credit report, it does not mean it won’t raise its ugly head at the very end of underwriting. Layers of checks occur after the initial mortgage credit report.

Issues that involve past government contact, (i.e. tax liens, unpaid student loans, pending litigation, or criminal fines) often go undisclosed (particularly where there is a “remarriage”) and one (or both) of partners wish to hide their past from the new spouse.

Often these items are so far in the past they (conveniently) “forget” to disclose.  A CAVIRS is run at  closing and sometimes other checks to government data bases. You can be sure the ghosts come out of the closet

Cavirs is the LAST STEP of the “Quality Control” or QC process (after loan docs are drawn, signed and returned to the doc dept.).

Lying will can “sour” Underwriter on a file and may cause them to decline a marginal loan application even after you signed.

2) Lack of preparation/ cooperation.

I am the greatest loan officer when your borrower cooperates  with me.

If buyers aren’t providing information in a timely manner there are usually reasons why…

 Don’t spin your wheels with buyers who have not gotten preapproved.

Agents who remaining in close contact me aids to closing on time. As me to teach you to read a DU and an LP approval. Banks will only have access to one but as a mortgage brokers I can go a variety of ways.

3) Buyer’s go out and apply for credit (in anticipation of redecorating their new home) or make large purchases

I have seen borrowers who went to Car Max and they purposely run your FICO fifteen times through every lender that they can to block you from buying a vehicle elsewhere. Fifteen inquiries in one day can knock your score down one hundred points.

In addition to drastically lowering scores, new debt raises debt ratios.

4) Transferring money around without a “clear paper trail”.

After 9/ 11  the United States government has strict currency laws about funds in and out of accounts greater than five hundred dollars that are not payroll deposits.

If the borrower is receiving gift funds, put the funds into the receiver’s account ninety days before loan submission. This eliminates the need for a gift letter (and the giver’s subsequent documentation).

The problem with gifts is: givers must provide a proof/source of funds (bank statements) and often the giver resents / refuses to provide banking info. The gift person has to provide bank statements all pages.

The solution: Convince the giver to fax banking info directly to the loan officer so their privacy is preserved.

5) Liquidation of 401k or IRA accounts.

Borrowers need to begin the liquidation process inquiry three weeks before the close of escrow.

6) Illegible or Unsigned Documents

From an illegible purchase contract to “blacked out account numbers” on bank statements borrowers and sometimes agents submit unreadable documents.  Borrowers take smart phone photographs of small items such as driver’s licenses and argue about if they are legible.

7) Many loan officers simply prefer processing “refi” transactions.

Purchase transactions are more tedious and require much more attention to detail than refinances. Escrow must provide accurate fee structure before we disclose, and they are often under-staffed to gather this information the first day of the transaction. Home owner associations have become a mousetrap of fees and misinformation. Banks mostly refuse to get Condominium complexes back on the FHA approved list because the fines for errors are $250,000 and five years in jail. A small mortgage outfit will not take it upon themselves to make this risk. At Eagle Home Mortgage I have in house staff to gather the documentation and submit to HUD. I share the same break room with Underwriters in our same office, processing and funders.

8) Appraisal value comes in low.

With multiple offers on each property it’s tempting for sellers to choose the highest offer.  If the offer is all (or mostly) cash; it’s a good choice.

If the buyer has minimum down and a lack of capacity to make up the difference between sales price and appraised value there is nothing but to renegotiate with the seller.

Dodd-Frank legislation requires all appraisals to be conducted by an independent appraisal (arm’s length) service. Loan Officers CAN NOT speak to appraisers.

Appraisals are to REFLECT current home prices (based only on previously closed escrows) vs. LEADING home prices (based on future/anticipated close of escrows).

If the loan is FHA or VA, the appraised value is “set in stone” for at least the near future (no second appraisal is allowed).

The best way to avoid a low appraisal is for the listing agent to show up for the appraisal appointment armed with comparables in hand, and to provide those to the Loan Officer.  

Often appraisers have their own lock box key (it does speed the appraisal process) allowing appraisers to bypass the contact with agent. Listing agents do not give them access to wander in.

9) Verification of (previous) employment.

Many buyers working for large corporations must be verified thru automated systems.

If the borrower has a job change, this process will be repeated if we’re to count overtime, bonus or commission to qualify.

Some companies only verify “gross wages” in which case we need to have all the past 2 years of paystubs to count the additional income. Tax returns must not show employee expenses to match up and use the overtime, bonus and or commission.

10) Borrower leaves town, takes a vacation or thinks they are all done. The loan process is no longer simple. More paperwork is always going to be required if your deal goes past thirty days as the paperwork becomes aged/ old.

 

 

Yahoo email hacked



Green House at Santiago Canyon College, Orange California

A gardening post from sunny Orange County California. While the East Coast is suffering from storms, California is concerned with lack of water. Orange County has recieved little or no rainfall. All of our water is imported  from the Colorado River. Our President is in Fresno California today to talks about water rationing. What will happen to industry? Food fiber and fuel costs can only increase...

On presonal issues my yahoo email was hacked. I have nothing in my inbox two days running when I usually recieve 200 a day. Please call me and for heaven's sakes don't send them money I am not in the Ukraine.







Red bird decoration in palm tree

Recycled fruit bag protecting from crows

Mesh wire to protect from crows

Coral bouganvilla in California grows without care ( well just hack it back once established)

Free Money to Buy a Home in California

Jaccuzzi, stool, and Laguna Canyon view

 

DOWN PAYMENT ASSISTANCE GRANT PROGRAM   I am pleased to announce the addition of Conventional Loans to the Down Payment Assitance Platinum Program. Homebuyers can now apply for the down payment assistance grant providing up to five percent gift when qualifying for a fixed-rate 30-year Conventional Fannie Mae First Mortgage. Previously, the grant program was only available in conjunction with FHA, VA or USDA First Mortgages. With the addition of Conventional Mortgage Loan options, WE aim to serve more people and provide homebuyers with more choices.   Free money to buy a home. Call and ask me about terms and conditions that apply. C. G. Barbeau (949) 637-8190 Borrowers must qualify for the loan. Income limits apply. Available in California. Cannot own a home on your Federal Tax returns 2012 2013

Janet Yellen appeared before the House Financial Services Committee

Blue

Blue and white pots in the kitchen

 

Photographs of details in homes for sale in Laguna Beach today.
Blue willow plates- so pretty with the bead board shelves.
Blue and white is one of my all time favorite color combinations

 

I love this children's table and chairs. When I was a little girl we had a play table.  As adults when we went home all my siblings fought over sitting in the little chairs rather than normal sized ones. I don't know what happened to that white set, I think my Mom donated it when she downsized

Short Sale ? Fannie Mae Owes You Money?

FHFA Oversight of Fannie Mae’s
Remediation Plan to Refund
Contributions to Borrowers
for the Short Sale of Properties

 January 15, 2014
Federal Housing Finance Agency Office of Inspector General

 
FHFA Oversight of Fannie Mae’s Remediation Plan to Refund
Contributions to Borrowers for the Short Sale of Properties


Short sales, also known as preforeclosure sales, are a part of Fannie Mae’s foreclosure alternative strategy that can minimize the severity of losses it incurs as a result of loan defaults. In a short sale, the borrower sells the residence for less than the balance remaining on the loan and uses the proceeds to help satisfy the mortgage obligation. The proceeds received from a short sale are less than the amount of debt secured by liens against the property, which most often results in a loss to the Enterprise. In certain short sale transactions, depending on the borrower’s financial condition, the borrower may be required to make a contribution toward the short sale, which in turn reduces the Enterprise’s loss on the sale.

Through their Seller/Servicer Guides, Fannie Mae and Freddie Mac provide guidance on a large number of matters, including delinquency management and default prevention. Servicers are required to comply with the guidance through their contractual agreements with the Enterprises. The Enterprises have quality control processes that are designed to identify and address servicer noncompliance and the contracts include remedial tools, such as financial penalties. Pursuant to its delinquency management and default prevention guidance, Fannie Mae expects servicers to identify borrowers who are having difficulty making mortgage payments due to a financial hardship and offer appropriate workout options, such as a short sale. Fannie Mae also depends on its servicers to evaluate borrowers for contributions unless they are required to request approval from Fannie Mae for the contribution amount. Furthermore, Fannie Mae relies on its servicers to collect borrower contributions with the net proceeds from the short sale closing.
 
Before Fannie Mae clarified the requirements for borrower contributions, there was little guidance for servicers to follow with respect to requesting contributions and collecting them. On August 22, 2012, Fannie Mae issued Servicing Guide Announcement SVC-2012-19 that introduced new requirements to simplify and streamline the short sale process.
1 This announcement provided specific guidance for evaluating a borrower for a contribution and reminded servicers that they must not request cash contributions and/or promissory notes where applicable law prohibited borrower contributions; however, it did not state that borrower contributions were prohibited in California.

1
Servicing Guide Announcement SVC-2012-19 is entitled, "Standard Short Sale/HAFA II and Deed-in-Lieu of Foreclosure Requirements."

2
This law, Section 580e of the California Code of Civil Procedure, provides that a deficiency judgment shall not be rendered for any note secured by a first lien where the property is sold for less than the amount of the indebtedness with the written consent of the mortgagee, if certain conditions are satisfied. CAL. CIV. PROC. § 580e(a)(1).

3
Section 610.02.01 of Fannie Mae’s 2012 Servicing Guide prohibits borrower contributions for HAFA short sales. The guide states that "Cash contributions or promissory notes are not permitted under HAFA; therefore, if a servicer or mortgage insurer determines that a borrower has an ability to contribute meaningfully to reducing the potential loss on the mortgage loan, the borrower is not eligible for HAFA and may only obtain a preforeclosure sale or deed-in-lieu under the requirements of other Fannie Mae preforeclosure sale or deed-in-lieu alternatives." See Fannie Mae Single Family 2012 Servicing Guide Part VII, § 610.02.01.

4 The SAI establishes consistent policies and processes for the servicing of delinquent loans owned or guaranteed by Fannie Mae and Freddie Mac (the Enterprises).


Although Fannie Mae issued guidance to its servicers informing them of the requirements for evaluating borrower contributions, Fannie Mae and its servicers did not always have the option to collect them. On September 30, 2010, the state of California enacted a law which went into effect on January 1, 2011, that prohibited a deficiency judgment for any note where the property sold for less than the indebtedness.
2 According to Fannie Mae, the language of this new law was unclear and did not expressly prohibit borrower contributions in short sale transactions.

On July 11, 2011, the state of California amended Section 580e on an emergency basis to provide clarity in connection with borrower contributions on short sale transactions. The amendment, which went into effect four days later on July 15, clarified the law to include an express prohibition against any type of borrower contribution in connection with a short sale. Specifically, Section 580e subsection (b) forbids "A holder of a note" from requiring the borrower "to pay any additional compensation, aside from the proceeds of the sale, in exchange for the written consent to the sale."

Fannie Mae and its servicers were also prohibited from collecting contributions for short sales completed through Fannie Mae’s Home Affordable Foreclosure Alternatives (HAFA) Program that went into effect on August 1, 2010.
3 Fannie Mae’s HAFA Program was discontinued with the implementation of the Standard Short Sale Program on November 1, 2012, which was created as part of FHFA’s Servicing Alignment Initiative (SAI).4 Federal Housing Finance Agency Office of Inspector General •AUD-2014-004 •January 15, 2014 3

Finding: FHFA Should Oversee Fannie Mae’s Remediation Plan to Refund Contributions to Borrowers for the Short Sale of Properties


Through its review of closed short sale transactions in a recently completed audit on short sale borrower eligibility,
5 OIG found that Fannie Mae and its servicers may have improperly collected borrower contributions for short sales of properties on two fronts—in the state of California and under the HAFA Program, which was available in all states. The collection of these borrower contributions prompted Fannie Mae to initiate a remediation plan to return up to $3,173,249 to borrowers who may have been impacted from the short sale of properties located in California and up to $53,000 for HAFA short sales.

5
See OIG, Fannie Mae’s Controls Over Short Sale Eligibility Determinations Should be Strengthened, AUD-2014-003 (November 20, 2013), available at http://www.fhfaoig.gov/Content/Files/AUD-2014-003.pdf.

As of July 15, 2011, the state of California expressly prohibited the holder of a note from requiring the borrower to pay any additional compensation in exchange for the written consent to a sale other than the sale’s proceeds. This would include the collection of borrower contributions as a condition of a short sale. Nonetheless, based on a review of short sale data provided by Fannie Mae, it appeared that Fannie Mae’s servicers collected borrower contributions for 124 short sales completed during 2012 that would be contrary to the amended California law. Upon identifying this issue, OIG followed up with Fannie Mae to identify all short sales of California properties where borrower contributions were collected since the law became effective on January 1, 2011.

As reflected in Figure 1, Fannie Mae provided the OIG with data showing that 1,222 borrower contributions may have been improperly collected for the short sale of California properties closed between January 1, 2011 and June 30, 2013. The contributions were either cash or promissory notes executed by borrowers to pay the contribution over time. However, Fannie Mae has advised that there are significant data accuracy issues and has identified a number of short sales where the data reported to Fannie Mae by its servicers erroneously reflects the collection of a borrower contribution. Therefore, the total number and amount of borrower contributions improperly collected may be substantially less than the data supplied by Fannie Mae.
Federal Housing Finance Agency Office of Inspector General •AUD-2014-004 •January 15, 2014 4

FIGURE 1. Borrower Contributions for California Short Sales Contribution Type	No. of Contributions	Total Amount Collected
Cash – Delegated 6	900	$1,903,880
Cash – Non-delegated	288	$897,311
Promissory Note 7	34	$372,058
Total Contributions for Properties Located in California	1,222	$3,173,249

painting by Caroline Gerardo   "Underwater Homes"

Succulents floating on driftwood

Taper ?

Open Bedroom with corrugated plastic roof and open sides 

 

Orange County doesn't seem to be back in the money, yet. The photograph above of a shed conversion of what I would call less than half an extra bedroom. It's a room open to the garden on two sides.

 

There are 86 commercial listings in Laguna Beach, and residential listings also have increased but with high and unrealistic prices.

 

The January 2014 Jobs Report also didn't ring any bells. Employers added just 113,000 new workers. This was well below expectations of 175,000 new jobs.  The number of job creations for December was raised a sorry 1,000, bringing December's total to 75,000. November was revised higher to 274,000. Jobs are the most important driver of our economy.

 The Unemployment Rate did fall to 6.6 percent, from 6.7 percent. However, this is not necessarily a good metric of labor market health, as the more important Labor Force Participation Rate (LFPR) remains at 63 percent, a 35-year low. The LFPR measures the proportion of working-age Americans who have a job or are looking for one, and it should be moving higher in a recovery.

Also of note, productivity in the fourth quarter of 2013 rose by 3.2 percent, with both the third and fourth quarters the highest since the second half of 2009. Employers are squeezing more out of current workers and may not be on the hunt for new employees given the economic landscape, which is another negative for the labor market.

CoreLogic w(hose corporate office is the view from my office in Irvine) reports that home prices, including distressed sales, rose by 11 percent in December 2013 compared to December 2012. December marked the 22nd consecutive year-over-year gain in home prices nationally. However, from November to December, prices fell by 0.1 percent.

It seems in pocket areas such as Newport Coast, Irvine and Laguna Beach prices increased almost seventeen percent - this may be too fast. The market now sees softening in those hot residential home  sale areas

What does this mean for home loan rates?

 

Rates are down a little!

 

 Mortgage Bonds and home loan rates have seen some improvement of late, due to some weak economic reports, and a shake down from news in China.

 

If economic reports continue to be weak, will the Fed continue to taper its Bond purchases? Taper too fast and we will end up with no one buying homes.

 

The Fed is still purchasing $35 billion in Treasuries and $30 billion in Mortgage Bonds (the type of Bonds on which home loan rates are based) to help stimulate the economy and housing market. This figure is down from the $85 billion in Bonds and Treasuries the Fed had been purchasing last year. The timing of further tapering is sure to impact Stocks, Bonds and home loan rates throughout the year, and it is a key story to monitor.

 

A few secondary market mortgage sources have come back looking to make money. Will the old easy qualifier and low documentation deal be back?

Now remains a great time to consider a home purchase or refinance. Hopefully you can afford the whole house!