Contrary to popular belief, the mortgage program’s housing options are not for tiny, rundown farmhouses. “The USDA program accounted for 40%-50% of sales in October and November for Scottsdale, Ariz.-based home builder Meritage Homes,” the company’s VP of Sales John Bargnesi said in a Wall Street Journal article in 2008. The USDA’s eligible properties include single-family homes, condominiums and brand new manufactured homes. In other words, qualified buyers don’t have to settle; they can get a dream home.

USDA LOAN BENEFITS AND ELIGIBILITY

The loan offers cheap closing costs, a low (.03%) monthly insurance fee and modest interest rates. It is one of the last $0 down mortgage programs.

Prospective buyers must meet certain criteria, however. First, they can’t have an income that exceeds 115% of the median income for the location of the home.

In terms of housing, the loan covers newer and older homes. Funds can also apply to homes needing repairs or improvement. Condominiums must be older, while manufactured homes must be newly built. The funds can also pay off legal fees, closing costs and title services. Buyers with an existing Guaranteed Rural Housing loan can refinance.

Applicants need a credit score above 640 to qualify. Although, a USDA lender might be willing to work with a lower score as long as the buyer can prove his ability to meet the financial obligation of the loan. According to the USDA, if one’s credit is below 640, the applicant cannot have a:

• Foreclosure in the past three years.
• Discharged bankruptcy within three years months.
• 30-day late bills within the past year.
• Accounts in collections within past year.
• Tax liens or delinquent government debts such as student loans.
• Outstanding collection accounts.
• Two or more late rent payments in the past year.

Families interested in a USDA eligible property may contact Luxe Real Estate Group agents or USDA loan experts about the loan and relocating to a rural or suburban area.

Jasmine Reese writes content about USDA home loans and rural living for USDA Loans.com, a company devoted to the development of rural and suburban areas.

Current homeowners who purchased their homes several years ago when prices were high and interest rates were elevated may be paying more for their homes than they are worth. Many may be feeling the strain of financial hardship and are wondering how they might be able to save money each month. One of the best places to look to save money on your home is your mortgage. If you are paying an interest rate that is higher than the industry standard, you may be eligible for a streamline refinance. A streamline refinance is a home loan refinance where the process has been expedited and requires no additional paperwork and often no home appraisal or other administrative hassles. Additionally, there are no out of pocket expenses, and all closing and administrative fees and costs are rolled into the sum of your mortgage, which makes it easy for you to pay them off little by little, one month at a time. No up-front costs mean more money in your pocket and you start saving immediately.

With all of the benefits of a streamline refinance, why wouldn’t you apply and see how much you can start saving on your home loan? Most homeowners will end up saving thousands of dollars throughout the life of their loan, money that can be saved or used elsewhere. Take advantage of the historically low interest rates and save yourself money on your home mortgage.

Guest post by Jessica Gingham at www.streamlinerefinance.net

It is truly a buyers’ market trumping the last eight years.  First-time buyers have the opportunity to buy Scottsdale real estate on scenic golf courses and homes in other neighborhoods that were previously out of reach.  Alternately, they may desire to purchase larger Scottsdale AZ homes in medium-priced neighborhoods, homes with more space such as an extra bedroom or office or garage.

Families looking for real estate in Scottsdale are also highly motivated by great prices for homes and loans.  With reduced sales prices, flexible sellers, and increased inventory, now is the time to buy.  Interest rates are still quite low and FHA loan products are enticing.  In February, the FHA Loan Limits in Maricopa County (Scottsdale, Phoenix and Mesa) increased to $346,250.  FHA conforming loan limits are $417,000.

Buyers with steady employment and reasonable credit scores can buy a home with as little as 3-percent down payment through the FHA.  In addition, the FHA opened up bridge vehicles that enable first-time buyers to borrow from tax-credit monies for down payments.  The tax credit also applies to purchasers who use revenue bond financing.

All principal residences are eligible.  That includes single-family homes, condominiums, townhouses, co-ops, and houseboats, which we do not see much of in the desert.

A tax credit is not a tax deduction. It is a dollar-for-dollar reduction in taxes.  If the homebuyers do not owe taxes, they will receive a refund after filing 2009 taxes.  Unlike other recent incentives, homebuyers who buy between January 1 and December 1, 2009 do not pay back this money unless they sell the qualifying homes within three years.

The tax credit starts phasing out for homebuyers with modified gross incomes above $75,000 ($150,000 joint), according to a formula.  Please consult your tax advisor for specific information.

For more information about the estate homes and luxury real estate in the area, contact the LUXE Real Estate Group at 1-888-900-LUXE.

Investors in trust property in Scottsdale or Arizona real estate need to find out how this ruling affects their situations, if at all, with regards to plans for foreclosures and short sales.  We strongly advise consultation with qualified tax professionals before deciding to do a short sale or foreclosure.  There are possible derogatory tax consequences resulting from Arizona  foreclosures, shorts sales, and loan modifications.

The current Arizona anti-deficiency rule keeps lenders from seeking a deficiency, or suing directly on the note, following a foreclosure or short sale of investment real estate in Arizona that meets certain criteria.  It is advisable for real estate investors to seek professional help analyzing each foreclosure or short sale to determine their rights and obligations.  The lender’s remedies under the Promissory Note and other loan documents spell out the terms.

Designed to limit the type of borrowers that will qualify for anti-deficiency treatment, the new Arizona law changes the criteria.   Criteria under the current laws are simple:  the anti-deficiency rules apply only if the foreclosed property is under 2 ½ acres and utilized as a single one-family or single two-family dwelling.

The current law goes something like this:  In Arizona, if a borrower fails to pay its loan, a lender can foreclose its Deed of Trust lien either judicially per A.R.S. 33-721 et. seq., or non-judicially by conducting a trustee’s sale per A.R.S. 33-801 et. seq.  If the foreclosure price does not pay a lender what it is owed, the lender may generally seek a deficiency against the borrower for the difference.  Arizona has anti-deficiency laws that bar a lender from seeking a deficiency in certain situations.  In both judicial foreclosures and trustee’s sales, anti-deficiency rules apply only if the property being foreclosed meets the criteria.

However, after September 29, 2009, there are additional criteria:  The trustor must have lived in the property for at least six consecutive months and must have a Certificate of Occupancy.  Investment properties sold at a trustee’s sale will not qualify for anti-deficiency treatment if the trustor has not lived in the property for the six consecutive months.  There are more details in the fine print.  Be aware.

For more information about the estate homes and luxury real estate in the area, contact the LUXE Real Estate Group at 1-888-900-LUXE.

HERA stands for the Housing and Economic Recovery Act.  It assists borrowers by mandating full transparency.  The new rules encourage consistent lending practices among Scottsdale lenders and include controls to prevent deceptive and abusive lending practices.  Hoping to promote fair regulation of the Arizona real estate industry, all parties should benefit from the regulations.

All mortgage lenders and mortgage brokers in Scottsdale must comply with the regulation requirements.  One of them has to do with Truth in Lending (TIL).  Truth in Lending is a form mandated by federal law that specifies information that must be provided to borrowers on different types of loans.

The idea is that lenders provide one uniform set of price disclosures that are consistent from loan to loan and from lender to lender.  In theory, this would enable Scottsdale home buyers  to make apples-to-apples price comparisons across loan types and across lenders.

Mortgage companies in Arizona are looking positively about several changes heralded by HERA.

1. Saturdays will be counted as business days for all disclosure wait periods.
2. With the exception of the credit-report fee, upfront fees cannot be charged until the borrower receives the initial TIL from the lender.
3. Initial TIL is required on purchases and refinancing of primary residences and second homes and not for investment properties.
4. Initial TIL must be provided at least seven business days before the closing and signing date.
5. If the APR in increased by more than .125 percent, at least three business days before closing the TIL must be revised and reissued to the Scottsdale home buyer.

The appraisal cannot be requested until the Arizona home buyer  receives the initial TIL from the lender.  Lenders may not collect the appraisal fee until four business days after the lender issues the initial disclosure packet.  A copy of the appraisal must be provided to the borrower, although they may eliminate the three-business-day wait period by waiving their right to review it.

In today’s real estate market, escrows no longer close in 30 days.  Loans are more difficult to close and when all goes well, they take about 40-45 days.

For more information about the estate homes and luxury real estate in the area, contact the LUXE Real Estate Group at 1-888-900-LUXE.

Sellers of Greater Phoenix real estate are at the mercy of their lenders during the negotiations for short sales.  Caught in difficult situations, they are usually behind on house payments with no end of challenges in sight.  Distressed sellers need to remain humbly aware that for short sales to work, the lenders must agree to accept a loss of funds.  Consequently, sellers who want to be successful in their proposals to do short sales had better follow their lenders’ guidelines to the T.

The first step to a short sale is calling the lender.  It is important to speak with the person capable of making decisions about short sales.  Sellers should be aware that requirements for short sales vary from lender to lender.

Listed below are some commonly requested documents:

• Letter of Authorization sent to the lender allows the lender to communicate with the real estate agent, lawyer, and the title company.  It should include the property address, loan reference number, seller’s name, date, and name and contact information for real estate agent.
• Closing sheet, prepared by closing agent or lawyer, to illustrate estimated sales figures.
• Hardship letter to explain circumstances and causes of financial problems.
• Proof of Income & Assets document that discloses resources, assets, and accounts.
• Comparative Market Analysis (CMA) prepared by your real-estate agent to describe market and property value declines that are affecting sale of the property.
• Purchasing Agreement
• Listing Agreement
• Copies of bank statements and an accounting for each deposit along with evidence assuring continuing deposits.

It is highly recommended for sellers to confer with professionals such as real estate agents, real estate lawyers, and CPAs before proceeding with short sales.  Some states allow lenders to pursue borrowers for the difference between the amount owned and the amount paid.  In some instances, the shorted amount is taxable income.  Unforeseen details dampen the short-sale transactions.

Most states require credit reporting by lenders.  However, sellers may ask lenders not to report the short sale.  Occasionally, lenders will oblige but normally a short sale registers on the FICO score the same as a foreclosure.

For more information about luxury real estate in the area, contact LUXE Real Estate Group at 1-888-900-LUXE.

Lending guidelines have definitely become more strict, but there is hope for buyers. Now, more than ever, it is vitally important to work with an experienced lender/mortgage broker. If you are ready to buy and would like to get approved for a home loan, contact a Luxe real estate professional today and we will connect you to a top notch lender and then we’ll help you find your dream home!