RISMEDIA, July 1, 2010–FHA Pros, LLC, a national FHA condo approval service, has developed a list of facts speaking to the top misconceptions associated with FHA loans in order to help home buyers better navigate an already confusing market. FHA loans are mortgages issued by qualified lenders and insured by the Federal Housing Administration (FHA).

“We have seen home buyer interest in FHA loans go from practically zero three years ago to upwards of 87 percent today,” said Christopher Gardner, founder and president of FHA Pros, LLC. “Despite this rapid rise in popularity, many buyers still do not fully understand the benefits of these loans, and we believe it’s time to change that.”

1. FHA Loans Are Not Only For Lower-Income Borrowers. FHA loans are available to everyone. In fact, even Bill Gates can get one. There is no maximum income restriction associated with FHA loans. Borrowers do need to substantiate income and assets by submitting proper documentation. This requirement ensures that borrowers are well-vetted and truly able to afford their future homes.

2. FHA Loans Are Not Only For First-Time Buyers. Many people believe FHA loans are available only to first-time homebuyers. This is not the case. Whether borrowers are making their first home purchase or their fifth, they can look to FHA loans as a home financing option.

3. FHA Loans Are Not Just Small Loans; In Fact, Loan Amounts Can Be As High As Almost $800,000. The government recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market. The amount a buyer can borrow varies from county to county. Later this summer, condo buyers interested in FHA loans can visit www.checkfhaapproval.com to instantly identify FHA-approved condo associations and review maximum loan amounts for a given location.

4. FHA Loans Are Not Affiliated With The Section 8 Housing Program. While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing. FHA loans are simply mortgages insured by FHA. This insurance provided by the federal government allows lenders to lend more freely by assuring them that they will be repaid in the event of default. Most traditional lenders, including Wells Fargo & Co., JP Morgan Chase and Citigroup are able to provide FHA loans to their customers.

5. FHA Loans Are Often More Affordable Than Conventional Loans. While FHA loans typically offer the same interest rates as other loans, borrowers benefit from a much lower down payment of as low as 3.5 percent.

6. FHA-Approved Condo Developments Are More Desirable To Buyers. With 87 percent of home buyers indicating that they plan to use FHA loans, condo associations that are not FHA approved are missing out on a significant pool of prospective buyers. Under rules in place since February 2010, an entire condominium development must now apply to HUD and be granted FHA approval before a buyer can purchase a unit in an association with an FHA loan or before an existing unit owner can refinance into an FHA loan.

Due to the general unwillingness of today’s lenders to extend credit with respect to conventional loans, many borrowers find that FHA is their best bet. Lenders don’t mind lending when the federal government (FHA) assures them of repayment.

Homeowners associations (HOAs) should note that although FHA-insured mortgages might be easier to obtain, they are not “risky” loans, due in large part to the strict “full documentation” requirements placed on borrowers.

Individual buyers or sellers can initiate the approval process or current owners can encourage their HOA to apply. More information about the FHA- approval process is available at www.getfhaapproval.com.

7. FHA Loans Are Assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable. This means that when a seller with an FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable in times of rising interest rates.

“Now, more than ever, buyers and sellers need to understand the options available to them when it comes time to buy a home,” continued Gardner. “At FHA Pros we have worked with countless HOAs, attorneys and individuals to easily and efficiently navigate the historically tricky FHA-approval process.”

The final day to qualify for the first time home buyer tax credit is fast approaching. If you are purchasing a home and want to qualify for the credit you must close escrow by November 30th 2009, assuming the credit expires as planned.

Just to clarify, you don’t actually have to be a ‘first time home buyer’ to qualify. If you haven’t owned a home for the past 3 years, you can still claim the credit. So, if you are in contract to buy a home, you want to be sure your lender and REALTOR® are aware that you need to complete your purchase by the deadline.

According to Inman News, “Real estate industry trade groups are mounting a final push for an extension of the first-time homebuyer tax credit, with Sen. Johnny Isakson planning to tie the issue to an extension of unemployment benefits.”

You may have notice recently that some trains are making their way through Brentwood and Oakley again. Several times in the past weeks I’ve had to wait for freight trains to pass by while waiting at the RR crossing at Balfour and Brentwood Blvd.

What were seemingly inactive tracks are indeed being used, and there will be more trains coming down the line in the near future.

Click on the map to zoom in on your neighborhood

This map shows the tracks running from the top left to the bottom right.

The following email excerpt is dated a month ago (forwarded to me by my office manager), and is directly from Union Pacific Railroad regarding the RR Tracks that run through Oakley and Brentwood.

Sent: Friday, July 24, 2009 11:05:21 AM

Subject: Re: East Contra Costa Plan

The tracks located in Brentwood, CA is called the Tracy Branch/Mococo Line.

IT IS AN ACTIVE RAIL LINE.

I have notified both Mayor Bob Taylor and City Manager Landeros the line will be restored to service in the future. Given the state of the economy we do not have an explicit time frame, but it will likely happen in the next few years.

Wesley J. Lujan
Director, Public Affairs
Union Pacific Railroad
915 L Street, Suite 1180
Sacramento, CA 95814
916.789.5957 office
916.792.9160 cell
402.997.3540 fax

I guess he wasn’t kidding, the Choo Choo’s are coming once again.

Here’s a video from CNBC talking about the looming flood of foreclosures.

While it is unclear how many of these foreclosures may be local to Brentwood, Oakley, Antioch and Discovery Bay, you can be sure we will have our share.

If you are still thinking about purchasing a home or an investment property, now is the time to get ready. All indications show that current home prices are running flat, but if the “flood” comes, prices may drop even more.