It’s official folks, the bottom of the market is all around us.  First time home buyers and investors pour into the market as home prices continue to plummet.

Here is an article that appeared in the OC Register on November 18th, 2008:

“Bargain-basement sales helped pull down home prices in the SoCal region last month and boosted the number of transactions by a record 67%, DataQuick reported today.

The median price of a Southern California home fell to $300,000 in October — the lowest since April 2003 and down 41% below the peak price hit in the spring and summer of 2007.

The record gain in sales was attributable to very weak sales last year and high foreclosures this year. Since sales fell to record lows a year ago — remember the twin meltdowns in the mortgage market last year? — October’s gain was a percentage record. But at 21,532 transactions, the total still was 12% below average, DataQuick reported.

Record foreclosures also boosted sales while pulling down prices. DataQuick’s figures show that half of October’s sales were recently foreclosed homes. In Orange and Los Angeles counties, foreclosed homes accounted for four out of 10 sales. Lower-priced neighborhoods, where foreclosures predominate, made up the lion’s share of last month’s sales figures.

For example, a third of all SoCal sales last month occurred in the Inland Empire, where foreclosures accounted for two out of every three transactions. The median home price in those counties dropped below $230,000 last month, or almost half of the median sale price at the market peak.”

Once again, It is my contention that this is the bottom of the market for most areas in the State of California.  Credit continues to be available for first time home buyers and there is no better time than now to take advantage of this market.

If you would like more information about foreclosed homes in your area and low to no down payment loan options available to you, either give us a call at 1-866-667-6724 or complete this simple on-line form for more information

Every day seems to bring new challenges for new home buyers looking to purchase homes in the State of California.  As home prices drop to seemingly jaw dropping levels California Teachers and Public Employees are making up a large percentage of first time home buyers entering this market.

If you do not belong to special organization like CalSTRS or CalPERS there are still programs available to purchase with little or no money down, but not nearly the options available to members of these organizations.

CalSTRS made a startling announcement earlier this week that it have successfully defended an important underwriting guideline with Fannie Mae that has resulted in many more California Teachers and Employees being able to qualify for the 80/17 loan program.

There is no program available anywhere in the State or Country that has the benefits of this loan program.  No mortgage insurance, low interest rates, low fees, deferred payments on down payment for 5 years - Inquire here for more information on this program.

CalHFA still offers great programs to first time home buyers, and specifically to Teachers working in high priority (title 1) schools in the State of California.  The Extra Credit Teacher program provides a 3% silent second mortgage with no payments due for the life of the first loan.  Teachers that qualify for this loan program may have to come in with as much as 2% down payment, but as little as nothing down with the use of other down payment assistance programs available through CalHFA and it’s affiliate DPA program.  Inquire here for more information on this program.

CalPERS offers a loan program that allows you to borrow up to 95% loan to value plus take a personal loan of up to $18,000 or half of your CalPERS value to cover the additional 5%.  The result is that you can borrow up to 100% of the purchase price.  Inquire here for more information on this program.

For more information on any of these programs feel free to call us at 866-667-6724 or Inquire here for more information.  To find out if you qualify for a low or no down payment home loan you can also complete this simple, online loan application and get approved today!

When I first wrote about H.R. 6694 it was after I wrote to my representatives through the Nehemiah and the DPAgroundSwell.org website in support of the bill - Received this email today from Dianne Feinstein.  I have to say that I at least appreciate the attempt to personally address me and speak specifically to the subject of my original contact which was Seller Paid DPA.

Take Action Now - Use this easy tool to email your representatives and tell them that you want to save Nehemiah!

Dear Mr. Schang:

I am writing in response to your letter regarding down payment assistance programs. Thank you for taking the time to write, and I welcome this opportunity to respond to your concerns.

On July 30, 2008, President Bush signed into law the Housing and Economic Recovery Act. This legislation, which provides critical relief for American homeowners facing foreclosure, also contains a provision prohibiting Federal Housing Administration (FHA) program participants from using down payment assistance programs in which the seller financially benefits from the transaction.

The U.S. Department of Housing and Urban Development (HUD) Inspector General, the Government Accountability Office, and the Internal Revenue Service have cited serious problems with some seller-funded down payment assistance programs that have lead to substantial losses for FHA. The agency had $4.6 billion in unanticipated long-term losses in its annual re-estimate this year, primarily as a result of the increased amount of seller-funded loans in its portfolio. Foreclosure rates for seller-funded down payment assistance loans have been found to be three times higher than other FHA loans.

You may be interested to know that on July 31, 2008, Representative Al Green (D-TX) introduced the “FHA Seller-Financed Down Payment Reform and Risk-Based Pricing Authorization Act of 2008″ (H.R. 6694). The bill would reinstate FHA seller-funded down payment assistance for individuals with certain credit scores. Currently, H.R. 6694 is pending consideration in the House Committee on Financial Services and a Senate companion bill has not been introduced. Given the major concerns of the Senate Banking, Housing, and Urban Affairs Committee with seller-funded down payment assistance programs, it is uncertain if similar legislation will be considered in the Senate. Please know that I will keep your views in mind should the Senate consider this legislation.

Again, thank you for your letter. If I can be of further assistance, please contact my Washington, DC office at (202) 224-3841. Best regards.

Sincerely yours,

Dianne Feinstein
United States Senator

Further information about my position on issues of concern to California and the Nation are available at my website http://feinstein.senate.gov/public/. You can also receive electronic e-mail updates by subscribing to my e-mail list at http://feinstein.senate.gov/public/index.cfm?FuseAction=ENewsletterSignup.Signup.

Program Overview

The Teacher Next Door Loan Program provides Downpayment Assistance loans to credentialed Teachers employed by the San Francisco Unified School District. The loans are forgivable according to the years of service the teacher remains in the school district.

Borrower Eligibility:

To be eligible for a TND loan, a borrower must be a credentialed teacher currently employed by the San Francisco Unified School District, and have a combined household income of no more than 200% of the AMI of SFMA.

First-time homebuyer: The TND loan is for the purchase of the teacher’s first property in San Francisco. The property must serve as the teacher’s principal residence (be owner occupied).

Homebuyer Education Requirement: Borrower will be required to complete a first-time homebuyer education course through one of MOH’s 5 approved housing counseling agencies. A certificate of completion of homebuyer education must be included with the application package.

First Mortgage: All City loan approvals are made in conjunction with a first loan commitment from a bank or mortgage lender.  The loan can be fixed or adjustable interest rate loans. The mortgage payment should include principal and interest, as long as it does not have interest only, option ARM, balloon or negative amortization payment options.

Debt-to-Income Ratio: Applicants monthly housing debt, including property taxes, property insurance, and if applicable mortgage insurance and homeowner’s association dues cannot be less than 38% of the household’s gross income. The ratio of monthly housing costs, plus all other household monthly debt (including credit cards, car payments, etc.) should not exceed 45% of the household’s gross income.

First time homebuyer counseling is required for all City Downpayment Assistance Loans

Property Eligibility

Properties purchased with TND funds must be single-family residences units in the City of San Francisco, which include: detached single-family house, condominiums and townhouses.

Maximum Loan Amount

The loan amount available for TND loans is $20,000.

Loan Terms:

The maximum loan amount under the TND program is $20,000. The loan may be used for either closing costs or downpayment. There is no interest, nor shared appreciation. TND loans may be layered with DALP,  City Second loans, and used for the purchase of BMRs and Condo Conversion units, if the teacher also meets the income eligibility criteria for those programs. If the teacher moves out of the City and County of San Francisco or leaves the San Francisco Unified School District within 5 years of the date the loan is issued, the loan must be paid back in full. After year five, the loan is forgiven at a rate of 20% per year, and at the end of the 10^th year, the loan is forgiven in its entirety. The following chart illustrates repayments for TND loans:

If the property is sold or the teacher leaves the SFUSD, then the following is due back to the City:

1. Refinance/Subordination – The City loan can be subordinated to refinance the existing first mortgage for a lower interest rate and better loan terms as long as no cash equity is taken out of the property. All refinances must meet MOH’s subordination requirements and be approved by MOH.

Owner Occupancy Requirement

· The borrower must occupy the purchased property as the primary residence within 60 days after close of escrow.

· Properties that have received City funding must remain owner occupied throughout the term of the loan. Compliance monitoring will be performed and documented proof of occupancy required at intervals determined by the Mayor’s Office of Housing.

To get more information about this Program

• Request More Information
• Apply NOW! - Get Pre-Approved
• Find a Local Realtor
• Call Toll Free:  866-667-6724

In such a volatile market as we’re in right now, on a day when conventional interest rates went up .125%, The California Housing Finance Agency in an unprecedented announcement reduced interest rates across the board.

Rate Reductions are as follows:

30 Year Fixed

• Moderate Income Areas Reduced .125% to 6.75%
• Low Income Areas Reduced .25% to 6.5%

35 Year interest only PLUS

• Loan Amounts of $450,000 or Less Reduced .125% to 7%
• Loan Amounts in excess of $450,000 Reduced .25% to 7.375%

40 Year Fixed Mortgage

• Reduced .125% to 7%

Extra Credit Teacher Program

• Reduced .25% to 6.25%
• ECTP Down Payment Assitance - 5.25% (interest waived after 3 years)

With the CalHFA Community Stabilization Home Loan Program standing at 5.5% for a 30 Year fixed rate with ZERO down payment required (100% One loan financing with reduced mortgage insurance), CalHFA remains as one of the few remaining reliable and always available first time home buyer programs that allow over 90% loan to value.

Depending on your qualification, CalHFA has loan programs that allow for 0%, 1% & 2% down payment making this a very realistic alternative to the 3.5% down payment requirement (as of October 1st)

For additional information about these CalHFA loan programs feel free to contact me at Scott@myporchlight.com or you may call me on my cell phone anytime at 714-336-8286.

The major mortgage insurance companies announced on Friday, August 8th, 2008 that they will no longer offer mortgage insurance on any loans that exceed a total of 90% loan to value in California, Arizona, Nevada and Florida.

The only options left for “low down payment” purchase loans in California are FHA, CalHFA Extra Credit Teacher Program and the CalSTRS 80/17 home purchase loan.

It’s really a no brainer once you compare these loans side by side:

CalSTRS compared to CalHFA

• You do not have to be a first time home buyer with CalSTRS
• There are no income limits with CalSTRS
• CalHFA currently has an interest of 6.25%, CalSTRS 6.625%
• CalSTRS does not require Mortgage Insurance - CalHFA does

CalSTRS compared to FHA

• No mortgage insurance with a CalSTRS loan
• No upfront PMI with CalSTRS
• Both require only 3% down payment

This, in my opinion continues to be the best loan option available…PERIOD.

Did you know that the only requirement is that you have a pay stub from a Calfornia Public School or Community College?  You do not even have to be a member of CalSTRS.

I am holding California Teacher Home Buying Workshops for any schools or organizations in California.  I will be in San Deigo next week.  If you would like to hold a workshop at your school or other forum, feel free to contact me for details.

You may reach me on my cell phone at 714-336-8286 or email me at Scott@MyPorchLight.com

The Extra Credit Teacher Program provides for a 3% loan that can be used for down payment assistance for California Teachers that work in high priority schools.  The interest on this loan is waived after 3 years of working in a high priority school.  There are no payments due on this loan until you either refinance, sell, or pay off the first mortgage.

A high priority school is one that is defined as having an Academic Performance Index (API) ranking of 5 or below.  To find out if your school qualifies for this program - Search API Ranking Here

Who Qualifies for the CalHFA Extra Credit Teacher Program

For Teachers: (Credential held must be either a Preliminary or  Full Credential.  Intern Credentials and Emergency Permits are not eligible under the program.)

• Single Subject Teaching Credential
• Multiple Subject Teaching Credential
• Specialist Instruction Credential in Special Education
• Education Specialist Instruction Credential
• Standard Elementary Teaching Credential
• Standard Secondary Teaching Credential
• Standard Early Childhood Education Teaching Credential
• Standard Restricted Special Education Teaching Credential
• General Kindergarten-Primary Teaching Credential
• General Elementary Teaching Credential
• General Junior High Teaching Credential
• General Secondary Teaching Credential
• Special Secondary Teaching Credential in Art
• Special Credential for Teaching Exceptional Children
• Special Secondary Teaching Credential in Business Ed
• Special Secondary Credential for Teaching the Blind
• Special Secondary Teaching Credential in Homemaking
• Special Secondary Teaching Credential in Industrial Arts
• Special Secondary Credential for Teaching Lip Reading
• Special Secondary Teaching Credential in Music
• Special Secondary Limited Teaching Credential in Music
• Special Secondary Teaching Credential Limited in Agriculture
• Special Secondary Credential for Teaching the Partially Sighted Child
• Special Secondary Teaching Credential in Physical Education
• Special Secondary Speech Arts
• Special Secondary Teaching Credential in Correction of Speech Defects
• Special Secondary Credential for Teaching the Mentally Retarded

For Administrators :

• Administrative Services Credential
• General Secondary School Administration Credential
• Administrative Services Credential (Examination)
• General Secondary School Supervision Credential
• Standard Supervision Credential
• General Administration Credential
• Standard Administration Credential
• General Supervision Credential
• General Elementary School Administration Credential
• The Supervision Credential
• General Elementary School Supervision Credential
• General School Principal or Supervisor Credential

For Staff Members:

• School Nurse Credential
• Clinical or Rehabilitation Service Credential
• Pupil Personnel Services Credential - (e.g. School Counseling, School Social Work, School Psychology and Child Welfare and Attendance)
• Library Media Teacher Service Credential
• Designated Subjects Vocational Education Teaching Credential

There may be other qualifications, please feel free to Get More Info here or call us at 866-667-6724.

H.R. 3221 Housing and Economic Recovery Act of 2008, aka Foreclosure Prevention Act, is scheduled to be signed by President Bush on Monday, July 28th and is projected to save over 400,000 American homeowners from foreclosure.

Nestled deep in this 700 page bill, located on 479-481 you will find the end date of October 1st, 2008 for the use of down payment charity gifts from currently allowed charities Nehemiah, Ameridream, HART and a small handful of other allowed charities.

Excerpt from Nehemiah Web Site:

SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF SELLER-FUNDED DOWN PAYMENT ASSISTANCE.

Paragraph (9) of section 203(b) of the National Housing Act (12 U.S.C. 1709(b)(9)) is amended to read as follows:

(i) such lien shall be subordinate to the mortgage; and

(ii) the sum of the principal obligation of the mortgage and the obligation secured by such lien may not exceed 100 percent of the appraised value of the property plus any initial service charges, appraisal, inspection, and other fees in connection with the mortgage

(i) The seller or any other person or entity that financially benefits from the transaction.

described in clause (i). This subparagraph shall apply only to mortgages for which the mortgagee has
issued credit approval for the borrower on or after October 1, 2008.’’

• (ii) Any third party or entity that is reimbursed, directly or indirectly, by any of the parties
  (9) CASH INVESTMENT REQUIREMENT-

  (A) IN GENERAL - mortgage insured under this section shall be executed by a mortgagor who shall have
  paid, in cash or its equivalent, on account of the property an amount equal to not less than 3.5 percent of
  the appraised value of the property or such larger amount as the Secretary may determine.

  (B) FAMILY MEMBERS - For purposes of this paragraph, the Secretary shall consider as cash or its equivalent
  any amounts borrowed from a family member (as such term is defined in section 201), subject only to the
  requirements that, in any case in which the repayment of such borrowed amounts is secured by a lien against
  the property, that –

  (C) PROHIBITED SOURCES.—In no case shall the funds required by subparagraph (A) consist, in whole or in
  part, of funds provided by any of the following parties before, during, or after closing of the property sale:

A valid argument is that there are other factors that many feel FHA is not revealing and that is the starting credit quality of those loans that experienced a higher rate of default. If FHA would simply follow suit with the rest of the credit markets and raise the bar slightly on thier qualifying guidelines we may not be a need to eliminate these programs…but this does not seem to even be a consideration for FHA.

In the upcoming years housing prices in America will reach an even higher level of affordability that will result many first time home buyers to enter the market. The key to recovery of the U.S. Housing market is two fold - foreclosures must slow to normal rates and people need to buy homes.

Seller paid down payment assistance has always been a valuable resource for new home buyers and with the tightening of the credit markets we may see this housing crisis unnecesarily prolonged by cutting off a key factor in this recovery - Helping new home buyers buy homes.