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FHA, FANNIE MAE and FREDDIE MAC LOAN LIMITS
Fannie
Mae and Freddie Mac are both toughening their credit score and down-payment rules as of April 1, 2009.
In response,
major lenders are already factoring in the higher fees, which reduces the effectiveness of the stimulus efforts.
Under
the new guidelines, buyers with down payments of less than 25 percent will be charged a three-quarter point add-on penalty,
no matter how high their credit score.
Buyers of duplexes, where one unit is owner-occupied and the other is rented,
will be charged a 1 percent add-on.
Refinancers who take cash out will be charged as much as three points if they have
a low to moderate equity stake.
Freddie spokesman Brad German says the loan categories and credit risk combinations
targeted by these fees "default at four to eight times" the rate of other mortgages backed by Freddie. "We have to manage
these risks appropriately," he says.
Copyright NATIONAL ASSOCIATION OF REALTORS®, Reprinted with permission. Source:
Washington Writers Group, Kenneth R. Harney (02/15/2009)
For more information on how the Economic Recovery Act may
affect you and your real estate objectives, check out the latest articles and updates from the National Association of REALTORS
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THE IRC §1031 TAX DEFERRED EXCHANGE, or "Starker Exchange,"
is a valuable investment strategy used by saavy investors to defer capital gains taxes on real estate investment property.
Visit the Web site of Asset Preservation Incorporated
for a variety of educational information on the IRC §1031 tax deferred exchange and related topics.
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CALIFORNIA ENTRY-LEVEL HOUSING AFFORDABILITY INCREASES TO 59%
Wednesday,
Feb. 18, 2009
C.A.R. reports entry-level housing affordability increases to 59 percent
LOS ANGELES (Feb. 18)
The percentage of households that could afford to buy an entry-level home in California stood at 59 percent in the fourth
quarter of 2008, compared with 33 percent for the same period a year ago, according to a report released today by the CALIFORNIA
ASSOCIATION OF REALTORS® (C.A.R.).
C.A.R.’s First Time Buyer Housing Affordability Index (FTB-HAI) measures the percentage
of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes
for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time
buyers in the state.
The minimum household income needed to purchase an entry-level home at $248,030 in California
in the fourth quarter of 2008 was $48,900, based on an adjustable interest rate of 6.02 percent and assuming a 10 percent
down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly
payment including taxes and insurance was $1,630 for the fourth quarter of 2008.
At $48,900, the minimum qualifying
income was 42 percent lower than a year earlier when households needed $83,700 to qualify for a loan on an entry-level home.
Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of
the typical California households, where the median household income is $59,160.
At 76 percent, the High Desert region
was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 44 percent,
followed by the Los Angeles County region at 46 percent.
The First-Time Buyer Housing Affordability Index also rose
6 percentage points in the fourth quarter of this year compared with the third quarter of 2008, due to a 14.1 percent decrease
in the entry-level median home price. Consumers can review California historical affordability data
and other related information through the CAR Web site.
Leading the way…® in California real estate for more than
100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United
States with more than 180,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered
in Los Angeles.
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