Lower prices lure home buyers in MayExisting home sales rise 2.4%
to 4.77 million, with fewer distressed sales
WASHINGTON (MarketWatch) - Falling prices boosted sales of pre-owned homes in May to the highest level since October, the National Association of Realtors estimated Tuesday.
Existing-home sales rose 2.4% to a seasonally adjusted annual rate of 4.77 million, the trade group said. Sales have risen in three of the past four months, and are down 3.6% in the past year.
The sales increase was less than the 4.85 million rate expected by economists surveyed by MarketWatch. See Economic Calendar.
The median sales price fell 16.8% in the past year to $173,000, the third largest year-over-year decline on record. The median sales price fell 30% in the West.
read full article from Market WatchLinked article courtesy of David Brown,
Salem Oregon real estate broker
Prudential Real Estate Professionals
503-302-2333
THE FHA REHAB LOAN 203K
FHA still offers a rehab loan that allows buyers to borrow up to $35,000 for improvements. This may be an excellent strategy where the home in question is a fixer, or needs work that cannot be paid for in cash by the buyer after the down payment an closing costs (which could be paid by the seller up to 3% of the purchase price). Here's how it works:
from the HUD site:
Introduction Section 10 1 (c) (1) of the Housing and Community Development Amendments of 1978 (Public Law 95557) amends Section 203(k) of the National Housing Act (NHA). The objective of the revision is to enable HUD to promote and facilitate the restoration and preservation of the Nation's existing housing stock. The provisions of Section 203(k) are located in Chapter II of Title 24 of the Code of Federal Regulations under Section 203.50 and Sections 203.440 through 203.494. Program instructions are in HUD Handbook 4240-4. HUD Handbooks may be ordered online from The HUD Compendium or from HUDCLIPS.
203(k) - How It Is Different Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made.
When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan.
Eligible Property To be eligible, the property must be a one- to four-family dwelling that has been completed for at least one year. The number of units on the site must be acceptable according to the provisions of local zoning requirements. All newly constructed units must be attached to the existing dwelling. Cooperative units are not eligible.
Read full article : HUD website
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Salem Oregon real estate broker
Prudential Real Estate Professionals
503-302-2333
