General Requirements for FHA’s Minimum Property Standards
These are the general requirements the appraiser is to note to make sure the property complies with FHA’s Minimum Property Standards. FHA does not generally allowance for repair escrows. All required repairs must be competed prior to close. Typical conditions that would require further inspection or testing by qualified individuals or entities are:
Infestation or evidence of termites - Pest Inspections are only necessary when there is evidence of decay, pest infestation, or suspicious damage or when it is customary to the area or required by state law.
Mechanical Systems – Utilities must be turned on during the property inspection, if not a re-inspection is required. Plumbing and electrical systems must be in proper working order. Inoperative or inadequate plumbing, heating or electrical systems, visible frayed wiring, or exposed wires in living areas or inadequate amperage for the property would require an inspection by a licensed electrical or plumbing contractor and repaired if recommended.
Foundation, Basement, Crawl space - Hairline step-cracks are common, however, horizontal cracks, bulging walls or separation of sill plate from top of foundation wall are critical and require inspection. Any evidence of dampness, pooling water or settlement, signs of past water problems which may include efflorescence, mold, mildew or stains on walls or mechanical equipment, requires an inspection by a licensed contractor in the specific field of expertise.
Roofing - Roof coverings, roof drainage systems, flashing, skylights, and chimneys will be checked for evidence of leakage or abnormal condensation on building components. Evidence of deterioration of roofing materials (missing tiles, shingles, flashing) or roofing materials that are worn, cupped, or curled usually requires an inspection by a licensed roofing contractor.
Grading and Drainage - If the grading does not provide positive drainage from the improvements or if there is evidence of grading and drainage problems, repairs could be required. Proper drainage control measures may include gutters and downspouts or appropriate grading or landscaping to divert the flow of water away from the foundation
Lead Based Paint Hazards - For any home built prior to 1978, check for evidence of defective paint on interior and exterior surfaces including: peeling, scaling or chipping. The area must be scraped or sanded and painting.
Attic – insulation, deficient materials, leaks or readily observable evidence of significant water damage, structural problems, previous fire damage, FRT sheathing, exposed and frayed wiring and adequate ventilation by vent, fan or window are subject to inspection.
Crawl Space - Access to the space should be clear. The crawl space must have adequate access (minimum entry of the head and shoulders). Distance from the bottom of floor joists to ground should be adequate for maintenance and repair. The support beams should be intact and of structural soundness.
Examples of minor property conditions that no longer require automatic repair for existing properties include, but are not limited to:
* Missing handrails
* Cracked or damaged exit doors that are otherwise operable
* Cracked window glass
* Defective paint surfaces in homes constructed after 1978
* Minor plumbing leaks (such as leaky faucets)
* Defective floor finish or covering (worn through the finish, badly soiled carpeting)
* Evidence of previous (non-active) Wood Destroying Insect/Organism damage where there is no evidence of unrepaired structural damage
* Rotten or worn out counter tops
* Damaged plaster, sheetrock or other wall and ceiling materials in homes constructed after 1978
* Poor workmanship
* Trip hazards (cracked or partially heaving sidewalks, poorly installed carpeting)
* Crawl space with debris and trash
* Lack of an all weather driveway surface
Holy Guacamole…. It is crazy busy these days
My son just turned 12 and is in 7th grade, And is growing into such a little young man. U of M is winning, yeah! (Sorry State fans) Always lots of running this time of year, but last night I got a proud Mama moment.
I had a cousin, whom I had never met, come into town from California and while my husband and I were creating this amazing feast, my two children, entertained him and had wonderful conversation and it was just absolutely adorable.
As a parent, you wait for that moment when you feel like, “Hey, we DID do a good job raising our children.” I got one of those moments last night. It’s football and soccer season in my house and the craziness begins. So a lot to tell you about what is going on in the industry. Please email me with questions or let me know how I can help!
Win Free Advertising at the Next Hot Properties Meeting:
When? Wednesday, September 16, 8:30 am -10 am
Where? Home Builder’s Association
What? Continental breakfast served
Why? Win the drawing for a banner ad on the home page of Ann Arbor.com!
Rates are still amazing.
We can do second mortgages up to 90LTV if they meet certain criteria
Appraisal turn times seem to be running at the two week mark.
Remember for all those deals you plan on closing in November, that the title company will collect 1.5 times last years’ December taxes at closing, make sure your using a loan officer, (like me), who will make sure your borrower doesn’t have a huge surprise at closing because they are collecting extra til the tax bill comes out. Especially all those buyers needing to close by November 30, 2009 to get the tax credit.
MDIA
This new law requires us to make sure our APR is not .125 more or less than originally disclosed. Well normally I put all the costs on a good faith and then show the seller concessions as a lump credit and then we itemize it at closing, well I got to be the first one hit by this new rule, you must itemize it in the good faith, even though my APR is lower, I still have to disclose and give them 3 full days to review before we can close. So be aware of this, or now that I am aware of it, just call me.
Rural Development turn times
Rural Development is running about two weeks behind right now they are working on August 24, 2009.
125% LTV Refinances
This product is supposed to be available on October 1, 2009 and although we have always been able to do FNMA refinances, Freddie Mac insisted that it remain with the current servicer, well that is lifted on October 1, 2009 as well, so for those people who need to refinance that are underwater, we can refinance those as well.
FHA (black and) BLUES?
With so many distressed bank-owned homes being bought by first time homebuyers using FHA financing - often requiring repairs prior to close – sometimes we feel ‘beat up’ by the time we get to the closing table! It would help to prepare your buyers for the possibility of repairs they may have to handle themselves because the sellers (banks) won’t! You may even want to avoid showing properties that are potential time & money eaters if your buyers extremely busy, moving here from out of town, scraping by for cash to close, or under a big time crunch!
Please see the list for repairs and inspections. Some are up to the discretion of the underwriter and/or appraiser. Remember FHA is a great low down payment loan and it helps if everyone understands the pitfalls going into it!
No Appraisal Needed– No MI Required!( yes I am sure)J
There are quite a few FNMA owned properties in Washtenaw County! These homes are eligible for a great low down payment loan with some fantastic features:
1 - No appraisal needed!
2 - No mortgage insurance required
3 - 5% down for primary residences
4 - 10% for investment properties or 2nd home
Go to homepath.com to check for current listings.
The Count Down Begins!!
Get those PA’s bottom lined by the middle October so your clients can get closed by November 30 and qualify for their 2009 tax credit.
Getting back to business
Wow has it been a long time since I wrote you. So I went to Vegas middle of last month and no I didn’t win any money, but I had a great time with girlfriends, saw Bette Midler in concert and she was fabulous. I came back and we have done dive meets and baseball games and my son hit a grand slam in one of the games, which was amazing.
His pitching has reached a whole new level and I can’t wait to see him pitch tonight, one of our own from U of M will be there, Zach Putnam who got signed to the Cleveland Indians.so big night tonight. Anna continues to work at HVF as receptionist/scanner is getting ready to go back to Eastern Michigan to continue on her journey to become an early child development teacher and Barry and I are just trying to keep up and take time now and then to sit on our gazebo outside and have a glass of wine and breath. My neice, Christine, has been staying with us this summer she will be a senior in highschool next year, she is here to keep up with Lee and help out.She makes picnic dinners for all of our games and meets so we eat pretty healthy, All in all a great summer. Next week Lee goes on a Mission Trip to Detroit with our church and ny neice goes back home to visit it will be very quiet next week!
So back to business…..
We are now back to normal underwriting times. Our rates are very competitive I am seeing alot of purchase business pick up, finally some short sales are getting finalized and coming together.
Some notes:
FHA is still a great deal, and wonderful for your relocating resident physicians
Rural Development allows 100% financing AND 6% concessions, + if it appraises over sales price you can use the difference to finance closing costs.. Yes I am serious 
FHA allows a non-occupant cosigner, but the the borrower has to have a credit score
Minimum credit score is 620, we have one investor who will do 600 on FHA’s
Refinances- Fannie Mae will allow us to start doing 125% LTV September 1, 2009; Freddie Mac will allow us to start doing loans period for the refinances October 1, 2009
They were only allowing the current servicer to do it and that isn’t working out -)
Update on $8000 at closing
Several of our lenders have finally announced that they will accept the additional down payment funds provided by this tax credit program. It must come via an approved down payment assistance agency. Here’s the problem….none of those agencies have come forward with the protocol yet. You can get more information by going to www.irs.gov and searching for IR-2009-27.
Hot Properties…
…is coming up tomorrow, Wednesday, July 15 at the Homebuilder’s Association Building at 8:30 am. Get your listings
to Liberty Title so they can make the Power Point presentation. This is a great program to promote your listings to your colleagues. Lots of deals have been done through this program!
FHA Approved Condos
Did you know that you could check the HUD website to get the list of FHA approved condos?
Go to https://entp.hud.gov/idapp/html/condlook.cfm, enter Detroit for the office, our state, the city where you are looking to get the best results.
If that doesn’t work, try entering the zip code. But don’t get discouraged if the condo you want to sell is not on the list. We can still get spot approvals.
Lenders may need more underwriting time to get the loan ready to close.
Speaking of underwriting…
Turn times are getting back normal!
Biggest News Ever!!
First, yes rates skyrocketed, but rates are coming back down and the mortgage bond activity will continue, I believe, til rates are back in line and yes the biggest news ever…
You can use the $8000 homebuyer tax credit towards your downpayment. I have attached the official letter from HUD that outlines all the details. So now…. go forth and tell all
Have a great weekend and will tell more fun stuff next week, cause I know that you can’t sit still now anyway!
Lots of info today!
Spring is such a sense of renewal and rebirth. Everywhere I looked there are tulips! You can’t help but smile when you see a tulip! As most of you know, I have been working constantly for a long time, and this past weekend, I was not feeling well. No it wasnt the swine flu, it was simply being run down. So I rested and then yesterday, we planted flowers and took care of the yard and cooked out. It was such a beautiful day. I felt like a normal person. (By the way, if you have never cooked corn on the cob on the grill in the husks, you have to try it!) Anyway, it was a reminder to me that life needs balance and so my goal now is to take care of my customers, but to take care of me too and enjoy this life I have been given! So now onto business…
Rates are up a little, we will see what happens today…, markets are flat right now.
As of Friday, May 1, the Fannie Mae/ Freddie Mac Home Value Code of Conduct was put into place. This is the new guideline that deals with how appraisals will now be ordered. At Huron Valley Financial, we have chosen to have our own, non commissioned support staff order our appraisals from our own approved appraiser list on a rotating basis. Alot of your other lending institutions will probably be utilizing an appraisal management company. > We feel utilizing a list of local appraisers that we have approved is a better way to go. Which in turn is better for our customers. So use us;-)
Also, we have hired an Underwriter, Suzanne Conklin, which means I just send an email or walk down the hall to get the information on those tougher deals and questions! She is in the process of getting policies in place and probably within the next 4-6 weeks, she will be underwriting all our files, which means that also should cut down on underwriting turn times, that we are all dealing with, so yet one more reason to use Huron Valley Financial 
AND..yes there is more!
We have a new pricing engine, which will allow me to check all of our investors at one time, to determine the best rate, is that cool or what?
So what to remember?
FHA-3.5% down, 6% seller concessions
USDA, rural development, 0 down, 6% ++ seller concessions, can roll costs into loan if house appraises higher than sales price. Kicker(Property and income needs to meet guidelines) http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
The above link will allow you to determine if the house is eligible and there are links on there for household income limits.reap
FHA 203K -home rehabilitation loan, repairs are financed on top of he mortgage(3.5% down)
Fannie Mae Homestyle Renovation-10%down- again repairs are financed on top of mortgage
3% down, no PMI, no appraisal for primary, second home AND investors, property has to be a Fannie Mae property and on this website.
Soon goodfaith estimates and the HUD will be changed before the end of the year. We will keep you posted.
Have a great week and remember to take in the tulips all around you.