First time buyers and homes for sale in Sterling, VA

Even though many new buyers are entering the “starter home” priced market, prices remain static, as gun-shy lenders and leery appraisers refuse to increase exposure by adjusting prices to reflect the demand in the marketplace.

Interestingly, this combination of institutional fear and buyer inducement has opened the way for massive returns to those with cash. They are filling the void as private mortgage lenders or to simply bring cash offers and flip properties to would be first time buyers.

In the midst of the chaos caused by unsupported mortgage loans, made earlier in the decade, there is opportunity for would be buyers. Expansion of the tax credit scheduled to start on December 1st, 2009, and continued historically low pricing continue to give buyers their best opportunity on a killer deal in years.

We predict that just as with starter homes, we will see increased demand for move-up homes for sale in Sterling, once the tax credit reaches more buyers. We do however expect the impact to be less significant than the impact of the first time buyer credit, as the reality is that many would be move-up buyers are simply too far underwater to get out of their current mortgages with pricing as unreasonably depressed as it has become over the last few years.

One huge ray of hope for real estate which we have heard little to nothing about is that, those hit earliest in the downturn, should be nearing the two year mark from the lose of their homes. Those that were wise enough to negotiate a short sale, rather than allowing a foreclosure, should begin to find themselves considered credit worthy by lenders over the next 12 months. Some may even be able to recover fast enough to take advantage of the 2010 tax credit!

Ironically, it is the very people who probably took-out the worst type of loans, who will recover in time to bolster the market first. Still if they have found enough income to qualify for a legitimate home loan and can come in and buy up some of the inventory, I say great. Let’s get our values back where they should be and out of the falsely low valuations that have been pushed on to the market over the last few years.

Special help for Sterling, VA first time home buyers

A recent release from Loudoun County adds to the growing mountain of good news not only for those buying homes for sale in Sterling, but every first time home buyer anywhere in Loudoun County.

On November 6th, the county released the following email:

“The Virginia Housing Development Authority (VHDA) has announced Fiscal Year 10 funding allocations under its SPARC program (Sponsoring Partnerships and Revitalizing Communities), a below-market-rate loan program administered by the Loudoun County Department of Family Services. The funds will be available through June 30, 2010 or until fully utilized. Applicants must be first-time homebuyers and meet VHDA’s standard eligibility requirements. Sales price and income limits apply.

Discounts on VHDA first-trust loans will be available at one-half percent (1/2%) below VHDA’s loan program rates and available to homebuyers with incomes from $21,550 to $82,150 (adjusted by family size; families of five or more may qualify at higher income levels). These loans are targeted only to households purchasing a foreclosed home (short sales not eligible) in one of the Neighborhood Stabilization Program (NSP) areas. Current eligible areas are Sterling and Sugarland Run with a zip code of 20164. A map of the eligible area can be found at the following link: http://maps.huge.info/zip.htm

More information about SPARC is available online from VHDA at http://www.vhda.com/ or by contacting one of the VHDA-approved lenders who will be able to explain more about this program. Only VHDA-approved lenders can offer SPARC funding.

For information, contact Karen Thorson, Department of Family Services, at 571-258-3814 or karen.thorson@loudoun.gov.”

With the federal tax credit, the lowest mortgage rates since the 1930′s, prices at 5 to 10 year lows, access to a VHDA mortgage funds for first home buyers makes it an even better time to buy in Loudoun County.

Rehab loans…

Just received this information from one of my lender groupies – This is good stuff.

The FHA 203(k) loan allows a customer to purchase or refinance a property and finance the cost of rehabilitating the property with one loan and one closing. HUD strongly encourages the 203(k) program; the loan is now easier to close than ever before.
The advantages of the 203(k) loan is based on the projected value of the property after rehab work is completed and takes into account the cost of the work. The funds for the work to be completed are placed in escrow with the Lender allowing construction draws to follow. The 203(k) program is available only to an owner-occupant. Standard FHA down payment requirements apply for owner-occupants. With the 203(k) program, up-front mortgage insurance premium is now required (effective December 31, 2005) and up to six months mortgage payments can be financed if the house is not habitable during the renovation. The 203(k) program may be assumable for qualifying customers.
Another advantage of the 203(k) is the wide range of properties that can be purchased using the loan. Permissible properties include, but are not limited to, the following:
• One to four unit properties that satisfy local zoning requirements and were completed at least one year prior;

• Homes demolished or razed as part of the rehabilitation process if the existing foundation system remains intact;

• Any property the buyer wishes to convert from a single family dwelling into a two to four family dwelling or vice versa;

• A “mixed use” residential and commercial property provided it meets certain requirements.

• Cooperatives are not eligible.

Several simple guidelines apply to the 203(k) loan. First, mortgage proceeds must be used in part for rehabilitation and/or improvements to a property. There is no minimum cost of repairs and/or improvements to be done.
Any repair that may affect the health and safety of the property and/or improvements in functionality and modernization to the property are acceptable repairs.
The following list illustrates the vast array of improvements that can be financed through the 203(k) program;
• Structural alterations and reconstruction;

• Changes to improve functionality and modernization;

• Elimination of health and safety hazards; changes for aesthetic appeal and elimination of obsolescence;

• Reconditioning or replacement of plumbing, heating, air conditioning and electrical systems; Installation of a well or septic system;

• Roofing, gutters and down spouts;

• Flooring, tiling and carpeting;

• Energy conservation improvements;

• Major landscape work;

• Improvements for handicapped accessibility.

Luxury items and improvements that do not become a permanent part of the real property, are not eligible for financing through the 203(k) program as a rehab cost. Installation of a barbecue pit, bathhouse, dumbwaiter, exterior hot tub, sauna, spa, outdoor fireplace, photo mural, new swimming pool, gazebo, television antenna, satellite dish, or tennis court for example would not be acceptable under the 203(k) program.
Another advantage of the 203(k) renovation loan is that purchasers are burdened only with the cost of one closing. Higher loan amounts are allowed on 2-4 unit buildings. Moreover, the 203(k) allows brokers, agents and other parties participating in the sale of the property to be paid before the renovations are completed. The 203(k) loan is a terrific financial product for those attempting to either sell or purchase a “handyman’s special” or a foreclosure property. The 203(k) allows purchasers to renovate and create their dream home with a small down payment and a minimum of hassle.

This is a terrific way for someone who wants to own a home to buy one that need a little love and turn it into a positive equity property without having a lot of cash. So, if you are looking for homes for sale in Sterling, now you can consider homes that may not have been viable for you before.

First time buyer tax credit extended and expanded…

We are thrilled with the new extension and expansion of the federal first home buyer credit, which now includes many move-up purchasers as well.

Below is a quick reference grid to see if you qualify:

Feature		Credit ending Nov 30th, 2009		New Credit ends Apr 30th, 2010
Buying First Home Credit		$8,000 ($4,000 married filing sep)		$8,000 ($4,000 married filing sep)
Buying First Home Eligibility		Must have had no interest in a principal residence for previous 3 years		Same
Current homeowner Credit		No Plan		$6,500 ($3,250 married filing separate)
Effective Date – Current Owner		N/A		Date of Enactment
Current homeowner Eligibility		N/A		Must have used sale property as principal residence for 5 consecutive years of the last 8
Termination of Credit		Post Nov 30th, 2009		Post April 30th, 2010
Binding Contract Rule		N/A		So long as a written binding contract to purchase is in effect on April 30th, 2010, closing must occur prior to July 1st, 2010
Income Limit		$75,000- Single, $150,000 married		$125,000 – Single, $225,000 – Married
Max Purchase Cost		N/A		$800,000 Effective Date of Enactment
Purchase by a Dependent		N/A		Dependents are Ineligible Buyers as of date of enactment
Anti-fraud Rule		N/A		Documentation of purchase required to be attached to tax return