Mortgage Blog

I would like to update you on what is happening out of Washington on the following:

Status of Tax Credit: Things are looking good!

While a final deal was not reached over the last couple of days, there are some encouraging signs that a deal is very likely. It seems to be more a question of "when" rather than "if".

The latest proposal (which is still subject to change) would extend the tax credit until April 30,2010 and also expand it to “move up” buyers.

Details of the revised homebuyer credit reportedly are as follows:

· Credit is changed to 10% of sales price up to $7290

· For first time homebuyers, the income level to qualify is $ 75,000/150,000.

· For "move up" buyers the income level to qualify is $ 125,000/250,000.

· For "move up" buyers, they must have been residing in their primary residence for 5 years.

· The credit runs from Dec. 1, 2009 to April 30, 2010.

· Sales contracts signed as of April 30, 2010 would have 60 days to close.

Extension of Temporary Higher Mortgage Limits

It appears that we are also getting closer to extending the current temporary increase in FHA & GSE mortgage limits for another year. Hopefully, this legislation will also be passed in the next week or so.

FHA Condominium Changes

FHA maintains that they will be publishing the condominium letter shortly (we have been hearing this for about the last week). They held meetings with some of the major trade groups this week and have advised the following:

• FHA concentration will go to 100 percent in established projects, 50 percent in new projects.

• Pre-sale will be lowered to 30 percent

• Owner occupancy remains at 50 percent

• Commercial space will remain 25 percent but FHA will do waivers as requested

• FHA will eliminate "spot loan" approval. They maintain this will not be a problem.

Declining Markets Policy

As suspected, FHA should be eliminating the second appraisal requirement for properties above $417,000 in declining markets.

Randy Reed 303.524.9191

CMPS, CML