Jan O'Brien - Real Estate Coach

VA Loans and Veteran Homeownership in Nevada

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When Congress created the VA Home Loan Guaranty program in 1944, Las Vegas would have been unrecognizable compared to the city it has become today. Now, thanks to the federal government’s generous subsidized home loan program, military homebuyers have the ability to use a Nevada VA loan to purchase a home in Nevada. Because of their great terms, VA loans are popular among military members and have aided more than 19 million Vets in purchasing a home.

After picking out a home in Las Vegas, buyers must consider their financing options. Two things that are central to choosing a financing option are down payment requirements and interest rates. Military buyers in Las Vegas will be happy to learn that VA loans keep both far lower than traditional loans. In fact, in the VA loan program, homebuyers seldom make a down payment.

Interest rates are competitive in Nevada VA loans, too. It’s important to know that the VA does not issue loans, but guarantees up to 25 percent of each loan against an unlikely default. With the VA’s backing, VA-approved lenders like VA Mortgage Center and other national lending leaders take on less risk. Thus, they are inclined to provide lower interest rates to qualifying military personnel.

Other savings through a VA loan include lower closing and concession costs, no private mortgage insurance and no prepayment penalty. The latter two are especially helpful in saving military homebuyers money on a repeated basis. Not all the perks focus on saving money, though. For instance, the program comes with services to help borrowers when they are about to default on a loan (although to be fare, this doesn’t occur often with VA borrowers). Nevertheless, it’s nice to have a helping hand if you find yourself in a tight spot.

Additionally, Nellis Air Force Base is located just a few miles to the north, so Las Vegas is a great city for active-duty service members to look for a home. Interest rates are capped for active-duty personnel, so buying property near or at Nellis could be especially beneficial as the housing market continues to rebound. The VA loan limit in Nevada is the standard $417,000, allowing homebuyers to finance up to 100 percent of a home worth that much.

A Certificate of Eligibility (COE) is the first thing you need to get a Nevada VA loan. Via the VA website or a VA-approved lender, COEs affirm that you meet the qualifying terms for the program.

Generally, people who may qualify fall into one of three categories:

-Military members who served on active duty for 181 days or 90 days during peacetime or wartime, respectively.

-Reservists or members of the National Guard who served for at least half a dozen years.

-Spouses who have not remarried and survived their husband or wife who died in the line of duty or because of a service-related injury.

This post comes to you from James Kelley, an author of vabenefitblog.com and law school student at the University of Missouri. 

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FHA Extends 90 Day Anti-Flipping Waiver to Expedite REO Sales

There is some good news for the Las Vegas Real Estate market and home buyers wishing to purchase a home with FHA financing that was sold at a trustee sale and now on the market for sale (aka "flipped").

The Federal Housing Administration has extended the suspension of its ‘anti-flipping rule’ through the remainder of 2011. 

FHA regulations typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days, but in February of last year, FHA temporarily waived this regulation through January 31, 2011, noting that in today’s foreclosure-ravaged marketplace, the agency’s research has shown that acquiring, rehabilitating, and reselling distressed properties often takes less than 90 days.

The waiver contains strict conditions and guidelines to protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices. The agency’s anti-flipping waiver is limited to those sales meeting the following criteria:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.

Read the full story at DSNews

HERA: Housing and Economic Recovery Act (effective July 30, 2009) Could Impact Closing Dates

Recent Federal legislation (HERA - Housing and Economic Recovery Act - effective July 30, 2009) could impact the closing date of your real estate transaction.  When completing a purchase agreement, consider a conservative closing date of 30-45 days from the accepted contract date.

HERA was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information (Truth in Lending Statement pertaining to Annual Percentage Rate or APR) regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance.

Key points of HERA:

• No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees may be collected only after four business days.

• Should the APR change by more than .125% on a fixed rate loan or .250% on an adjustable rate loan, the lender must disclose the new APR and the borrower must have a minimum of three business days to review the information before the transaction may proceed.

• Items that can trigger re-disclosure requirements include a change(s) in the loan amount, closing date, loan program, interest rate changes (waiting to lock interest rate), any fees that impact the APR or interest rate from the rate indicated on the original loan application.

• In cases where documents are sent by mail to the borrower related to re-disclosure of APR and/or providing a copy of the appraisal, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.

Las Vegas Down Payment Assistance (DPA) & Neighborhood Stabilization Program (NSP) - Buyer Education Class. May 30th

For homebuyers interested in learning more about how the federal government’s Housing Recovery Act can help them, Prudential Americana Group and Housing For Nevada are providing a solution. The Nancy Storey Team of Prudential Americana has partnered with the statewide homeownership program to teach HUD-approved education courses. The courses, led by Housing for

Nevada

president John Smith, are a prerequisite for homebuyers to apply for HUD’s down-payment assistance programs.

“In May, the federal government will release nearly $19 million in Southern Nevadato launch the Neighborhood Stabilization Program,” said Mark Stark, CEO of Prudential Americana Group. “The grants will be given to municipalities which will use them to help control neighborhood abandonment and blight. Among the uses for this money is down-payment assistance for first-time and entry-level homebuyers.”

Co-sponsored by Prudential Americana Group’s Nancy Storey Team and Housing For Nevada, the HUD-approved course will be held from 9:30 a.m. to 3 p.m. on Saturday May 30th at Prudential’s corporate office. The office is located at 2140 E. Pebble Road, Suite 160. To RSVP, email nancys@americanagrp.com or call 702-812-2520 with your name, phone number and email address.

• Homebuyers must complete HUD approved 8 hour First Time Homebuyer Education Program and receive one-on-one counseling
• Buyers must meet income and minimum investment requirements
• Must be foreclosed property in targeted area (Las Vegas, North Las Vegas and Henderson)
• Money available in form of a grant can be used for mortgage buy down, down payment, closing costs and rehabilitation
• Prospective home must be owner occupied
• Prospective buyers can’t currently own house or property
• Loan is forgiven if homebuyer stays in property for 15 years
• Repayment requirements apply if home buyer moves or rents the property prior to the end of the 15 years
  
  In addition to its education courses, Housing For Nevada’s homebuyer program assists families with financial planning to purchase a home, inspections and appraisals of the properties and rehabilitation if needed.
  
  

Should an Appraiser Use Short Sales and REO's as Comps?

Debbie Huber,SRA of Huber Appraisal and Home Pride Insections in Las Vegas is today's featured guest blogger.  Debbie has been appraising residential homes in Las Vegas for over 20 years and holds the SRA designation (Senior Residential Appraiser).  She is also a Past President of the Appraisal Commission for the State of Nevada.

Should appraisers use short sales or bank owned properties/repossessions as comparable sales or listings in their analyses? (Repo’s or bank owned properties are also known as REO’s.)  The best response to this question is that it depends on each particular subject property’s subdivision or market area, and what the typical types of sales are in that particular subdivision and/or area. Sales and listing data must be analyzed sufficiently to determine which properties are not only the most similar to the subject in features, amenities, quality and location, but also those that represent “normal” terms of sale by typically motivated parties for the specific market area.

At the time of writing this article (the third quarter of 2008), unless I am appraising a bank owned property or a short sale, I try not to use short sales as my actual comparable sales in completing an appraisal report. I believe that short sales may actually be a third, separate type of market, due to the difficulties of getting through the short sale process. The motivations of the involved parties may not reflect typical sellers’ (or buyers) actions in their markets, and therefore, lower selling prices are often the result. I don’t believe it is appropriate to use short sales as the actual comparable sales in an appraisal unless they are considered typical for that specific subdivision. If that is the case, then it is essential to utilize them. Keep in mind that appraisers must always analyze all market data pertinent to each subject property. While I must consider all short sales that are relative to a subject property, I may not necessarily use them as my comparable properties when completing the appraisal and report. It is important to discuss specific comparable sales in the appraisal report that may be considered pertinent, however, even if they are not identified as actual comparable properties in the report. This allows the client or user of the report to understand the logic of the appraiser and therefore, lessens the possibility that the report could be considered misleading in any way.

REO’s or bank owned properties that have sold also must be considered. The same logic applies to them. If they appear to be typical sales for a subject’s area, (which now seems to be the case in most areas) than they should be used as comparable properties. I have utilized bank owned properties (REO’s) as comparable sales only when I have determined that they are representative of the
neighborhood I am analyzing. In analyzing market data for any assignment, the more data one can analyze, a more accurate opinion of true market value should result. While Fannie Mae guidelines require a minimum of three comparable sales on the appraisal reports, it is important for appraisers to analyze more than just three sales. Only then can an appropriate determination be made which three (or more) properties are really the most representative of the subject’s market and therefore should be put on the appraisal report(s).

Listings, pending and contingent sales should always be considered, also, even if they may not appear in the appraisal report. Short sales and REO’s, if common in an area, may indicate the current competition in a subject’s neighborhood and could assist the appraiser to make the final determination of the opinion of market value. Many financial institutions are now requiring that appraisers include one or two current listings on all appraisal reports completed in Clark County.

Contact Debbie:

Huber Appraisal, please call (702) 243-3256 or email: debbie@huberappraisal.com                        

Home Pride Inspections, please call (702) 363-1681 m.harrison@homeprideinspections.com      

New FHA Appraisal Guidelines - Debbie Huber of Huber Appraisal in Las Vegas

Debbie Huber of Huber Appraisal and Home Pride Insections in Las Vegas is today's featured guest blogger.  Debbie has been appraising residential homes in Las Vegas for over 20 years and holds the SRA designation (Senior Residential Appraiser).  She is also a Past President of the Appraisal Commission for the State of Nevada.  Her topic is recent changes to FHA appraisal guidelines.

To reach her at Huber Appraisal, please call (702) 243-3256 or email her at debbie@huberappraisal.com                        

To reach Home Pride Inspections, please call (702) 363-1681

m.harrison@homeprideinspections.com      

FHA Required repairs for residential appraisals will be limited to necessary requirements. They fall under the three “S’s”: Safety, Security (of the loan), and Soundness. Typical conditions requiring further inspection or testing by qualified individuals or entities include (if the appraiser thinks it may be an issue): infestation – evidence of termites, inoperative or inadequate plumbing, heating or electrical systems, structural failure in framing members, leaking or worn out roofs, cracked masonry or foundation damage and drainage problems.

Examples of property conditions that may represent a risk to the health and safety of the occupants or the soundness of the property for which FHA will continue to require automatic repair for existing properties include, but are not limited to:

• Leaking or worn roofs (also, there cannot be three or more layers of shingles on leaking or worn roofs; all existing shingles must be removed before re-roofing)
• Evidence of structural problems (such as foundation damage caused by excessive settlement)
• Defective paint surfaces in homes built prior to 1978 (lead based paint?)
• Defective exterior paint surfaces in homes where the finish is otherwise unprotected
• Inadequate access/egress from bedrooms to exterior of home
• Security bars on bedroom windows must have quick release mechanisms for emergency egress
• ”Green pools” should be operating and clean

Repairs/inspections NO LONGER automatically required by FHA:

• Wood destroying insects/organisms inspections
• Private or community well inspections
• Septic system inspections
• Roofing inspections for flat or unobservable roofs
• Installation of stove(s)

Questions to FHA (Santa Ana office) can be directed to (714)-796-5577