Tag Archives: FHA

Government Shutdown May Slow Your Atlanta Real Estate Market

We don’t really know if the recent government shutdown will destroy the economic momentum we’ve gained, but we do know the furlough of some 800,000 government employees will undoubtedly slow things down. Another thing we know is that the longer this thing goes on, the worse the effects will be. Some employees of the Pentagon were recalled for work beginning on Monday, and the House passed a bill to approve back pay for furloughed employees. That’s good news for those employees, but what about the millions of Americans who need and/or depend on their services. What about the work that’s not getting done while they are at home?

Imagine being a homebuyer in the middle of a real estate deal and the federal government shuts down. You need your tax transcripts to get your mortgage loan approved and the only department that has the keys to what you need is on furlough.

The approval of most mortgage loans, at least 99% of mortgage loans, require tax transcripts. Homebuyers and Real Estate Agents who are in this predicament will surely see a stall in their real estate transaction. In some cases, deals could potentially fall apart because of the inability for homebuyers to get what they need from the government. Plus, these delays could cause some pre-approvals to expire and force homebuyers to purchase at a higher interest rate if interest rates continue to rise. Because interest rates are a major factor in how much house a homebuyer can buy, sellers and real estate agents are affected as well.

Even if you are a homebuyer who was lucky enough to have gotten your transcripts and your pre-approval to buy a home, you could still have some issues if you applied for a mortgage loan from the Federal Housing Administration. FHA mortgage loans aren’t federally funded, but they are guaranteed by the federal government. Some lenders may not be willing to lend without a guarantee already in place. If you happen to be in this situation, go with a larger institution that is in a better position to fund the loan even in the absence of a guarantee. Otherwise, you’ll risk having your loan on hold and your real estate deal falling apart.

In Atlanta, there is already a shortage of real estate on the market relative to the number of Atlanta homebuyers who are looking to buy a home right now. Many of the houses on the Atlanta real estate market are foreclosures and HUD homes, and the Department of Housing and Urban development is working on a skeleton crew during the furlough with 337 out of 8,709 employees on the job. There’s a possibility, but seemingly a slim chance for new HUD homes to come on the market for a while. If this will be the case, Atlanta homebuyers will see even slimmer pickings for housing in the current Atlanta real estate market.

The American people as a whole immediately felt the effects of the shutdown. The gravity of the effects, however, will be determined by the length of the furloughs. The longer the furlough, the dimmer the bright spot of the housing market recovery. We’re all here in the same boat, waiting to see what happens.

In what ways have you felt the effects of the recent government shutdown?

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Taking Advantage of HUD Foreclosed Homes in Metro Atlanta:

A HUD Home is the outcome of a foreclosure on an FHA (Federal Housing Administration) Home Loan. FHA Loans are federal assistance, and have generally allowed lower income Americans to borrow money for the purchase of a home. In some markets, the general sales for HUD homes have increased as much as 13% in 2012.

When a homebuyer with an FHA insured mortgage is unable to make the payments, the lender forecloses on the home. FHA pays the lender what is owed on the home, and the United States Department of Housing and Urban Development (HUD) takes full ownership of the home. Anyone who qualifies for a mortgage or pays cash can buy a HUD home, but only owner-occupants can take advantage of the $100 Down Payment Program. Owner-occupants must live in the house as their primary abode for at least 1 year and may not purchase another HUD home for 2 years. You can request that HUD compensates at least 3% of your closing costs.

One of the best advantages that comes with buying a HUD home is that government guarantees that the title is clean. Unlike an auction you can actually visit the property and see what you are buying. HUD homes are sold

“As-Is”, “Where Is”, without warrant, and will not pay for any repairs. HUD homes are also able to be financed, which is another great benefit to purchasing a home. HUD pays for the process of purchasing homes by using one of their contracted attorneys. That being said, you can get the benefit of not having to pay for regular costs of attorney fees.

The number of HUD Foreclosed homes in the Metro Atlanta area have dramatically increased over the past few years. With the number of HUD homes available on the Metro Atlanta market, buyers have the potential to take advantage of these opportunities.

Source:

http://wpcarey.asu.edu/finance/real-estate/upload/FullReport201208.pdf

 

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