What's a Low-Income Home Buying Program?


What are low-income home buying programs, and how do they help home buyers?

I get this question a lot, especially from first-time home buyers. So here's an overview of low-income home buying programs, how they work, and where you can learn more.

Generally speaking, a low-income home buying program is any program that's designed to help home buyers who may not otherwise qualify for a mortgage loan.

Normally, when you talk about such programs, you're talking about a loan that gets some form of government backing. In other words, the government backs or guarantees a loan on behalf of the home buyer who is applying for the loan. This is the essence of how most low-income home buying programs work.

When the government backs a loan for a slightly unqualified borrower, mortgage lenders will be more inclined to loan money to that borrower. The lender is comfortable doing this, because in the event that the borrower defaults on the loan, the government has agreed to back it, so the lender would still be paid.

Fannie Mae
Fannie Mae is a shortened version of Federal National Mortgage Association (FNMA). Congress created this organization in 1938. According to their website, Fannie Mae "provides financial products and services that make it possible for low-, moderate-, and middle-income families to buy homes of their own."

Learn more at www.FannieMae.com

Freddie Mac
Freddie Mac is a shortened version of Federal Home Loan Mortgage Corporation. Congress chartered this organization in 1970. Freddie Mac supports the secondary mortgage market by purchasing residential mortgage loans and reselling them to investors (mostly on Wall Street). This increases the availability and affordability of home loans for low- and middle-income Americans.

Learn more at www.FreddieMac.com

As a home buyer, you wouldn't normally deal directly with an organization like Freddie Mac or Fannie Mae, but they do have a role in the low-income home buying process.

Federal Housing Authority
The Federal Housing Authority (FHA) also supports low-income home buying in the U.S. This organization was created as part of The National Housing Act of 1934. The FHA insures mortgages, which helps low-income home buyers qualify for mortgage loans they might not otherwise qualify for.

Learn more at www.FHA.gov

Rural Housing Authority
The Rural Housing Authority (RHA) can assist low-income home buyers in certain situations. The RHA is part of the United States Department of Agriculture (USDA). Unlike the organizations listed above, the RHA actually makes direct loans to home buyers. They also guarantee loans for home buyers in rural areas.

Learn more at www.rurdev.usda.gov/rhs

Veteran's Administration Home Loans
The Veteran's Administration (VA) helps home buyers by guaranteeing loans made by mortgage lenders. The VA does not actually make direct loans. The VA home loan program is reserved for U.S. military veterans and their spouses. To apply to this program, one must first obtain a Certificate of Eligibility from the VA. The home buyer would then present this certificate to their mortgage lender.

Learn more at www.homeloans.va.gov

State-Sponsored Programs
In addition to the federal programs listed above, there are many programs unique to certain states. For instance, the Michigan State Housing Development Authority "makes low interest mortgage loans available through [their] network of experienced lenders." Most other states have similar programs, in one form or another.

State programs are too numerous to list on this page. To learn more about them, searching online for home buying programs in your state.

* You may republish this article online if you retain the author's byline and the active hyperlinks below.

Top 3 Reasons to Delay Purchasing a Home


So you have set aside enough funds for a down payment on a house and closing costs? And you are curious to know if there is ever a time when you shouldn’t buy? Regardless of all the benefits of buying a home, it is still a major and life changing purchase and a buyer should go forward with an cautiously optimistic but informed attitude.

An important thing to honestly evaluate before you purchase is the average appreciation rates of your local market and your own personal circumstances. Historically, the average appreciation rate for real property has been roughly 6%; however, as the nation is huge your local market appreciation rates can obviously vary. Your main objective should be to stay in your house long enough so that you are not placed in a position where you will have to sell your home at a loss. If you have to sell a home before it has appreciated enough to cover the costs and commissions of selling, you could find yourself in a serious, financial bind. This especially applies to those who buy a home with a down payment of ten percent or less. In the market of the past five years, many who purchased homes with zero down payments are finding themselves in exactly that position, basically “under” their loan.

Real estate commissions traditionally run around six percent of a home’s sales price. The seller’s closing costs generally amounts to about one and a half percent. Adding all the costs you would incur if you were forced to sell, you can see how this can easily exceed the first year’s appreciation of your home. If you made a minimal down payment (from 3% - 5%), you could actually have to come up with cash out of pocket to sell your home. In addition, if the value of the houses in your neighborhood has dropped considerably, you may also find yourself owing a deficiency judgment. A deficiency judgment is a judgment for an amount not covered by the value of the security( in this case your house) put up for a loan or installment payments. In general, with the final sale of the house, the owner is still left with a balance owing on the original amount of the loan and is liable by law to pay it. While this is the worst case scenario, it still is prudent to know that such situations can occur and realistically evaluate how you can avoid them.

The three occasions when it is much better to hold off on buying a home are the following:

New to the Area

A very good to reason to delay buying a home is if you have just moved to an unfamiliar area or region of the country. It makes sense to rent for a number of months before deciding on exactly which neighborhood you desire and can afford to live in. Often when people are too hasty to buy a home immediately, they find that they might have made a better decision if they had waited awhile and had become more familiar with the surrounding neighborhood and local community. They would have additional leisure time to evaluate home values and find the best bargain in the neighborhood they desired to live in.

Uncertain or Unstable Job Future

You could have just graduated from college or you are expecting a promotion and a transfer. Or perhaps, your company has announced an impending "restructuring” or “downsizing”. If any of these apply to your situation, it might be best to forego buying a home until your job and financial situation stabilizes. It is much easier to dissolve a lease on an apartment or condo, than to try to sell a home in a financially difficult or pressing situation.

Marital Problems

While not advertised on national real estate ads, real estate agents are often participants in the real unfolding life drama of clients who have to sell their houses due to foreclosure, divorce, and deaths in the family. One of the saddest scenarios occurs when recent former clients undergo a divorce and are forced to sell a recently purchased house. For whatever reason, many couples in marital turmoil, are steeped in denial and often decide that buying a new home may help resolve their difficulties. Perhaps it is inevitable that such problems should then occur, but selling a home before it appreciates can create an additional emotionally draining financial burden in an already difficult situation.

While this certainly isn’t meant to discourage the prospective buyer, it certainly is intended to inform the buyer of the serious decision they are about to undertake and to evaluate his or her circumstances honestly. Taking the time to be forthright at the outset will assure a purchase they will be happy with in the long run.

Miami Beach Real Estate Preconstruction


The great places to invest with are Orlando, Las Vegas and Miami, but of course in terms of investing preconstruction property, Miami is the best place to look into.

Indeed, Miami Beach has many things to offer you. Miami Beach is known to be one of the hot vacation spots in the US. It has beautiful beaches, thrilling nightlife, five star restaurants and hotels, and fascinating mix of cultures.

But since Miami has been rising the longest so the prices has been quite higher over the last several years, although if you have preconstruction property in mind, investment could still be a good idea.

Indeed, Miami or Miami Beach in particular, is a seller’s market, usually desirable and attractive properties just stay in the market for short period of time and the prices are higher. The prices of the properties are quite higher, which is the reason why preconstruction investment properties are doing great in Miami.

Yes, there are lots of advantages in getting preconstruction properties in Miami Beach. Actually, preconstruction market in Miami Beach is growing.

Preconstruction properties have lower prices than buying a properties which been there for quite a long time. Let us say for an instance, there are two properties, the one has been there for about four years now, and the other one is just being built. The property which has been there for about four years has a lot of amenities around it, and the other one, since it is just getting started, it doesn’t have amenities yet, the reason why it has lower prices. It is affordable to invest with. But as soon as the new property is completed, then new amenities will soon be developed and the property you bought will soon be worth as much as the other property which has been there for four years.

Investing to preconstruction real estate in Miami Beach is a good idea, it has a lot of advantages, and you will be investing in one of the great place, you will have the chance to see and explore the beauty of Miami Beach. Since you all know that Miami has a lot of amazing spots, a lot of recreational areas that you can visit if you plan to invest a home or property in Miami Beach preconstruction real estate.

Yes, Miami Beach preconstruction real estate is out there, and if you are really planning to get one, then go for it. All you have to do is make your research and you can also contact real estate agent or brokerage and make sure to tell them that you are looking for preconstruction real estate. These people can help you in your quest for finding your preconstruction investment, since finding preconstruction developments in Miami is quite tough right now but they are out there. So make some research and work with an agent.

So if you are truly interested in purchasing Miami Beach preconstruction real estate, you better start now, but of course do not forget to obtain all the valuable information you need to know in Miami Beach preconstruction real estate. Research and find an agent that can help you in finding and purchasing preconstruction real estate.

Aspen Real Estate - Advantages Of Using A Buyers Agent


I was recently looking for a second home in the Aspen real estate market.

When shopping for real estate, whether it’s a first home, second/vacation home, commercial investment or raw land, it’s almost always a good thing to enlist the services of a Buyer’s Agent. I found a buyers agent available at Aspen Snowmass Homes.

What is a Buyer’s Agent? To answer that properly, we’ll have to take a look at the business end of the Real Estate Industry. At the top of the food chain is a Broker. This person has to have been in the business a number of years, and now has Agents that work for and under that Broker. The Broker makes money off of each Agent’s commissions. In exchange, he provides office space, receptionist services, and may offer some advertising budget. If there is an affiliation with a larger national franchise, the Broker is the one who arranged that and is responsible for those costs as well.

The Agent makes a percentage of the sale. Generally speaking, that percentage, as established by industry standard, is 6 percent for improved property, and 10 percent for raw land. Of course, like any other contract, it is whatever is agreed upon by both parties, and what the market will bear. When an Agent secures a listing on a property, that is an exclusive right to sell the property. Generally speaking, the contract requires that the Agent/Broker will make efforts to advertise the home, show it, etc., and that they will be paid that percentage as their fee, should the house sell within the term of the listing agreement or to a buyer which they have produced. In order to provide fair compensation, sell more houses, and as a professional courtesy, when a Buyer comes from a fellow realtor, that (Buyer’s) Agent will split the commission with the Listing Agent; Each will get 3 percent of the selling price of the home. This costs the buyer nothing.

Why, then, would you want the services of a Buyer’s Agent? For starters, you’ll then have an industry professional who knows what it is you are after, what your tastes are, what is and isn’t acceptable to you, what your financial situation is, etc. This will save you a lot of time wandering around looking at properties that a realtor is trying to push. As Listing Agents stand to make the entire 6 percent for themselves, they’re naturally more interested in persuading you to buy what they have in their own office. What you need is someone who’s on your side, concerned with what YOU want. That’s where the Buyer’s Agent comes in.

Not only will a Buyer’s Agent filter out the time-wasting listings that a realtor might have pushed on you, but they’ll also be in your corner during negotiations. Of course, they don’t get paid if you don’t buy anything, so they’re still going to want to make a sale. But if they already know you aren’t going to pay more than X dollars for a house or other property, they’ll be pushing hard to see to it that the Seller comes down to that price. It behooves you, then to not let the Buyer’s Agent know the full amount you’re able or willing to pay. You can always decide to come up, but you can’t back the magic number down once the Agents (either of them) know what you’re able to spend, if you decide to do so.

A Buyer’s Agent can be any realtor you feel comfortable with, one that you trust who is knowledgeable and has some business savvy. Sometimes we become friendly with an Agent who has sold us a home before. That shouldn’t be the basis for choosing that person as a Buyer’s Agent. Find someone who you believe will be on your side, working for you and your best interests.

I came across such an agent years back, while looking for raw land in Southern California. I wanted to spend only a few thousand dollars. Every realtor I’d checked in with in the Joshua Tree area had summarily informed me that no such listings existed, that they had nothing under $10-15k. (Fact was, they didn’t’ care to be bothered for anything less expensive because their commission was 10 percent.) One lady heard me, and we went through the MLS search there in her office. Lo and Behold! A ten-year-old listing for 2 acres on a corner, with water, for a mere two thousand dollars!

Needless to say, I wanted the property. When the Selling Agent tried to jack up the price, she informed him in no uncertain terms that the listing was in the MLS, a public offer, and we had agreed to the full asking price. We closed the deal through the mail.

That goes to show the value of a Buyer’s Agent. Parcels (much further away from the blacktop highway than the one she found for me) were listed at $6-15! In all, we found over a dozen listings UNDER $5,000, because she had taken on the role of Buyer’s Agent. She went about finding what fit my needs and requirements, rather than what would give her the largest commission. This same agent refused to accept any bonus or tip, wouldn’t even take a night out on the town for her and her husband. She insisted that she made her commission and that was good enough. THAT is the sort of person you want for a Buyer’s Agent. She was friendly and efficient, went after what I wanted, and landed the deal for me.

By this example, you can see why you will want someone like that in your corner when you’re in the market for a real estate investment. The business is full of all kinds of people. Some Agents are very honest, decent folks. Others are land-sharks; you can’t trust a word that comes out of their mouths. It makes both dollars and sense to get yourself an expert who’s on your side, a Buyer’s Agent to work for you.