theLoftsearch Blog

New FHA loan guidelines / FHA loan changes / FHA Loan Requirements

Bringing risk reduction efforts to the consumer level, effective April 5, the FHA will raise mortgage insurance fees that borrowers must pay, cap the amount of cash that sellers can contribute for closing costs and require higher down payments for the borrowers with poor credit scores.

• The new upfront mortgage premium will cost borrowers 2.25 percent of the loan amount, up from the current 1.75 percent — the second increase in the past two years. The upfront premium can be rolled into the loan. Later, some of the cost increase could be added to a borrower’s additional annual mortgage insurance premium (about 0.55 percent of the total loan amount) which is paid monthly.
• New borrowers must have a minimum FICO credit score of 580 to qualify for FHA’s 3.5 percent down payment loan, otherwise the borrower must put 10 percent down. Most lenders require a minimum credit score of about 620. A credit score is a numerical rendition of a borrowers creditworthiness. The higher the score, the better the credit and the better likelihood of qualifying for the least expensive loan.
• Sellers will only be able to contribute closing costs that amount to 3 percent of the sale price, half the current 6 percent. Experts say the higher maximum encouraged borrowers to mark up the price to compensate for their concession.

                                            by Free Rate Update.com

Tax Credit Quandaries Answered
The complexity of new home buyer tax credits leaves potential buyers with many questions. Here are answers to some of the most confusing:

How does a current home owner qualify for the $6,500 credit?
Buyers must have lived in their homes for at least five out of the last eight years. The home they buy must become their primary residence, but buyers don’t have to sell their previous home. They can use the previous home as a rental or a second home and still claim the credit.

Does the new home have to be more expensive than the one the buyer currently owns?
No. It is fine to use it to downsize. If the property sells for more than $800,000, the buyers don’t qualify.

Can buyers who are building a new home claim the credit?
Yes, although the contract must be in place by April 30 and the buyer must move in by July 1.

Can buyers claim the credit if they purchase a home from a relative?
No. The legislation prohibits taxpayers from claiming the credit if the sale is between “related parties,” including parent, grandparent, child, or grandchild.

Source: USA Today, Sandra Block (11/24/2009)

Obama Signs Extended Tax Credit into Law

Expected to contribute approximately $22 billion to the economy, Congress overwhelmingly passed a bipartisan measure this week extending the $8,000 home buyer tax credit to April 30, 2010.

The legislation, which is part of a larger bill that also extends unemployment benefits, was signed into law by President Obama today.

More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years.

Income limits for eligible home buyers were also expanded to $125,000 for single buyers and $225,000 for couples, up from $75,000 for individuals and $150,000 for couples. Qualifying home prices are capped at $800,000.

NAR's Government Affairs Division has compiled facts on the changes made to the current tax credit. NAR members sent more than 500,000 letters to leaders in Congress and made nearly 13,000 telephone calls to Senate offices last weekend to encourage support. So far this year, REALTORS® have spent nearly $14 million lobbying Congress, according to federal campaign finance records compiled by the Center for Responsive Politics.

Sen. Johnny Isakson, a Georgia Republican and a former member of NAR, was key in extending the credit, as well as pushing it through initially. Other prominent boosters include the National Association of Homebuilders and the Mortgage Bankers Association.

Listen to NAR President Charles McMillan's podcast announcement.

NAR economists estimate that approximately 2 million people will take advantage of the tax credit this year.

Sources: NAR and The Associated Press, Julie Hirschfeld Davis (11/06/2009)

Finally the new Regal Cinemas Stadium 14 multiplex opened on Monday, Oct. 26. It now became easier for all of the downtown residents to catch a movie. No more trips to Hollywood, Glendale or elsewhere.. The new state of the art Multiplex is now ready for your enjoyment at the L.A. Live, steps from home..

The Regal Cinemas Stadium 14 at L.A. Live is at 1000 W. Olympic Blvd. Information and show times at (877) 835-5734 or regmovies.com.

On the Fast Track

Huizar, Broadway Proponents Speed Up Streetcar Effort

Approximately 120 people attended an Aug. 14 workshop on a Broadway streetcar. Initial plans call for the route to connect the historic corridor with L.A. Live and the Grand Avenue project. Photo by Gary Leonard.

by Anna Scott

DOWNTOWN LOS ANGELES - Downtown Los Angeles could see a working streetcar system sooner than anticipated, as city officials have fast-tracked a proposal to bring back a trolley that would connect Broadway to the L.A. Live entertainment district and the Grand Avenue project.

Originally pegged as a 10-year endeavor, those involved with the streetcar effort now hope it could open in half that time. "We think it's realistic to have it under construction within two years, and have it up and running within four and a half to five years," said Russell Brown, head of the 23-member Bringing Back Broadway Streetcar, Parking & Transportation Committee, a group of stakeholders and transit experts studying transportation issues along the historic corridor.

Despite the renewed enthusiasm and momentum, however, there are several hurdles to clear before the project comes to fruition. Challenges include scraping together the more than $60 million in estimated costs and completing the extensive studies required before settling on a route.

The current effort to bring a streetcar to Downtown after a 45-year hiatus grew out of 14th District City Councilman Jos/ Huizar's Bringing Back Broadway initiative, an effort to revive the faded street, that launched in January. Since then, the streetcar has taken on a life of its own.

The turning point, said Huizar, was an April trip to Portland and Seattle, where he led a delegation in studying the streetcar's effect on economic development and traffic in those cities.

"When I originally thought of Bringing Back Broadway, I thought the streetcar would be a cherry on top of a sundae," Huizar said. "But after the Portland trip, I recognized that the streetcar was actually the driving force behind renewed economic development." Now, he said, he sees the streetcar, along with reviving the street's historic theaters, as the top priorities on Broadway.

On Aug. 14, a community meeting on the streetcar effort brought approximately 120 people to the New LATC on Spring Street. The next day, the Bringing Back Broadway Trustees, a group of 30 government leaders, property owners and other stakeholders, approved the formation of a nonprofit organization to handle the design, construction and eventual operation of the Downtown streetcar.

"Moving forward with this nonprofit is a significant step that answers a very basic question," said Huizar. "People were asking, 'Is the streetcar going to be run by the city? By Metro?' It will be run and accountable to the nonprofit that we form."

Events

Staples Center

photo by Christian Pondella/Shazamm/ESPN Images

Photo by Christian Pondella/Shazamm/ESPN Images.

Big Air and Moto X Step Up are two competitions that fans of the X Games are very familiar with. The first one is pretty self-explanatory: BMX bikers and skateboarders fly off an 80-foot ramp and hang in the air as long as possible. The Moto X Step Up is the high jump for dirt bikes, where the rider has to clear a bar that's raised higher and higher - and still land upright. Catch all the freestyle tricks and extreme sports action at the Staples Center July 31 and Aug. 1. Doors open at 3:30 p.m. There's also a party, benefiting the V Foundation for Cancer Research and the Staples Center Foundation, on July 30 at the Staples Center City View Terrace with a bird's eye view of the ramp and the chance to mingle with X Games stars. Staples Center, 1111 S. Figueroa St. For the X Games, (213) 742-7340 or staplescenter.com. For the party, (213) 742-7166 or staplescenterfoundation.com.