Time is not on your side
If you are a homeowner in distress, time is running out for an emergency home loan. As reported on Friday, these programs made available through the U.S. Department of Housing and Urban Development (HUD) are for folks who are in jeopardy of losing their homes to foreclosure.
April 1, the Idaho Housing and Finance Association began taking applications for these emergency loans. Out of the 500 to 600 people in Idaho who may be helped with this money, more than 250 had already requested applications by Friday. The EHLP is a federal program designed to help unemployed families make their mortgage payments for up to 24 months by providing zero-interest loans of up to $50,000. The loans, which may be forgiven over five years as long as the homeowner lives on the property, will provide emergency assistance to homeowners facing foreclosure risk caused by job loss, underemployment or a medical condition. Idaho is one of five states sharing in this $1 billion foreclosure prevention program.
Of course not everyone in trouble will benefit. As illustrated above, the competition is going to be stiff and the money will go fast. Only those meeting certain criteria are eligible;
• Gross income must be less than 120 percent of area median income (AMI) for the county in which they live. In Kootenai County that median is $68,400. For Shoshone, Bonner, Benewah and Boundary counties it's $61,080.
• The applicant must be at least 90 days behind with mortgage payments (as of April 4, 2011),
• The homeowner must reasonably expect to resume mortgage payments upon successful re-employment.
Still, for those that meet the requirements this program could be a blessing. You can get an application online at www.ihfa.org.
For the rest of us, last week saw a slight jump in interest rates. Although still considered extremely low at 4.61 percent (ihfa.org) for a 30-year mortgage, many expect rates to continue an upward climb.
Aside from rising interest rates, newly proposed Federal Deposit Insurance Corporation (FDIC) rules could make it more difficult to buy a home. The plan, unveiled by the FDIC would require a minimum 20 percent down payment for home loans. In the past some have opined that if people don't have 20 percent down, they shouldn't buy a home. With interest rates this low, many can buy a home and have a lower monthly payment than their rent on a similar home. Which is better?
The National Association of Home Builders hosted a teleconference to discuss the negative impact the new rules would have on the economy as they keep pressure on housing prices. Said Barry Rutenberg, First Vice Chairman of the NAHB: "Requiring a high down payment would disproportionately harm first-time homebuyers, who have limited wealth and, on average, account for 40 percent of home-buying activity. It would take an average family 12 years to scrape together a 20 percent down payment."
At least for now, IHFA offers down payment assistance, homebuyer tax credits and counseling. And for the time being, USDA loans and FHA loans are still available with little or nothing down. It is interesting to note that these types of loans have lower default rates than conventional mortgages.
Times are certainly changing but those who act quickly can still find an affordable way to own a home.
Trust an expert... call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.
Kim Cooper is a real estate broker, Realtor and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664 with your questions or commentary.