Some Home Buyers Can't Afford to Wait for the Spring Market

An article by Matt Carter in today's Inman News titled, FHA hiking premiums this spring, details FHA changes and mentions two other events which could impact our Spring real estate market.

The Federal Housing Administration won't raise the 3.5 percent minimum down payment requirement for mortgages it guarantees as long as borrowers have FICO scores of 580 or better.

Beginning early this summer, however, borrowers with credit scores below 580 will be required to make down payments of at least 10 percent in order to participate in FHA's mortgage insurance program.

This spring, the Obama administration also plans to raise the upfront mortgage insurance premiums paid by all FHA borrowers to 2.25 percent, up from 1.75 percent now.

The increase -- some of which may later be shifted to annual premium payments -- will help build FHA capital reserves back to statutory minimums and bring back private lending, FHA Commissioner David Stevens said today.

Mr. Carter goes on to mention two other events that could have an impact on home sales

The Federal Reserve will wind down a $1.25 trillion program at the end of March that's helped keep mortgage rates low, and the recently expanded homebuyer tax credit expires for buyers not under contract by April 30 and closing by June 30 (see story).

Although the changes may affect a small percentage of individual buyers, Berkeley Hills Realty retains faith in our local market; a market which has remained stronger than the national averages. This belief will continue to be supported by the high number of cash buyers in the bay area (see story). In addition, Carter quotes NAR Chief Economist Lawrence Yun as stating that he does not expect the "modest tightening" announced today will stall the housing market recovery, given that interest rates remain near historic lows and that the homebuyer tax credit will remain in effect during the first half of the year.

"Any tightening will knock some would-be buyers out of the potential pool," Yun said. "But at the same time, any lax underwriting or FHA insolvency can have more significant future negative ramifications for the housing market."

Useful links:
U.S. Department of Housing and Urban Development Press Release: FHA Announces Policy Changes to Address Risk and Strengthen Finances
Berkeley Hills Realty website
Berkeley Hills Realty tools for home buyers
Berkeley Hills Realty agents

Curbing Lawn Lust

From the National Association of Realtor's Green REsource Council

A lush green lawn has long been prized in the American culture and routinely regarded as a selling point among real estate practitioners.

But such lawn lust is getting a second look by those committed to sustainability.

After all, that green carpet has serious environmental consequences when you consider the resources it devours and the chemical it emits in order for it to flourish. Those include water and gas and pesticides and herbicides that eventually run off and pollute waterways and disturb the aquatic ecosystem. Such chemicals also aren't healthy for adults, kids or pets.

"Unless your shiny green lawn can thrive without supplemental irrigation, gas-powered mowing, fertilizer and without spraying, that lawn of yours is leaving a pretty dirty footprint," comments Billy Goodnick, a Santa Barbara, Calif.-based landscape architect, educator and the writer behind Fine Gardening magazine's Cool Green Gardens blog.

Those are among the reasons that groups like the Lawn Reform Coalition (www.lawnreform.org) and the Sustainable Sites Initiative (www.sustainablesites.org) have emerged to promote more sustainable landscapes.

The Lawn Reform Coalition, for instance, includes gardening and environmental advocates from across the country who have joined forces to promote change in the American lawn. "The Lawn Reform Coalition wants people to rethink the idea that every home needs a sprawling, unimaginative patch of green," says Goodnick, a coalition member. "We’re working to quiet the siren song of the ‘perfect’ lawn and providing practical resources for creating beautiful, low-maintenance, environmentally-friendly landscapes."

And the Sustainable Sites Initiative has developed a performance benchmarking system for sustainable landscapes after recognizing that green building rating systems offer excellent tools for new and existing buildings, but relatively little for things beyond a building’s skin.

The group is a partnership of the American Society of Landscape Architects, the Lady Bird Johnson Wildflower Center at The University of Texas at Austin and the United States Botanic Garden, and its rating system applies to numerous environments, including retail centers, subdivisions, corporate campuses and single-family homes.

A question that may emerge is, "So what? What do lawns have to do with green housing."

A lot.

"You can’t call a home 'green' if it’s surrounded by a sink-hole of resource-greedy, nature-fouling lawn. A truly green lawn is one that doesn’t require a lot of inputs, like potable water and fossil fuels, and doesn’t produce waste or polluted run-off," says Goodnick.

If you or your clients are considering a lawn replacement or want to transition to a more sustainable landscape, resources and information abound.

Goodnick offers four paths to address lawn reform. They are:
1. Eliminate all turf and replace it with useful improvements, like lounging areas, paths, rain gardens or orchards.
2. Convert from resource-greedy varieties of grass to locally-adapted species, like buffalo grass or native sedges. Most use fifty percent less water and require less fertilizer and care than traditional grasses.
3. Keep lawn space just for recreation, and if you absolutely need a lawn, shrink it to save water, time and money and to reduce its environmental impacts.
4. Grow food. Although vegetables require about as much water as a typical lawn, the return on your efforts is immeasurably superior.

Additional sources of information include:
Berkeley Hills Realty has agents who specialize in green real estate as well as a collection of eco-friendly resources on the Green House page.
The EPA's GreenScapes program provides environmentally-friendly landscaping solutions to preserve natural resources and prevent pollution.
Calculate the resources a lawn is consuming
Safelawns.org offers a series of videos on everything from aerating the lawn to composting, mulching and weed control

C.A.R. H.A.F. Mortgage Protection Program Extended

EXTENDED INTO 2010!
Due to the popularity of this program, the qualifying period has been extended to December 31, 2010 or when allocated funds have depleted, whichever occurs first.

On April 2, 2009 the Housing Affordability Fund launched a new program designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and subsequently being unable to meet their monthly mortgage obligations. Qualifying buyers can receive up to $1,500 a month for up to six months in the event of job loss, a qualified co-buyer can also receive a $750 benefit for up to six months to help pay the mortgage.

TO QUALIFY FOR THE MORTGAGE PROTECTION PROGRAM APPLICANTS MUST:
· Be a first-time home buyer – someone who has not owned property in the last three years
(includes co-buyer).
· Open escrow April 2, 2009, or later, and close on or before December 31, 2010
(purchase agreement cannot be dated before April 2, 2009)
· Use a California REALTOR® in the transaction (fee for referral does not qualify)
· Purchase the property in California
· Be a W-2 employee (cannot be self-employed)

YOUR REALTOR® CAN PRE-QUALIFY YOU FOR THE MORTGAGE PROTECTION PROGRAM!
Due to the demand for the program, CAR has created a pre-qualification process that will ensure you get a policy if you meet the program qualifications and closes escrow before December 31, 2010.
Just ask your agent for an application and have he/she submit it with a copy of the qualifying executed purchase agreement – your file will be approved pending the receipt of the HUD-1 Closing statement indicating the close of escrow for your buyer.

Click here to meet a qualified Berkeley Hills Realty Agent.

· Download the Revised MPP Application followed by a list of Frequently Asked Questions.
( This must be submitted by an active California REALTOR® )
· Click here to review cynoSure Financial, Inc.'s program Terms & Conditions and
sample welcome packet.