Whenever I have a new listing I always inquire about the investor ratio, and unfortunately a recent listing of mine is coming in high.  Anything above 50% investors makes anything less than 20% down extremely difficult.  My new listings is likely geared to a 1st time home buyer – and how many 1st time home buyers do you know that have 20% to put down?  Not many…  The issue at hand is mortgage insurance.

Anything less than 20% down requires mortgage insurance and right now there are few – if any – mortgage insurance companies willing to “insurance” loans for condos with more than 50% investor owned.

If you’re a seller, understand this will impact your value and your marketing time.  What’s the impact?  Probably about 10% of the value or more, and possibly triple the marketing time.

If you’re a buyer, with at least 20% down payment, you can find a great buy!  This situation won’t last forever and so when it changes, you’ll have instant equity.

Credit for this blog is given to GCAAR.  www.gcaar.com

Fannie Mae will no longer require borrowers to put up an extra 5% down payment when purchasing homes in areas deemed “declining markets.” Fannie Mae had been hearing concerns from REALTORS® and others for months that the policy was bad for housing because it discouraged consumers from buying in markets hardest-hit by foreclosures. NAR met several times this spring with Fannie Mae officials and sent letters reflecting members’ unease with the policy. Under the policy change, borrowers can get loans up to 95% loan-to-value, even in markets in which prices have been falling. Prior to the change, borrowers could only get loans up to 90% to give lenders a 5-percentage-point cushion to protect against possible price declines in the future.

The new policy takes effect June 1, and Freddie Mac has said it will also scrap this policy

With all the media attention on the so-called credit crunch, it sounds like there are no mortgages available unless you have perfect credit, a 20% down-payment, and helped a little old lady across the street this morning. Not so – FHA to the rescue!

The Federal Housing Administration is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.  FHA loans had fallen out of favor over the past few years as people chose sub-prime mortgages with low teaser rates and little documentation, but currently one out of every five mortgages is FHA insured.

Do you need 20% down?  The great news is that FHA only requires 3 percent down. 3 percent!  And that 3 percent can come in the form of a gift or grant.  FHA borrowers only need to have $500 in a transaction.  All the while, FHA mortgage rates are as good or better than their conventional counterparts.

Low or no down payment, extremely competitive rates and easier qualifying, no wonder FHA is moving up the charts!