Government Loan Tips

2012: Loan tips!!!

FHA LOANS: $295 BROKER FEE: AMMENDATORY CLAUSE:  IT IS REQUIRED ON FHA LOANS THAT THE BUYER AGREE TO THIS FEE PRIOR TO CONTRACTING A PROPERTY IN ORDER TO COLLECT THIS ON THE HUD1.  WE PROVE THIS BY USING THE BUYER BROKER AGREEMENT WHICH DISCLOSES THIS FEE.  PLEASE HAVE YOUR BUYERS WHO ARE DOING AN FHA LOAN SIGN THE BUYER BROKER WHILE WRITING THE CONTRACT AND PROVIDE THIS WITH THE CONTRACT TO ME.  MAKE SURE THE FHA AMMENDATORY CLAUSE MATCHES FINAL SALE PRICE.

VA LOAN: TERMITE FEE:  A TERMITE FEE IS CONSIDERED BY THE VA TO BE A SELLER FEE AND CAN NEVER BE CHARGED TO THE BUYER ON A VA LOAN.  THIS MEANS EVEN IF ALL SELLER CONCESSIONS ARE USED THE TERMITE FEE WILL BE CHARGED ON TOP OF IT.  PLEASE PREPARE YOUR SELLER FOR THIS.  A SOLUTION IS TO AGREE TO PAY AN AMOUNT OF A VA BUYERS SETTLEMENT EXPENSES CONSIDERING THIS FEE WILL BE PAID BY THE SELLER ON TOP OF THE AGREED CONCESSIONS. 

2008 HOMEBUYER TAX CREDIT COMPARED TO THE 2009/2010:  IF YOU RECEIVED THE 2008 TAX CREDIT YOU WILL BE REQUIRED TO PAY IT BACK OVER A PERIOD OF 15 YEARS.  THE CREDIT WAS $7500 AND OVER 15 YEARS YOU CLAIM $500 ON YOUR TAXES REDUCING YOUR REFUND BY THIS AMOUNT.  THIS IS ESSENTIALLY A TAX/INTEREST FREE LOAN FROM THE IRS.

IF YOU RECEIVED THE 2009/2010 $8000 FIRST TIME HOME BUYER OR $6500 SECOND/SUBSEQUENT BUYER TAX CREDIT YOU ARE REQUIRED TO MAINTAIN THIS AS YOUR PRIMARY RESIDENCE FOR 36 MONTHS.  IF YOU DO NOT, YOU MUST RE-PAY THE ENTIRE AMOUNT.  THIS IS NOT PRORATED FOR THE PERIOD OF TIME YOU LIVED IN THE RESIDENCE. 

WHEN ASKING FOR SELLER CONCESSIONS:

BE SURE TO INCLUDE “PRE-PAIDS” WHEN ASKING FOR SELLER CONCESSIONS.  FOR EXAMPLE “SELLER AGREES TO PAY UP TO $7000 IN SETTLEMENT ESPENSES TO INCLUDE CLOSING COSTS AND PREPAIDS.   ALSO IF ASKING FOR A % BE SURE TO DESIGNATE THE % IS OF “SALE PRICE.”VA LOAN: SETTLEMENT EXPENSES:

WHEN ASKING FOR CLOSING COSTS INCLUDE DEBT IN THE STATEMENT.  Example: SELLER AGREES TO PAY UP TO $7000 IN SETTLEMENT ESPENSES TO INCLUDE CLOSING COSTS, PREPAIDS AND BUYER DEBT.  THIS ALLOWS ANY REMAINING SELLER CONCESSIONS TO BE APPLIED TO DEBT FOR OUR BUYER. 

CONDO HO6 INSURANCE:

BUYERS MUST OBTAIN CONDO INSURANCE ON TOP OF THE MASTER POLICY.  THIS AMOUNT MUST BE EQUAL TO 20% OF THE “VALUE.”  THIS MEANS IF THE APPRAISAL COMES IN HIGHER WE NEED 20% OF THE APPRAISED VALUE.  THIS MUST BE STRUCTURAL COVERAGE WHICH EXCLUDES WHAT I CALL “SHAKE OUT ITEMS” AND LIABILITY COVERAGE.  TWO UNIT CONDOS REQUIRE $1,000,000 LIABILITY COVERAGE COMBINED BETWEEN BOTH UNITS. 

ALL LOANS: CREDIT TO BUYER AT CLOSING:  

A BUYER CAN RECEIVE NO MONIES AT CLOSING ABOVE WHAT WE PROVE THEY HAVE SPENT.  IF THEY WROTE AN EMD FOR $1000 AND WROTE ME A CHECK FOR $400 FOR THE APPRAISAL, THEY CAN RECEIVE UP TO $1400 BACK AT CLOSING.  THIS IS IMPORTANT AS I SEE MORE “CARPET ALLOWANCE” TYPE STATEMENTS IN CONTRACT.  REMEMBER THE BUYER CAN NOT RECEIVE THIS AT CLOSING.

CONTRACTS:

BE SURE ALL CONTRACTS ARE LEGIBLE.  THEY ARE SCANNED INTO A SYSTEM AND IF THEY ARE NOT CLEAR WE CAN NOT SCAN IT AND THE UNDERWRITER WILL CONDITION FOR A CONTRACT:  SOLUTION: IF THIS HAS BEEN FAXED SEVERAL TIMES PROVIDE ME WITH A CLEAR UNRATIFIED COPY TO ACCOMPANY THE ORIGINAL RATIFIED COPY.