New Funding Assistance Option for First-Time Home Buyers in Oregon

How would you like to receive a $2,000 grant to help finance your down payment or closing costs? If you’re a first-time home-buyer who’s an Oregon resident in the market for a new primary residence here, you just might be in luck. The Home Sweet Home Program, created in spring 2010 as a partnership between the Oregon Bankers Association and the Oregon Association of Realtors, recently received $100,000 from Oregon Housing and Community Services (OHCS). Those funds will be used to help 50 Oregonians purchase their first home. All of the OHCS funds will be used for homebuyer grants — and all administrative costs of these loans will be absorbed by the OBA and OAR. The Home Sweet Home program was created to help provide homeownership opportunities for low- and moderate-income Oregonians earning less than or equal to 80 percent of the area’s median income. Initial funding was provided by a grant from the Ira Gribin Workforce Housing Grants Program, a fund established by the National Association of Realtors to stimulate efforts to address the growing need for affordable workforce housing. To qualify for the grant, you must meet certain eligibility requirements, including the following: You must be a first-time home buyer. You must be able to qualify for a standard mortgage loan product. The purchase must be for your primary residence. Your household income can’t exceed 80 percent of the area median income in the county where the home is located (check with your lender to verify that amount). You cannot have more than $10,000 in liquid assets remaining after loan closing. You must successfully complete an approved home...

Five Local Lenders Selected for new FHA Loan Program

Thanks to HUD’s Leland Jones for the following update: HUD Secretary Shaun Donovan and Energy Secretary Dr. Steven Chu recently announced that five lenders based in the Northwest are among 18 nationwide selected for FHA’s new Power Saver pilot loan program. They are ShoreBank Enterprise Cascadia, HomeStreet Bank,  SOFCU Community Credit Union of Oregon, Paramount Equity Mortgage and the City of Boise. Through PowerSaver, homeowners will be able to borrow up to $25,000 to make energy-efficient improvements of their choice, including the installation of insulation, duct sealing, replacement doors and windows, HVAC systems, water heaters, solar panels, and geothermal systems. FHA mortgage insurance will cover up to 90 percent of the loan amount in the event of default. Lenders will retain the remaining risk on each loan, incentivizing responsible underwriting and lending standards. PowerSaver loans are only available to borrowers with good credit, manageable debt and at least some equity in their home (maximum 100 percent combined loan-to-value). “PowerSaver hits on all cylinders,” Secretary Donovan said at a Long Island press conference, “by helping credit-worthy homeowners finance these upgrades, cut their energy bills and boost the local job market in the process.” Find more Oregon-specific HUD news...

Mortgage Insurance Premium Update

For many home buyers, mortgage insurance is about to get more expensive. FHA has announced changes to both the upfront and annual premiums that will be applied to FHA loans assigned on or after Oct. 4. As a result of HR 5981, the FHA upfront mortgage insurance premium (which is typically collected at closing and financed into the loan) will be reduced from 2.25 percent to 1 percent. However, the new annual mortgage insurance premiums (which is collected as part of your monthly mortgage payment) will cost almost double (the exact amount depends on the loan-to-value ratio). The upcoming rate changes were announced in August and were supposed to take effect on Sept. 7, but after many in the industry expressed fears that the system wouldn’t be able to handle the changes in time, the date was pushed back to Oct. 4. For an example of how the rates may affect you, here’s a good example in an article by RisMedia. You can also see details about the update at the official Mortgagee Letter-2010-28 on HUD’s...
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