Free Utah Real Estate.com

Real Estate Update September 2008

An ever-changing market keeps it interesting!

Before I get into the statistics, I have to tell you how interesting the lending world is right now.  There have been some big changes.

First, the

down payment assistance program with FHA loans are gone

. 100% financing for conventional loans have not been available for months.  This popular loan type will be missed by some.  FHA, for now, does still allow the buyers family to gift the 3% down payment to them.  Closing this loophole, that allowed the seller to give money to the buyer through a third party, will strengthen the lending market in the long term.

Please spread the word to those you know.  New home owners will need 3% down for FHA loans and 5% down for conventional loans.  Requiring down payments for all borrowers will help both the lending and real estate markets stability.

If you are a landlord this is good news

. For many years now it has required less out of pocket cash to buy a home than to rent one.  Anyone with good credit could buy a home.  Now with the down payment requirement changes the rental demand will go up, as should the rents.

Other big news.  Fannie Mae and Freddie Mac have been taken over by the FED, because of their lack of capitol in this challenging lending market.  I understand changes have already been made on investor, non owner occupied loans.  The down payment requirement for these loans are now 15% up from 10% previously.  Loans with less than 25% down will be .5% higher on the interest rate.

The lending world has been removing loan programs for months as they tighten their belt in effort to reduce the high number on loans in default.  They now feel the risk is too high on some of these loan programs.  There are many great loan programs available with historically wonderful rates in the 6% range. Talking to a lender before you shop for a home is more important than ever.

Please take the time to let your friends and family know about these changes.  It is our hope that first time home buyers will be informed and prepared to achieve the American Dream of home ownership.

Visit Kennen’s agent profile for more information.