Fannie Loosens ARM Down Payment Rules

Fannie Loosens ARM Down Payment Rules

Fannie Mae is changing the requirement that borrowers pay a higher down payment to qualify for an adjustable-rate mortgage, announcing that it is bringing this type of financing more in line with that of fixed-rate mortgages.

Now, borrowers can make as little as a 5 percent down payment on a one-unit primary property using an ARM. Also among the changes is that borrowers need less equity in order to refinance into an ARM; they now need just 5 percent of equity to refinance. For purchasing a two-unit property, borrowers will need a 15 percent down payment for an ARM, or a 25 percent down payment or equity stake for a property with three or four units.

Investors could be eligible for an ARM on a one-unit property with a 15 percent down payment, under Fannie Mae’s new guidelines.

An ARM is fixed for a set part of the mortgage term—often 5 or 7 years—and then adjusts depending on the current market rate. There are caps on how much it can adjust in one year. ARMs tend to have lower rates than fixed rates, making them an attractive option to borrowers who need to lower their initial costs or plan to own for a short time.

Source: “Fannie Mae Lowers Down Payment Requirements for ARMs,” OriginatorTimes.com (Aug. 26, 2017)

20 Markets Dominating in August

20 Markets Dominating in August

Half of the 20 hottest housing markets in August were located in California. Vallejo, Calif., held on to its top spot in realtor.com®’s “hot list” this month. Realtor.com® ranks the top 20 medium-to-large metro markets where homes are selling the fastest and where buyers are searching the most on realtor.com®.

Detroit also made a comeback on realtor.com®’s list this month, entering the top five for the first time since October 2013. New metros added to the list for August include Grand Rapids, Mich.; Oxnard, Calif.; and Nashville, Tenn.

20 hottest housing markets in August are:

1. Vallejo, Calif.
2. San Jose, Calif.
3. San Francisco
4. Detroit
5. Stockton, Calif.
6. Kennewick, Wash.
7. Fort Wayne, Ind.
8. Columbus, Ohio
9. San Diego
10. Sacramento, Calif.
11. Dallas
12. Modesto, Calif.
13. Waco, Texas
14. Santa Rosa, Calif.
15. Fresno, Calif.
16. Grand Rapids, Mich.
17. Colorado Springs, Colo.
18. Denver
19. Oxnard, Calif.
20. Nashville, Tenn.

Source: “America’s 20 Hottest Real Estate Markets for August 2017,” realtor.com® (Aug. 24, 2017)

What Home Thieves Target Most

What Home Thieves Target Most

Renters are more likely to experience a burglary than homeowners, according to data from the Bureau of Justice Statistics. Apartment buildings with two to four units are the most at risk of theft.

“This is probably because plenty of people come and go from apartment complexes daily, while homes only have a few family members who enter or leave,” according to ADT, a security firm, which recently analyzed data on burglary risks across the country.

There were nearly 1.6 million burglaries in 2015, amounting to about one every 20 seconds, according to the FBI. About 72 percent were residential.

The cities with the most burglaries, according to ADT’s analysis, are: Lake Charles, La.; Vallejo, Calif.; Pueblo, Colo.; Youngstown, Ohio; Springfield, Ohio; Dayton, Ohio; Canton, Ohio; Santa Fe, N.M.; Memphis, Tenn.; and Albany, Ga.

On the other hand, ADT reports that the cities with the lowest amounts of crime tend to share similar social and economic characteristics, such as low unemployment rates, high education levels, and small populations. The cities with the fewest burglaries are: Palatine, Ill.; Orland Park, Ill.; Peabody, Mass.; Fishers, Ind.; Leesburg, Va.; Ramapo Town, N.Y.; Novi, Mich.; Carmel, Ind.; Rochester Hills, Mich.; and Johns Creek, Ga.

Of 400 convicted burglars who shared their reasons for committing a theft, their top reasons for break-ins were: drugs (51%); money (37.1%); foolishness (5.4%); thrills (4.4%); or revenge (2.2%). The ADT survey also showed the top items these convicted burglars were hoping to find in a break-in were: cash (90%); jewelry (77.8%); illegal drugs (65.9%); electronics (63.5%); prescription drugs (50.5%); and clothing or shoes (18.4%).

Source: “Burglary Odds Across America,” ADT.com (August 2017)

Kids Have Big Say in Real Estate

Kids Have Big Say in Real Estate

Buyers with children put more weight on the neighborhood, local schools, and size of homes when shopping for the right property, according to the 2017 Moving With Kids report, produced by the National Association of REALTORS®.

The neighborhood, in particular, has a big influence on home buyers with children under the age of 18. Forty-nine percent of buyers who have children consider the neighborhood based on the quality of the school district, and 43 percent choose a neighborhood by the convenience to schools, according to the report.

Buyers with children also tended to purchase a larger home, at 2,100 square feet with four bedrooms and two full bathrooms. Buyers with no children tend to prefer a home with three bedrooms and two bathrooms at an average of 1,800 square feet.

Many buyers with children also say child care expenses can delay their home purchase. Twenty-two percent of buyers surveyed said they had to delay their home purchase due to the costs of child care. Also, they reported having to compromise on the price, style, and size of the home they purchased, according to the NAR report.

Sellers with kids also have unique needs. One notable need is that they usually have to sell their homes faster. Twenty-six percent of owners with children under the age of 18 sold their home urgently compared to 14 percent of owners with no children at home. The main reasons for selling a home for sellers with children were that the home was too small or they faced a job relocation or a change in their family situation.

Source: “2017 Moving With Kids,” National Association of REALTORS® (Aug. 21, 2017)

Bypass Appraisals to help would be home owners…

Bypass Appraisals to help would be home owners…

Mortgage giant Freddie Mac has announced a new program allowing some home buyers to skip a traditional appraisal, which could lower the fees the buyers pay and speed up the closing process. Freddie’s Automated Collateral Evaluation (or ACE) will determine a property’s collateral risk by culling data from multiple listing services, public records, and historical home values, and then assess whether a buyer needs a traditional appraisal or an automated one. Borrowers who are refinancing may also be eligible for the program.

Those who qualify for an automated appraisal could save up to $500 in fees and make it to settlement up to 10 days sooner, Freddie says. “By leveraging big data and advanced analytics, as well as 40-plus years of historical data, we’re cutting costs and speeding up the closing process for borrowers,” says David Lowman, Freddie Mac’s executive vice president of single-family business. “At the same time, we’re providing immediate collateral representation and warranty relief to lenders. This is just one example of how we are reimagining the mortgage process to create a better experience for consumers and lenders.”

Lenders will be able to assess whether a property is eligible for ACE by submitting data through Freddie’s Loan Product Advisor. The program will factor in credit, capacity, and collateral to assess the quality of the loan and determine whether the estimated value of the home provided by the lender is acceptable. ACE will be available for home purchases beginning Sept. 1; it has been available for qualified refinances since June 19.

Source: “Freddie Mac Extends Appraisal-Free Mortgage Program to Purchase Loans,” HousingWire (Aug. 18, 2017) and Freddie Mac