There’s great news from Fannie Mae for home buyers who have experienced a short sale or deed in lieu of foreclosure. To help the housing market’s continued stability, Fannie Mae is changing the “waiting period” (i.e. the amount of time that must elapse after the preforeclosure or short sale event) before home buyers can qualify for a loan.

Several factors will impact these changes, including the required down payment or loan to value (LTV) for the transaction and whether extenuating circumstances contributed to the individual’s financial hardship (e.g. a job loss). The following chart highlights the new rules:

(1)The maximum LTV ratios permitted are the lesser of the LTV ratios in this table or the maximum LTV ratios for the transaction per the Eligibility Matrix.

Note that the terms ‘short sale’ and “preforeclosure sale’ are both referenced in Fannie Mae’s announcement and have the same meaning – the sale of a property in lieu of a foreclosure, resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer.

The bottom line:  Buyers who have experienced a short sale or deed in lieu of foreclosure may be eligible for financing sooner than previously expected…especially if they have 20% to put down.  If you have any buyer prospects who may benefit from this change, I’d be happy to help you put them in a home.

Read the full announcement from Fannie Mae.

Here is a powerful and positive little fact: sales for single family residences for Brevard County are up over 22% for July of 2009 verses July of 2008.  That is an astounding year over year number.  Additionally, new listings are down slightly over 20% this July verses last July.  So, it looks like sales are up and inventory is down; this is a strong sign that the market is improving, and we are bottomed out.  If we continue on this track, this current real estate “sale” could end.

There are no real surprises in the market data from July against that of June.  Sales continue to show strong numbers, and inventory is decreasing.  With 78% of the sales being under $200,000, buyers are really looking for the bargains.  One thing that we have found is that these “bargins” are going fast, as 36% of July sales sold in less than 30 days.  That means that if the price was right, the house sold fast!

With 66% of homes being financed in the Brevard County area, buyers are still taking advantage of the historically low interest rates.  With the majority of the financing being done through FHA and VA loans, many are enjoying the benefits of these government insured and guaranteed loans.  With the $8000 First time Home Buyers credit still being offered, first time homebuyers are rushing to the market to find their dream home.

All in all July’s Brevard County mortgage and market data proved to be in line with the theme that the market is improving.  Sales are up, inventory is down, rates are still low, and with incentives to purchase for first time homebuyers, it is an amazing time to be purchasing real estate!  So, make sure that you speak with a mortgage professional to get an idea of you purchasing power and financing options, and then go out there and get yourself a deal before the “sale” is over!

The FHA insured loan is a great loan option for many borrowers as it gives home owners a very low down payment option, allows features that conventional loans do not (a conventional loan is any loan that is not a government loan), and has historically very low interest rates.  Currently the FHA will allow a loan amount up to $291,250 for a single family residence in Brevard County, Fl.  Right now this limit is good through the calendar year 2009, however, there is talks of extending the limits into 2010.

Just to recap, here is a list of some features of the FHA loan:

Source of Down Payment Flexibility  - Your required down payment can come as a gift from many different sources, as well as approved community assistance programs.

Great Rates and Low Monthly Mortgage Insurance  - While the rates change on a regular basis, they are currently very low, and do not much differ from conventional financing.  Depending on credit score, FHA rates could actually be lower than conventional financing.

Low Down payment option – Minimum of 3.5% down payment

Seller Paid Closing costs - seller can pay up to 6% of the purchase price towards closing costs and prepaids to help you purchase the home with very little out of pocket expenses.

No penalty for lower credit scores - you are not penalized in the rate for having a lower qualifying score, however, your credit score must be over 620 as most lenders have set that as the minimum allowable score.

Rehabilitation loan option - there is even an FHA loan that will allow you to finance repair or updating into the loan.

The FHA insured loan remains a great option for so many different situations, however,it may not be right for every borrower.  This is why it is imperative to contact a mortgage professional to help you find the product that best fits your situation.  Please feel free to contact me anytime with questions.