Featured in National Mortgage Professional Magazine
Print and online version, August 2018.
Don’t wait until it is too late!!!
Congress voted to extend the current National Flood Insurance Program for 4 months! This extension offers a temporary reprieve for millions of property owners who are getting their flood insurance through an affordable government subsidized program. The purpose of the extension is to reform the NFIP as it currently exists and to keep the coverage during the 2018 Hurricane Season.
The National Association of Realtors wants to see it remain in place because repealing the program immediately affects people trying to purchase homes. They might not be able to find affordable flood insurance. The cost for non-government subsidized insurance could be so high that it may affect their debt to income ratio and make them ineligible for financing.
NAR would like to see the following changes occur:
- NFIP reauthorization should be long term.
- Flood mapping should be done at higher resolutions with a streamlined and less expensive appeal process.
- Premiums should be more accurately priced to the property specific risk, but any rate increases should be gradual and phased in over many years.
- Private flood insurance options should be encouraged where cost effective, provided that NFIP remains a viable option for property owners.
- To keep rates affordable, the federal government should also provide pre-disaster risk mitigation options – including guaranteed loans, grants and buyouts for property owners to build stronger or relocate to higher ground.
- There should be better oversight and training of insurance companies marketing NFIP policies, and an adequately supported FEMA Office of the Flood Insurance Advocate to assist policyholders with flood map and rate disputes.
The argument against the flood insurance subsidy is that the true benefit of lower priced flood insurance is being redirected to owners of multi-million-dollar properties. US Senator, Mike Lee, R-Utah, proposed a limit on the property values eligible for NFIP assistance at $2.5 Million. According to Mike Lee, “NFIP doesn’t charge homeowners appropriate premiums based on their location in Flood Zones or based on their property value. The NFIP underlying policy is flawed.” He believes that flood insurance should be handled by the private sector.
Currently, most insurance companies that sell flood insurance are merely brokering NFIP-backed policies, so their rates and coverage are like that offered by the federal program.
While privatizing flood insurance sounds like a good idea if you live in a non-coastal state, it is important to note that the NFIP was created in 1968 because it was difficult for private companies to offer affordable flood risk rates to homeowners in flood zones.
This issue will resurface when hurricane season comes to an end, and Congress must make another decision on the fate of NFIP.
If you can’t buy your Dream Home…Create it!
With the housing supply at an all-time low and prices sky high, a HomeStyle Renovation Loan can get you into a house that you can make into your dream home with one conventional first mortgage.
The HomeStyle Renovation mortgage is a simple and easy way for borrowers to make renovations and repairs to a home that might be less than perfect, but perfect for you! Borrowers can obtain funds in addition to the cost of the mortgage with standard pricing. The funds can be used on many renovation projects and can be used to address repair contingencies as well.
Top Reasons to consider a HomeStyle Renovation Loan:
- Cost-effective way to renovate or repair a home, at the time of purchase or later.
- Funds to renovate are provided by one mortgage rather than a second mortgage, home equity line of credit or other costlier methods of financing.
This program is available for both purchases and refinances. Lenders must be approved by Fannie Mae to offer this product. Mortgage Equity Partners had to go through a rigorous application process to be approved to offer HomeStyle Renovations Loans, which includes; demonstration of strong operational controls and proven experience in the renovation market.
If the bidding war is getting you down, maybe a Homestyle Renovation Loan could be the answer. If you can’t buy your dream home, create it!
Contact us at 877-866-4511.
Mortgage Equity Partners in licensed in MA/NH/ME/FL/GA. NMLS#1936.
A new home is possible with only 3% down!
The ideal borrower would have a high credit score, an income that more than justifies the loan, a long, stable employment history, and enough reserves to cover several months of mortgage payments. Obviously, that doesn’t describe everyone. The only option used to be an FHA loan, but that has changed.
An excellent alternative to FHA loans, the Freddie Mac Home Possible and Home Possible Advantage Mortgage are responsible low down payment options for first time home buyers, as well as, low and moderate income borrowers looking to purchase in high-cost or under-served communities.
Home possible loans provide an opportunity for borrowers with limited savings to purchase a home. Borrowers with good credit and the ability to pay closing costs can purchase a home without having to save for years to put together the 20 percent down payment.
Home Possible loans only require a 3% down payment, and the borrowers can use gifts from parents, grants, savings and other sources.
Credit score requirements vary but can range from 620-680 for a single family owner-occupied property.
Like an FHA loan, you will be required to pay for private mortgage insurance, but the rates are extremely affordable for the Home Possible programs, and you can have the PMI canceled once you have built 20% equity in your home.
These programs also require that first time buyers fulfill a homeownership education requirement which can be satisfied by taking a free online tutorial.
Home Possible and Home Possible Advantage are secure programs that open the door to homeownership for responsible, deserving buyers while still maintaining strict underwriting guidelines. Mortgage Equity Partners has partnered with FreddieMac to offer these exciting new programs.