FHA Condo Buyers Beware

In the Denver metro area a trend, that is further depressing home sales, is the increased standards required for a condominium project to have Federal Housing Administration (FHA) approval.  Thankfully, these standards do not currently apply to townhomes.  Astute real estate agents will verify the exact status of what appears to be a townhome, however some townhomes have a condo legal description which makes it fall under FHA rules for a condo.  Not a good situation to see a buyer pay for an inspection and appraisal, then find out that the buyer is approved, but the property is not.

One recent study showed that only one third of the condominium developments in the Denver area were eligible for FHA financing because of the more stringent requirements.  In Commerce City the situation is even more depressing, with only one out of fourteen condo developments being approved.  As FHA financing is by far the most common option for buyers under $200,000, this presents a real challenge for sellers.

 We should remember that if FHA financing is not an option, buyers have other choices such as VA loans, conventional mortgages, AND portfolio products. While VA and FHA mortgages are both government loans, the standards for FHA condominium projects are much higher than for VA loans.  Keep in mind that because a project is not FHA approved does not always mean it is ineligible for VA financing.  Portfolio products are mortgages that a lender keeps in their own portfolio and do not sell on the secondary market.  Hence the lender has more flexibility in designing qualification standards. Portfolio products,in most cases, will have higher borrower standards such as credit score, down payment, etc, but they are a viable option.

It is always wiae to make sure your agent has vrified that theproject qualifies if your are using FHA financing.

Remember if it looks like a townhouse it may not be a townhouse!

 This information was probvide to me by mylender Chip allen

Your Agent for life.

Joe Capra

Reverse Mortgage

My mortgage lender send this to me today. I feel it is important to pass along to my email list. If you have ever had any idea of using a reverse mortgage please give me call. It cost nothing to inquire and get your questions answered. Thanks, Joe Capra.
The following is from Chip Allen, Loan officer.

Wells Fargo recently announced they would no longer originate Home Equity Conversion Mortgages, more commonally known as a reverse mortgage. This comes on the heels of a similar announcement by Bank of America a few months ago. Wells Fargo and Bank of America were the two top lenders for reverse mortgages nationwide. Obviously, the unpredictability of housing prices and the increased longevity of borrowers had a major impact on the decision.

A Home Equity Conversion Mortgage works in reverse of a typical mortgage because the homeowner receives either a lump sum or a monthly payment from the mortgage holder. The balance accrues and is not due until the death of the borrower or they move out of the house. Borrowers are still responsible for taxes and insurance on the property, and must be 62 or older to qualify.

Reverse mortgages are still available and a wonderful choice for homeowners who are equity rich and cash poor. I have never advocated reverse mortgages for homeowners who did not need the money but thought it would be neat to get a check from the bank every month. They still are available for either purchase or refinance, but the handwriting is on the wall.

Let me know if you are considering a reverse mortgage, and we will see if it is a good choice considering your unique personal situation. Time is not your friend in this situation. As always if you snooze, you loose.

Thanks, Chip

Investors! Important Information! must read!

Good Time to be a Landlord
May 24, 2011
Rachel Brand bought a house in Aurora as an investment in February and had it rented by mid-March. It’s already cash flowing, with the monthly rent about $540 a month more than the mortgage amount.
Rental Home Vacancies at Record Low
May 24, 2011
Rental housing vacancies in the Denver area have fallen to a record low of 1.4 percent, according to a first-quarter state report released today. Vacancies for rental condos, single-family homes, and other small properties across metro Denver fell from 3.1 percent in the first quarter of 2010, shows the report from the Colorado Division of Housing.
May 25, 2011.
We are actively looking for interested partners to invest with us on several deals we have in our pipe line. Anyone who wants more information about becoming an debt or equity partner, contact me direct at 303-877-1976. I’ll be more that happy to meet with you and explain our program.
Remember we find lucrative real estate deals for our partners so that we can make consistent and safe profits.
Joe Capra
Joe Capra Realty, Metro Brokers
Off: 303-988-7771
Dir: 303-877-1976

The Real Estate Investing Game!!!

There are several way to enter into the Real Estate investing game. the tradirional way is to find the right property, that is one that makes financial sense, emotional dicision should not be a factor, put 20% down and finance the other 80%.
Another way is to find a property up to four units and use a FHA 203 loan or if you want to make improvements are repairs you can use a 203K loan. Under the FHA programs you must use one of the units as your primary residence. If you are interested in more than four units there are ways to purchase with owner carries, 85% downs, seller repair credits used for down payment. There are many ways to finance your project. Creative financing is any idea you can negotiate with a seller.
You may want to do a joint venture having a partner can be very profitable. If you have an interest in learning more give me a call and I will be more that happy to meet with you and discuss your possibilities.

Real Estate Syndications!

Real state syndications can be created in several ways using several different tyoes of entities.
we are presently working on putting together an entity that is know as a Joint Venture where the partners will be equity partners, in other words each partner will contribute to the joint venture and at the completion of the venture each partner will share in the profits, this maybe a 50/50 split or any combination of splits as spilled out in the joint venture based on the participation of each partner. Eg: two partners each receiving 50/50. Cost of project $100,000 sale of project $150,000 each partner would receive $25,000. On some offers we maybe looking for debt partners, these partners put up money invetments for a guaranteed return for a specified time period. it may be 6months to 1yr or more. this type partner does not share in a split of the profits they make their return on the interes their money earns and the length of time their money is used. EG: $100,000 investment at 8% would earn that partner 108,000 at the end of the year a $8,000 profit. This profit would be constant and not depending on whether the project was a success. We will be using Land Trust, LLC, S-corps, self directed IRAs, and Joint Ventures. To find out more and to answer any of your questions contact Joe at 303-877-1976 or by email Jcapra@comcast.net.