Unless you haven’t been paying attention to the real estate market lately, you know that sales of homes are hotter than a July afternoon.
Prices are rising, interest rates are attractive, and the number of available homes on the market is at historically low levels. Unfortunately, if you are a looking to buy a home, it probably isn’t as easy as you’d think.
Looking to live along the line and you want to find a single family home for less than $200k? Be ready to act fast. Along the entire 20 miles of the Phoenix light rail line, there are only 26 single family homes for sale at or below $200k within ( approximately ) 1/2 mile of a light rail station. If your budget is $100k, you have a whopping 9 to choose from. ( as of this morning, per the local MLS system )
Like home sales across much of the valley right now, competition for homes along the line is fierce. Many homes sell quickly and for above the asking price. Yes, above the asking price. You aren’t paying cash? It gets even harder.
First time home buyers hit hard.
It’s tough to compete when buying a home for the first time. Savvy investors and move-up buyers may have been around the block a time or two. Even well-qualified FHA buyers with a co-signer can get their offer snubbed by a seemingly more attractive cash offer or a conventional buyer with a boatload of cash to put down. Are you a veteran trying to do a $0 down loan? I feel your pain.
Any help on the horizon?
After the mortgage meltdown, many down payment assistance programs were quickly swept under the very dirty rugs laying around some fat-cat bankers’ offices. Now that the dust is beginning to settle a bit, there is talk of bringing back the Home in 5 Advantage program.
Now called Home in 5 Advantage, here are the highlights:
- 5% down payment assistance. Assistance is calculated as 5% of the initial principal balance of mortgage loan.
- 30 year Fixed Rate Home Loan. Interest Rate (set by IDA) currently 3.875% **The interest rate may change periodically to stay competitive with the market**
- This is a grant, so no repayment is required.
- Eligible loan types: FHA, VA, or USDA-Rural
- Minimum 640 credit score
- Maximum of 45% debt to income ratio
- There is no First Time Homebuyer Requirement
- Maximum qualifying income of $90,000
- No maximum home purchase price (subject to income and debt ratios)
- Important for Military (Qualified Veterans, Active Duty Military, Active Reservists, Active National Guard)
- Down Payment Assistance is increased to 6%
- No income restrictions