Home Partners of America

The problem the business is here to solve:  Fannie Mae requires a 4 year seasoning period since last bankruptcy;  FHA requires a 3 year seasoning period since Short Sale; and Freddie Mac doesn’t even tell you how long you need to wait (guidelines state “Determined by [automated underwriting system]”…which basically means, wait a while, then maybe you’ll get approved.  The problem isn’t necessarily that there are seasoning requirements between buying a home and major credit hits, the problem is that by the time these seasoning requirements are met, home prices are drastically different in some metropolitan areas to the point where those homebuyers now can’t afford to buy anything, and become stuck in rental purgatory.   For example, in the last two years alone, home prices in Seattle have risen 42.5% (from July 2014 to July 2016).  A would-be homebuyer is drastically behind the curve if they are forced to wait on the sidelines to meet mortgage seasoning requirements while the housing market passes them by.    

The solution:  Home Partners of America.  What HPA does is essentially buy the house upfront, then lease it back to the clients for up to 5 years.  They guarantee rent won’t rise more than 3.75% annually, and over the course of those five years, the tenant can buy the house for a pre-set price which slightly increases annually – in Seattle it’s 5% per year.  That 5% appreciation rate is a FAR cry from what housing is actually appreciating at here in Seattle, but yet it’s also a high enough return given the risk that it makes a business like this viable, and attractive to investors. 

Home Partners has grown incredibly fast over the last few years mainly due to its ethics.  It’s a straight forward lease to own business that doesn’t take advantage of clients like some other companies in this industry have done in the past.  The company now operates in 38 markets across the nation, and owns around 5,000 houses (about 250 in Seattle).  It might be the best option for someone waiting to meet their seasoning requirement before they can be approved for a mortgage, but it’s definitely one worth knowing about.  Read more about HPA here:  http://www.bizjournals.com/seattle/news/2016/08/23/ex-goldman-sachs-execs-new-company-helps-kent.html

Happy Investing!

Today's blog courtesy of Kyle Bergquist, Guild Mortgage

MCC Tax Credit

Mortgage Credit Certificates Are Not Mortgages
   
 An MCC is a tax
credit which means fewer tax dollars can be withheld from your regular paycheck,
increasing your take-home pay.  The lender can use the credit to help increase
your buying power up to an additional 10%.

MORTGAGE CREDIT CERTIFICATE ELIGIBILITY
REQUIREMENTS

Available With New Purchase Loans

Must Be First Time Home Buyer (Not Owned A
Home In Previous 3 Years) Unless Purchasing In A
Targeted Area

Recapture Tax Applies

Income and Acquisition Limits Based On Family Size

Owner Occupied

WSHFC Home Buyer Education Required

Must Work With WSHFC MCC Participating Lender

Cost is $657.50

Can Be Renewed On A Refinance for $375.00 Fee

FHA Can Be Used As A Deduction From Monthly
Payment Qualifying For More Home

FNMA/VA/USDA Used As Income To Qualify For More
Home

Recapture Tax:

** Applies to the WSHFC Mortgage Credit Certificate program
only

Recapture only applies if all 3 of the following occur:

Your home is sold or disposed of within 9 years of
being purchased, for reasons other than your
death;

There is a capital gain on the sale of your home,
AND

Your household income for the year in which you
sell your home exceeds federal recapture tax
limits. See your lender for current limits.

Happy Investing!

Today's blog courtesy of Cheryl Taylor, American Pacific Mortgage