HUD’s Charge of Discrimination reveals troubling details about the appraisal process, highlighting inaccuracies and methodological deviations that led to a significantly lower property value. This undervaluation subsequently resulted in the denial of the homeowner’s refinance loan application. Diane M. Shelley, HUD’s Principal Deputy Assistant Secretary for Fair Housing and Equal Opportunity, stated, “Homeownership is crucial to build both generational wealth and housing stability for Black and Brown families.” As the case proceeds, it underscores the ongoing challenges in ensuring equity in housing and the importance of vigilance against discriminatory practices in real estate transactions.
Joel Kan, MBA’s Vice President and Deputy Chief Economist, attributed the rising rates to the Federal Reserve’s cautious stance on adjusting policy amidst persistent inflation and resilient economic indicators, including strong employment data. Despite the unfavorable rate environment, the demand for refinancing, especially VA refinancing, remained robust.
Other notable trends include a decrease in average loan sizes, with purchase loan sizes—often viewed as a proxy for home prices—dropping to $449,400 from $453,000. Additionally, there was a shift in the composition of mortgage applications, with increases in FHA and VA loan shares.
So, what explains the rising number of homeowners refinancing their mortgages even with rising mortgage interest rates? There are numerous reports indicating that many homeowners across the country are becoming cash-strapped and having a difficult time paying bills, thus resorting to pulling out equity from their homes, even if it means accepting a higher interest rate. I’ve also observed reports indicating that consumer credit card debt is at historically high levels, with interest rates on this debt being astronomical. This situation is prompting people to refinance their home loans again, even at higher rates, because even though their mortgage may be at a higher rate, it still appears to be a bargain compared to the 27 or 28% on a credit card. I haven’t seen enough verifiable data to confirm if either of these situations is true, but both are plausible.
One of the issues receiving significant attention following the announcement of the REALTOR® commission suit settlement is the topic of buyer commissions, specifically regarding whether a buyer has to pay them and how lenders will treat the commissions.
In a recent letter to the Federal Housing Finance Agency (FHFA), Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac, NAR and MBA sought confirmation on the treatment of buyer agent commissions following a proposed settlement agreement in the Burnett et al and Moehrl et al cases.
What does this mean for homebuyers? Under the settlement, cooperative commissions will no longer be displayed on Multiple Listing Services (MLS), but listing brokers and sellers will still be able to offer compensation for buyer broker services through other means. Additionally, the settlement does not prohibit home sellers from paying buyer agent commissions directly.
NAR and MBA believe that FHA and Government-Sponsored Enterprise (GSE) policies should continue to exclude seller or listing agent payments of buyer agents’ commissions from Interested Party Contributions (IPCs). IPCs are concessions from the seller to the buyer for items traditionally paid by the buyer, such as loan closing costs or rate buy-downs. Maintaining this practice is essential to ensure that the flow of mortgage capital to homebuyers remains uninterrupted.
As a homeowner or potential buyer, it’s important to stay informed about these developments and how they may impact your buying or selling process. NAR and MBA have requested confirmation from the FHFA, FHA, Fannie Mae, and Freddie Mac as soon as possible to prevent any confusion and potential disruptions that may cost you money or even jeopardize your home purchase.
In a recent interview with CNBC, Traci Casper, the President of the National Association of Realtors (NAR), shared her views on the current state of the housing market and the implications of recent commission lawsuits. Her remarks provide an insight into the challenges and changes shaping the real estate industry, particularly relevant for the St. Louis market.
Casper highlighted the impact of fluctuating mortgage rates on the housing market, mentioning, “We do have still such a pent-up buyer pool that’s just been waiting on the sidelines… we are starting to feel them come back in.” This observation reflects the interconnectedness of mortgage rates and buyer activity, a significant factor in real estate market dynamics.
Regarding the commission lawsuits, Casper spoke about the potential effects on buyers and sellers. She explained, “Our buyers are already struggling to come up with a down payment… We don’t want to see is the marginalization of those buyers.” This statement is in line with the NAR’s consistent message suggesting that lower-income buyers might be negatively impacted if sellers stop paying buyer agent commissions. I counter Casper’s position, highlighting the disagreement within the industry. Many argue that buyers are indirectly paying the commission since it is generally factored into the home’s selling price. If the payment structure shifts to where buyers directly pay the commission, this could lead to a decrease in the seller’s price, as they would no longer bear this cost. This change might not increase the overall cost to the buyer, but it could affect sellers’ pricing strategies. Additionally, I believe that lenders will adapt to these changes. Institutions like Fannie Mae, Freddie Mac, FHA, and VA are likely to revise their policies to allow commissions paid by buyers to be included in closing costs, counted as part of the down payment, or financed.
As we observed yesterday, there’s been a significant shift in the mortgage landscape. The interest rate for a 30-year fixed-rate conventional mortgage fell to 6.62%, the lowest since May 12, 2023, when it stood at 6.55%. This decrease might signal a turning point in the housing market, especially considering the erratic rate movements we’ve seen over the past several months.
More encouraging news comes from the FHA sector, where the 30-year fixed-rate dropped to 6.13%, marking its lowest since May 11, 2023, when it was 6.12%. These recent figures hint at a trend that could reignite buyer interest and energize market activity, a positive shift from the higher rates experienced recently.
This change in mortgage rates is particularly significant! For prospective buyers, this dip in rates opens a more favorable door, potentially making homeownership more attainable than in the recent past. Sellers have reasons to be optimistic too, as lower rates could lead to increased market interest and activity.
Below is a chart illustrating the history of mortgage interest rates. This visual representation provides a clearer perspective on the recent changes and what they mean for our market.
As of yesterday, the mortgage landscape has seen a notable shift, with the interest rate for a 30-year fixed-rate conventional mortgage dropping to 7.13%, marking the lowest point since September 1, 2023, when it was 7.08%. This recent decrease offers a glimmer of hope in the housing market, especially considering the turbulent fluctuations witnessed over the past months.
Equally promising is the rate for 30-year fixed-rate FHA loans, which as of yesterday stood at 6.5%, again the lowest since September 1, 2023, when it recorded a rate of 6.45%. These latest figures suggest a trend that could lead to revitalizing buyer interest and market activity, a welcome change from the higher rates experienced in the recent past.
This positive turn in mortgage rates is particularly significant for markets like St. Louis, where the real estate dynamics are closely tied to these financial trends. For buyers, the dip in rates presents a more favorable scenario, potentially making home ownership more accessible than it has been in recent times. Sellers, too, might find reasons to be optimistic, as lower rates could translate to increased market interest and activity.
The chart below illustrates the history of mortgage interest rates, offering a clearer perspective on the recent changes and their implications.
Mortgage Interest Rates (interactive chart)
(click on chart for live, interactive chart)
The real estate market has always been sensitive to interest rate changes, and the current shift could be the beginning of a more encouraging phase. Whether this trend will continue remains to be seen, but for now, it offers a much-needed respite and a reason for cautious optimism in the housing market.
With changing regulations, subdivision restrictions, municipal ordinances, state and federal laws, landlords certainly have a lot to keep up with today to make sure they stay compliant in their rental business. I’ve been in the business over 40 years, have an interest-and a fair understanding of- laws that affect real estate, yet still find it challenging to stay updated. Given this, I can only imagine the challenge faced by someone with a full-time career who also owns rental properties as an investment. Perhaps, this might be a compelling reason to consider hiring a professional property manager for your rentals. However, that decision brings its own complexities, which I’ll delve into in a future article.
A recurring issue for landlords, which prompts many questions from agents in our firm, clients, and other landlords, revolves around service animals. The question is usually framed something like, “I don’t want any pets in my rental properties, so I have a strict no-pet policy but am I obligated to allow dogs or other pets if the tenant claims it’s a ‘service animal’?” Before I go further, let me remind you, I am not an attorney, this isn’t legal advice—in fact, it’s not advice at all. I’m merely sharing what I’ve learned on the topic to heighten awareness of the issue and to encourage those that are not familiar with it to learn what they need to learn or to seek out proper legal guidance to avoid problems.
The State of Missouri received $138 million from the U.S. Treasury’s Homeowners Assistance Fund (HAF) and are using those funds to help qualified homeowners that are struggling to make their house payments. Missouri State Assistance for Housing Relief (SAFHR) is responsible for paying out these funds to help individual homeowners.
Who is eligible for assistance from SAFHR?
According to the SAFHR program guidelines, to qualify for SAFHR for Homeowners assistance, an individual or household must:
- Earn no more than 150% of the area median income for the region where the property is located, as set forth in the HUD income guidelines for the St Louis metro area.
- Have suffered a COVID-19 pandemic-related hardship that began on or after January 21, 2020, such as a loss of income or increase in household expenses related to the pandemic.
- Require assistance with mortgage arrearage.
There are also 5 questions that, can answer “yes” to all of them, you are encouraged to submit an application to receive Missouri State Assistance for Housing Relief (SAFHR) funds:
- Has your household experienced a financial hardship related to the COVID-19 pandemic since January 21, 2020?
- Are you a current resident of Missouri?
- Is the property you are seeking assistance for located in Missouri?
- Do you live on the property (primary residence) for which assistance is being requested?
- Do you have a mortgage on your home?
How do I apply for Missouri State Assistance for Housing Relief (SAFHR)?
Well, if you appear to be eligible for assistance, the next step would to to register on the SAFHR site and complete an application. To access the registration form on the SAFHR site click here.
Mortgage Assistance Counseling is available as well.
As part of the SAFHR program, the Missouri Housing Development Commission (MHDC) has partnered with Mortgage Assistance Counseling agencies across the state of Missouri. These agencies can help you complete your application for the SAFHR for Homeowners Program as well as help connect you with other services to avoid foreclosure. To access the list of Mortgage Assistance Counseling agencies in Missouri, including the Missouri counties they serve click here.
Today, the U.S. Department of Housing and Urban Development (HUD) announced a reduction in the mortgage insurance premium charged to borrowers on FHA loans. The mortgage insurance premium is a charge over and above the interest on the loan that is the fee to HUD for insuring the loan. Currently, the FHA mortgage insurance premium varies from 0.45% to 1.05% of the loan amount depending upon the loan term (15 or 30 years) and the LTV (loan to value). Effective with FHA mortgages endorsed for insurance by FHA on or after March 20, 2023, the rate will be reduced by 0.30% across the board.
The table below shows the current charges for FHA mortgage insurance premiums for various loan terms and LTV’s as well as what the new charges will be. On an FHA loan amount of $265,000 a borrower will have a monthly payment that is about $66.00 lower as a result of the reduction in mortgage insurance premiums.
FHA Annual Mortgage Insurance Premium (MIP) – Current Rates vs. New Rates
(click on table to see complete HUD press release)
This week the Federal Housing Finance Administration (FHFA) announced that the limits for all conforming home loans to be acquired by Fannie Mae and Freddie-Mac (most of the conventional home loans originated) will increase to $726,200 on January 1, 2023. This is an increase of $79,000 for the current loan limit of $647,200.
Also this week, the Federal Housing Administration (FHA) announced that the limits for all FHA loans will increase to between $472,030 and $1,089,300 for single-family homes depending on the area the property is located in. Below are the limits for the low cost mortgage areas as well as high-cost mortgage areas:
Low Cost Area: (The entire state of Missouri falls into this category)
-
- One-unit: $472,030
- Two-unit: $604,400
- Three-unit $730,525
- Four-unit: $907,900
High Cost Area:
-
- One-unit: $1,089,300
- Two-unit: $1,394,775
- Three-unit 1,685,850
- Four-unit: $2,095,200
The Veteran’s Administration, as of 2020, removed the lending limit for veteran’s with full entitlement so there remains no limit on VA loans.
[xyz-ips snippet=”Traci-Everman—FHA-VA-Loan-Specialist”]
According to the latest data from HUD and the US Census Bureau, there is a 9.3 month supply of new homes for sale in the U.S. as of June, 2022. As the chart below illustrates, this is the largest supply of new homes for sale since May 2010 when there was also a 9.3 month supply. It wasn’t that long ago, August 2020 to be exact, when the supply hit a record low level of 3.3 months.
St Louis New Home Supply is a little lower…
It’s a little hard to pinpoint the new home supply in St Louis for several reasons. One, not all new homes that are for sale are listed in the MLS and then the MLS allows new homes to be listed in two categories, both new construction and normal residential, so that can skew the data as well. Nonetheless, we do the best we can to sort through the data. As our table at the bottom shows, there is currently a little over a 7-month supply of new homes for sale in St Louis, so still higher than a historical “norm” but about 2-months less than at the national level.
Continue reading “Supply of New Homes For Sale Reaches Highest Level In Over 12 Years“
After hitting the highest rate in over 13 years just two weeks ago at 6.28%, as the chart below shows, mortgage interest rates on 30-year fixed mortgages declined today to 5.75%. The likelihood of interest staying under 6% is hard to to say at this time but I would say enjoy it while it lasts!
Mortgage Interest Rates – 30 and 15-Year Conventional Loans, FHA Jumbo and and 5/1 ARM Loans
Given the low-inventory of homes for sale that has existed for some time now, it may be hard to believe my next statement, but the latest data from the U.S. Census Bureau and HUD show that there is currently a 9-month supply of newly constructed homes in the U.S. As the chart below illustrates, this is the highest level the supply of new homes in the U.S. has reached since May 2010 when there was a 9.3 month supply.
The months supply of depicted below is calculated as the ratio of new homes for sale to the number of new homes sold. The resulting number represents the number of months it would take for the current new home inventory that is for sale to be depleted given the current sales rate if no new additional new homes were built.
Months Supply of New Homes In The U.S.
(click chart for live, interactive chart)
Mortgage interest rates were at 3.667% for a 30-year fixed-rate loan as of this past Thursday, January 13, 2022. As the chart below illustrates, after dipping slightly the week prior, the rates this most recent week hit the highest level in over a year.
Mortgage rates for an FHA mortgage also hit the highest level in over a year too with rates hitting 3.743%.
Mortgage Interest Rates – 30 Years Conforming Conventional Loan -Past 12 Months
(click on chart for live, interactive chart and other loan types)
Mortgage Interest Rates – 30 Year FHA
(click on chart for live, interactive chart and other loan types)
As the charts below illustrate, at the beginning of this year, mortgage interest rates for a 30-year conforming conventional loan were at 2.771%, FHA loans were at 2.703%, and VA loans were at 2.372%. As of yesterday, those rates have increased to 3.357%, 3.468%, and 3.101% respectively.
While conforming 30-year conventional loans have seen an increase of 21% in rates (from 2.771% to 3.357%), FHA loans have seen an increase of 28% (from 2.703% to 3.468%) and VA loans have seen an increase of 30% (from 2.372% to 3.101%).
What does this mean in terms of the cost of a home?
To make the comparison simple, I’ll just base my comparison on the price of a “typical” home in the St Louis 5-county core market using the median price of homes sold in October which was $234,900. Downpayments will vary based upon loan type from no downpayment being required on a VA loan, to a minimum of 3% on a conventional and 3.5% on an FHA but based upon a loan amount equal to the median price of $234,900, below are the differences in the monthly payment on that amount by loan type from the beginning of this year until now:
- Conventional – $948 to $1,023
- FHA – $939 to $1,038
- VA – $898 to $990
If we factor in the increase in home prices, it gets worse.
In the “to add insult to injury” category, home prices have increased significantly since January as well, In January the median price was $215,000, so between then and October the median price of a St Louis home increased 9.2%. With the interest rates increasing at the same time the cost of a typical St Louis home increased fairly significantly as shown below:
- Conventional – $867 to $1,023 (+18%)
- FHA – $859 to $1,038 (+21%)
- VA – $821 to $990 (+21%)
The moral of the story…don’t wait to buy.
While I certainly can’t predict the future, especially given all the uncertainty in our economy with inflation, employment issues, etc, if I were in the market to buy a home I don’t think I would wait “until things get better”. The reason for my opinion is, as I’ve illustrated here, the true “cost” of a home (assuming you are not paying cash for it) is a combination of price and interest rate. So, even if home prices see an adjustment or the seasonal dip we often see during winter if interest rates continue to rise, is the higher cost of borrowing going to offset the lower price? I think that is a possibility. Or, the flip side, if interest rates go down but then prices go up, is the savings in lower rates lost?
To benefit from waiting, in terms of the cost of the home, we would need interest rates to stay the same, or decline and home prices to decline or interest rates to drop and home prices stay the same. Right now I don’t see either of the two aforementioned scenarios likely to happen.
Continue reading “Mortgage Rates Have Increased Significantly This Year“
There were a total of 550 home sales in the St Louis 5-County core market during the 12-month period ended August 31, 2021, a decline of over 90 percent (90.5%) from the same period 10 years earlier. As the chart below (available exclusively from MORE, REALTORS®) illustrates, the St Louis distressed home sales 12-month trend peaked in May 2013 with 6,078 distressed home sales in the prior 12-month period and has fallen to just 550 distressed home sales for the 12-month period ended August 31, 2021. For the purposes of this report, distressed home sales include the sale of homes previously foreclosed on and being sold by banks or a government entity (such as FHA/VA) and short sales. Given that there has been a foreclosure moratorium in place for several months during the past year it’s not surprising the current trend is down but as the chart shows, the trend has been steadily downward since late 2013.
[xyz-ips snippet=”Foreclosures-For-Sale-and-Homes-For-Sale”]
St Louis 5-County Distressed Home Sales – 01/01/2011 – 8/31/2021
(click on chart for live, interactive chart)
According to a report just released by the Consumer Financial Protection Bureau (CFPB), titled “Housing insecurity and the COVID-19 pandemic“, there are over 2 million homeowners that have fallen behind at least three months on their mortgage payments. This represents a 250% increase from pre-Covid-19 levels and is now at a level we haven’t seen since the height of the Great Recession in 2010.
Homeowners with an FHA mortgage delinquency rates double rate for all loans:
As the chart below shows, homeowners with an FHA mortgage hit a serious mortgage delinquency rate of 10.8% during the 3rd quarter of 2020, with the rate for all mortgages was just under half that at 5.2%.
Serious Mortgage Delinquency Rate By Loan Type- Q1 2005 – Q3 2020
[xyz-ips snippet=”Homes-For-Sale”]
Today, as we celebrate the life of Dr. Martin Luther King, Jr. who is best known as a leader in the Civil Rights movement, I wanted to look at how his efforts also ultimately resulted in the Fair Housing Act, which sought to end discrimination in housing.
Through the efforts of the civil rights movement, Dr. King and others were able to get the attention of our nation resulting in President John F. Kennedy, in a nationally televised address on June 6, 1963, urging the nation to ” take action toward guaranteeing equal treatment of every American regardless of race.” Shortly after his address to the nation, President Kennedy proposed that Congress consider civil rights legislation that would address rights in many areas such as voting, public accommodations, school desegregation but not housing at the time. Even though President Kennedy was assassinated on November 22, 1963, his efforts beforehand still resulted in the Civil Rights Act of 1964 when, then President, Lyndon Johnson, signed into law on July 2, 1964.
The Civil Rights Act of 1964 prohibited discrimination in public places, provided for integration of schools, and made employment discrimination illegal, however, it did not address housing.
Four years later came the Civil Rights Act of 1968, which is also referred to, and more commonly known, as the “Fair Housing Act of 1968″, which expanded the original civil rights act to include prohibiting discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin or sex. President Lyndon Johnson signed the Fair Housing Act into law on April 11, 1968, one week after Dr. Martin Luther King, Jr. was assassinated.
Fair Housing Resources:
Yesterday, I shared information about forbearance options available to borrowers with an FHA loan that has been impacted by the COVID-19 pandemic. Today, the Consumer Finance Protection Bureau released a very informative video titled “CARES Act Mortgage Forbearance: What You Need to Know” which is below. This video contains a great explanation of what forbearance is, how it works and how to request it on your mortgage.
[xyz-ips snippet=”Homes-For-Sale”]
As a result of the COVID-19 National Emergency Servicing and Loss Mitigation Program declared by President Trump, the U.S. Department of Housing and Urban Development (HUD) sent a letter yesterday to its loan servicers making them aware of new COVID-19 National Emergency Loss Mitigation Options. HUD told the lenders that the new options for borrowers go into effect immediately but the lender must implement them no later than April 30, 2020.
Highlights of the new forbearance plan:
- The Mortgagee (lender) must not deny COVID-19 National Emergency Home Retention Options to Borrowers that experience an adverse impact on their ability to make on-time Mortgage Payments due to the COVID-19 National Emergency and satisfy the loss mitigation criteria set forth in this section.
- (A) Forbearance for Borrowers Affected by the COVID-19
National Emergency If a Borrower is experiencing a financial hardship negatively impacting their ability to make on-time Mortgage Payments due to the COVID-19 National Emergency and makes a request for a forbearance, the Mortgagee must offer the Borrower a forbearance, which allows for one or more periods of reduced or suspended payments without specific terms of repayment. - The initial forbearance period may be up to 6 months. If needed, an
additional forbearance period of up to 6 months may be requested by
the Borrower and must be approved by the Mortgagee.
The term of either the initial or the extended forbearance may be
shortened at the Borrower’s request
.
(B) COVID-19 National Emergency Standalone Partial Claim
The Mortgagee must waive all Late Charges, fees, and penalties, if
any, as long as the Borrower is on a Forbearance Plan.
- (A) Forbearance for Borrowers Affected by the COVID-19
For any homeowners with an FHA loan that are struggling to make their house payments, they should contact their loan servicer to see if they are eligible for relief under this plan.
In response to the coronavirus pandemic, the U.S. Dept. of Housing and Urban Development (HUD), as well as the Federal Housing Finance Agency (FHFA) (which oversees Fannie Mae and Freddie Mac), directed their loan servicers to suspect foreclosures and evictions for at least 60 days to help those people affected.
In a statement, Mark Calabria, the Director of the FHFA, said that borrowers affected by the coronavirus who are having difficulty paying their mortgages should reach out to the mortgage servicers as soon as possible.
HUD Secretary Ben Carson said that “The halting of all foreclosure actions and evictions for the next 60 days will provide homeowners with some peace of mind during these trying times,”
Today, as we celebrate the life of Dr. Martin Luther King, Jr. who is best known as a leader in the Civil Rights movement, I wanted to look at how his efforts also ultimately resulted in the Fair Housing Act, which sought to end discrimination in housing.
Through the efforts of the civil rights movement, Dr. King and others were able to get the attention of our nation resulting in President John F. Kennedy, in a nationally televised address on June 6, 1963, urging the nation to ” take action toward guaranteeing equal treatment of every American regardless of race.” Shortly after his address to the nation, President Kennedy proposed that Congress consider civil rights legislation that would address rights in many areas such as voting, public accommodations, school desegregation but not housing at the time. Even though President Kennedy was assassinated on November 22, 1963, his efforts beforehand still resulted in the Civil Rights Act of 1964 when, then President, Lyndon Johnson, signed into law on July 2, 1964.
The Civil Rights Act of 1964 prohibited discrimination in public places, provided for integration of schools and made employment discrimination illegal, however, it did not address housing.
Four years later came the Civil Rights Act of 1968, which is also referred to, and more commonly known, as the “Fair Housing Act of 1968″, which expanded the original civil rights act to include prohibiting discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin or sex. President Lyndon Johnson signed the Fair Housing Act into law on April 11, 1968, one week after Dr. Martin Luther King, Jr. was assassinated.
Fair Housing Resources:
Dr. Martin Luther King, Jr. resources and information…
The maximum loan amount for an FHA-Insured home loan on January 1, 2020, will increase from $314.827 to $331,760 for a single-family home purchased in the St Louis metro area. FHA insured home loans have lower credit standards than a typical conventional loan, require a downpayment of just 3.5% and allow all of the purchasers closing costs to be paid by the seller (up to a limit) thereby extending the opportunity of homeownership to a wider audience.
Below are all of the FHA Mortgage Limits for the St Louis MSA for 2020:
- One-Family dwellings – $331,760
- Two-Family dwellings – $424,800
- Three-Family dwellings – $513,450
- Four-Family dwellings – $638,100
To find out more about FHA home loans, or to get pre-approved for an FHA home loan click on the button below to connect with Mike McCarthy.
[xyz-ips snippet=”Mike-McCarthy—FHA-VA-Loan-Specialist”]
Buying a home for veterans will get a little easier come January 1, 2020, especially those veterans moving up to a more expensive home, as a result of the Blue Water Navy Veterans Act of 2019 signed into law by President Trump in June 2019. The primary focus of the Act was to provide disability benefits to veterans who served in Vietnam, it also made significant changes to the VA Home Loan benefit available to all veterans. The VA home loan changes go into effect on January 1, 2020. Below are highlights of the changes to the VA home loan benefit:
- Conforming Loan Limits – There will no longer be a limit, or cap, on the amount for a no-downpayment home loan to a veteran.
- VA funding fee increase – The VA charges a funding fee to support the VA home loan program. The fee is currently 0.15% for Veterans and Servicemembers and on January 1st will increase to 0.30%.
- Purple Heart – The VA funding fee will be waived for active Servicemembers who have earned a Purple Heart.
- Native America Direct Loan – As of January 1st, the existing cap of $80,000 will be removed for Veterans using their entitlement for a VA Native American Direct loan to purchase (or build) a home on Federal trust land.
To find out more about the changes to the VA home loan program, click on the button below to connect with Mike McCarthy,
[xyz-ips snippet=”Mike-McCarthy—FHA-VA-Loan-Specialist”]
A bill introduced by St Louis County Councilmember Lisa Clancy would require landlords in unincorporated St Louis County to participate in the Section 8 program as well as pretty much any other rental subsidy program. St Louis County bill number 102 (see complete bill at bottom of article), introduced by Councilmember Clancy, if passed, would amend the existing St Louis County “Fair Housing Code” ordinance adding “lawful source of income” to the list of things that a landlord cannot discriminate based upon.
The St Louis County Fair Housing Ordinance (section 717.020) currently makes it unlawful for landlords to discriminate on the basis of race, color, religion, national origin, gender, disability, sexual orientation, gender identity, or familial status. Currently included in the protected classes under St Louis County law, which are not included in the Federal Fair Housing Act, are “sexual orientation” and “gender identity”. In addition, St Louis County has “gender” as a class instead of “sex” as is in the Federal Fair Housing Act. If St Louis County Council bill 102 passes and becomes an ordinance, then “lawful source of income” will be an additional protected class and will be another one that is not in the Federal Fair Housing Act.
There are other municipalities, counties, and states around the country that have passed similar legislation as well. As to be expected, legislation like this has been met with a mixed response.
Is it discriminatory for a landlord to refuse to accept Section 8, Vouchers and the like? Continue reading “Proposed St Louis County Ordinance Would Require Landlords To Accept Section 8“
There were 37,721 homes sold in the St Louis metropolitan area during the past 12 months as reported by MORE, REALTORS. Of those, as the chart below illustrates, conventional financing made up the lion’s share of the sales. Conventional mortgages accounted for 18,967 home sales (50.3%), followed by cash transactions with no financing that accounted for 7,109 sales (18.9%), then 6,353 (16.8%) sales with FHA loans, 2,333 (6.2%) with VA loans, and 770 (2.0%) sales financed with USDA financing. The remaining 5.8% of the home sales were financed with one of roughly 30 other lessor popular financing methods.
St Louis MSA Home Sales By Financing Type – Past 12 Months
(Click on chart for live, interactive chart)
Date source: MARIS
The U.S. Department of Housing and Urban Development (HUD) just announced that they have filed a formal complaint against Facebook for violating the Federal Fair Housing Act by “allowing landlords and home sellers to use its advertising platform to engage in housing discrimination“.
Some of the ways HUD alleges that Facebook platform violates the Federal Fair Housing Act include:
- display housing ads either only to men or women;
- not show ads to Facebook users interested in an “assistance dog,” “mobility scooter,” “accessibility” or “deaf culture”;
- not show ads to users whom Facebook categorizes as interested in “child care” or “parenting,” or show ads only to users with children above a specified age;
- to display/not display ads to users whom Facebook categorizes as interested in a particular place of worship, religion or tenet, such as the “Christian Church,” “Sikhism,” “Hinduism,” or the “Bible.”
- not show ads to users whom Facebook categorizes as interested in “Latin America,” “Canada,” “Southeast Asia,” “China,” “Honduras,” or “Somalia.”
- draw a red line around zip codes and then not display ads to Facebook users who live in specific zip codes.
You can read the contents of the HUD complaint against Facebook here.
This is an example of why it is imperative that real estate agents, investors, landlords, and home sellers that choose to handle their own home sale know and understand the Federal Fair Housing Act including things that are prohibited under the Act. It never ceases to amaze me how many FSBO’s (for sale by owners) feel they are exempt from all housing laws and regulations just because they are not a real estate agent. I’m surprised as well by how many real estate agents really don’t fully understand it either and think things like what they do on Facebook is different than if done in a classified ad in a newspaper or just because a platform gives you the ability to do something (such as target just one sex) it makes it ok, which it obviously does not.
In any event, when it comes time to buy or sell real estate, I would encourage you to, first off, not try doing it on your own but use an agent, and then select an agent based upon he or she’s experience, qualifications and knowledge. A good starting point is here – “How To Choose A Real Estate Agent“.
The U.S. Department of Housing and Urban Development (HUD) announced last week that the Silver State Fair Housing Council, and ERGS, Inc., the owner/manager of four apartment complexes in Reno, Nevada, had reached an agreement to settle four Fair Housing complaints. Silver Lake State Fair Housing Council filed the complaints on September 20, 2016 against ERGS, Inc. alleging ERGS had violated the Federal Fair Housing Act by charging a pet deposit to tenants with service animals.
Under the settlement agreement, ERGS, Inc. must pay $20,500 to the Silver State Fair Housing Council as well as adopt written policies that are consistent with the Fair Housing Act and provide fair housing training for all employees who interact with tenants or applicants.
Under guidelines issued by HUD back in April 2013 it is very clear that, not only must a landlord provide reasonable accommodations to people with disabilities who required assistance animals, they must not treat the assistance animal as a pet and charge a pet deposit.
Disability-related claims are the most common type of Fair Housing complaint filed today, accounting for over 58 percent of the 4,9000 fair housing complaints filed last year.
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The U.S. Department of Commerce just released it’s 2016 CHARACTERISTICS OF NEW HOUSING in which it revealed features, amenities, prices, sizes, etc of new homes built and sold during 2016 in the United States. You can see all the data in the complete report for the U.S. by clicking on the link however I’m going to just focus on the homes built here in the midwest region.
There were 69,000 new homes sold (single-family) here in the Midwest Region of the United States, down from a peak of 205,000 in 2005. Eleven percent of the single-family homes sold were attached homes (8,000) and the remaining eighty-nine-percent (62,000) were detached homes, according to data from the U.S. Census Bureau.
Facts and Figures For New Homes Sold In The Midwest during 2016:
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2016 Characteristics of New Housing – Complete Report
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I am always marveled by great marketing and promotion therefore I must give a tip of the hat to Zillow® for their new “Instant Offer” program. First, it’s getting them tons of attention and press, particularly within the REALTOR® community, which is probably where it is the most beneficial to them since real estate agents are, after all, Zillows’® paying customers. Courtesy of Inman News, REALTOR.com and others, this new program has received the equivalent of thousands and thousands of dollars of free advertising, which is the type of thing I love and dream of getting this type of free publicity for my firm.
Instant Offer concept is not new…
So, why do I say it’s nothing new? I have nothing against Zillow® (although many in the REALTOR® community are not fans as they see them as a threat) however, I really don’t see anything “new” or revolutionary about their instant offer program. Basically, according to their website, what their program does is allows you to submit information on your home to them which then goes to a group of national investors who then submit you a cash offer for your home. Then, an inspection is done of your home (I’m guessing the offer is subject to this inspection being favorable) and if so, then you proceed to closing. Homes have been sold in this manner for decades, including right here in St Louis, so it’s nothing new. When I entered the real estate business here in St Louis in 1979, there were many “speculators” in St Louis, including the broker I worked for, that would make sellers a cash, as-is, offer on their home and would offer to close as fast as 24 hours. So, basically, the same thing as the “new” Zillow® instant offer program with a few exceptions including that our offers were typically unconditional (other than that the seller had good title), truly as-is and we were local, people the sellers could meet, talk with and establish a relationship with as they contemplated whether or not this approach to selling their home was a good decision. Over the years, I was involved in the purchase of over 2,000 homes in this manner right here in St Louis. Today, thanks to internet webinars, reality TV shows and just a wealth of information being readily available, there are many, many people, that, in addition to the established “professional investors”, out there trying to buy real estate in this manner.
Do you want an “instant offer” on your home?
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