Deanna Valeo

My Parents Need Help, How Can I Buy Them a House for 5% down? March 11, 2015

When It's Time To Give Back

Children can buy their parents a House for as little as 5% down
: There is a little known mortgage product that allows children to buy a home for their aging parents and get owner occupied rates as well: even if the house is right next door.  This Fannie Mae product also allows parents to buy the same way for physically or mentally challenged children.

Changes in demographics will drive the need for Millennial's and Gen Xer's to help their parents buy a home or contribute to their monthly living expenses.  Interest rates are low and home prices are growing many adult children are discovering the financial benefit of buying a home for their relocating parents as opposed to renting an appartment.

Often a financial need will drive a child's need to help a parent buy:

Baby Boomers do like independence and often want to stay in single family homes as long as they can, they are willing to down size when needed and many now want to relocate to where their kids live. Many will continue to work, often part time and yet because the 2008 recession, low savings rates and/or a major medical expense many will need help when it comes to housing.

Combine these facts with 4-Million+ baby boomers retiring each year and according to the Employee Benefit Research Institute only 24% of baby boomers have saved over $100,000 for retirement.  Many Millennials and Gen Xers are going to need to pick up the slack.

Charlotte is the second fastest growing major city in the United States:

In Charlotte we have seen a large growth of transplants to our city.  Charlotte's population grew over 40% from 2000 to 2010 according to the latest US census.  The Charlotte-Concord-Gaston NC-SC Metropolitan Statistical Area (MSA) is now over 2.3M in population (only 8.5% > 65 year of age). 

The growing population of young professionals in Charlotte will increase the demand for housing for their parents as they age.  Using Fannie Mae's special product we can help children meet the needs of their parents with very little money out of pocket, what we have seen adult chrildren are buying homes for parents who could not qualify for a purchase due to income limits (or credit issues).  The parents contribute to the housing expense and the kids have an investmet in real estate without having to put a10-25% down payment.  Overall it is a win-win for everyone. 

Charlotte Metropolitan Area
Are aging baby boomers abandoning the single family nest?
Charlotte quick facts from the US census:

97% NC Housing Finance Agency loans are great for any buyer March 17, 2015

The North Carolina Housing Finance Agency (NCHFA):  NCHFA offers a 97% conventional loan, with a 2% down payment assistance, leaving only a 1% down payment required from the buyer. Rates available at this link.

Video Example of $200,000 purchase with 3% Seller Paid Closing Costs: 

Here are the basics:

- 97% loan to value loan 
- 2%  down payment assistance (2nd Mortgage
           *this is actually 3% of the loan amount) available, for a minimum of 1% borrower contribution 
- 18% Mortgage Insurance coverage required this is a reduced Mortgage insurance rate ="lower" payment - - Maximum combined loan to value (CLTV) is 105%, as the loan can be combined with House Charlotte
- 640 minimum (mid) credit score (In the mortgage world we use FICO scores);
- $85,000 maximum borrower income (not household income);
- Up to 45% Debt to Income ratio  (find out more on Debt to Income Ratios here)
- 60 day locks are available;

Eligible properties:  Single family homes, Townhouses and modular homes qualify (No condominiums or manufactured homes);

Down payment assistance is treated as second mortgage and is fully forgiven after 15 years. The balance is deducted 20% per year from years 11-15.

In addition to this product they have a no down payment product; you can get 100% financing.  Call us and we can talk over all the options.  Our Goals is to get you the most cost effective new home loan!  :-) 

Contact us for more information on these loans.

Accessible | Product Knowledge | On-Time Closings

Deanna Valeo NMLS 91421 and Todd Croy NMLS 91428  Equal Housing Lender



Gifts, Condos and Foreign Assignment (Oh My!) March 23, 2015

Did you know a 5% gift (no funds of their own required) is okay for Conventional?  This must go Fannie Mae direct.  Many Banks have overlays on their underwriting and do not allow this.  It's a great way for borrowers with good credit to get the best rates and lowest cost mortgage solution.   Remember good credit is required we must get a DU approval.

Condos you can do limited review with 10% down payment using Freddie Mac.  This is great because it lessens the hurdle for owner occupied condos. Also for attached PUDs Freddie Mac requires no extra paperwork. 

Borrowers on foreign assignment coming back to the US:  Did you know that Fannie and Freddie require that a borrower reside in the US and have a US address in order to pull credit?  If you have a client coming back from overseas assignment they will need to establish a local address and before they can apply for a loan.  

These and other issues are solved by us monthly.   Let us know what we can do to help you get closed on-time.

Deanna and Todd

NMLS # 91421 and #91428  Equal Housing Lender