HUD eases FHA condo financing rules

 

Federal Housing Administration (FHA) Principal Deputy Assistant Secretary Ed Golding announced changes to FHA condominium policies last night at the National Association of Realtors^® (NAR) convention in San Diego.

Effective immediately, FHA will streamline the condominium recertification process and expand its definition of acceptable "owner-occupied" units to include second homes not owned by investors. The provisions expire in one year "until the agency can implement a more comprehensive condominium rule change."

The change should qualify more condo complexes for FHA loans. That, in turn, will give more buyers access to FHA low-downpayment mortgages.

The new rule:

1. Modifies the requirements for condominium project recertification
2. Revises the calculation of FHA's required owner-occupancy percentage
3. Expands eligible condominium project insurance coverages

Florida homebuyers, perhaps more than any other state, will benefit from FHA's new rule.
"This is going to be an amazing stimulus to the housing market for the first-time homeowner and entry-level housing buyer," says Frank Kowalski, president of Florida Realtors in 2005 and an insurance agent. "It's a catalyst for change and long overdue. Thousands of contracts could not use FHA financing, and buyers were forced to come up with 25 – even 30 percent downpayments."
Kowalski says FHA's rule change should help more than just first-time buyers, however. Condo financing problems also frustrated the move-up market – condo owners who want to make the move to single-family housing.

"It's difficult to sell an existing unit if you can't find a qualified buyer," Kowalski says. "A lot of people are frozen in place: Those in (a condo unit) can't get out; those out can't get in."

According to Golding, the just-announced FHA changes are in line with ones requested by NAR, which has been an advocate for reform. NAR cited problems with a lengthy and complex recertification process, burdensome owner-occupancy requirements, and the limits on acceptable property insurance.

One major benefit for Florida condo owners: the property insurance rule change. FHA will now accept Citizens Property Insurance coverage – the Florida-owned company and largest condo insurer in the state.

In addition, FHA changed the way it will view co-insurance clauses, which exist with most Florida condos. That change alone will help up to 85 percent of Florida's condo associations, according to Danielle Blake, the Miami Association of Realtors' government affairs director and a long-time advocate for FHA change.

According to Golding, insurance and recertification changes will take place immediately. Policy changes related to owner occupancy, commercial space percentage, FHA concentration and spot approvals would be addressed through formal rulemaking in the near future.

"Condos are often the most affordable option for homebuyers, especially first-time buyers, and making sure FHA financing is an option is important to supporting homeownership," says 2015 NAR President Chris Polychron.

HUD provides an overview of all changes in Mortgagee Letter 2015-27, which is posted online.
Aritcle reprint courtesy of and © 2015 Florida Realtors®  Original post appears here: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=330467

3 Credit Repair Scams to Avoid

Freddie Mac warns buyers of 3 credit scams

 

Freddie Mac issued a warning for homebuyers about scams that entice them by promising to raise their credit score in exchange for money.

"Who doesn't want the highest credit score possible to garner the most-favored terms?" Freddie Mac notes on its website. "For many Americans with consumer credit negatively impacted by the housing crisis and fluctuating economy, it's easy to be lured by the promise of a raised credit score," Freddie Mac says. "Schemes that falsely raise credit scores will land borrowers in scalding hot water – as well as cost you time and money combating both origination- and servicing-related fraud."

Freddie Mac highlighted three types of common fraud schemes to raise credit scores:

1. Disputing credit with credit bureaus
A new program with FICO – called FICO Score Open Access for Credit & Financial Counseling – was created to help borrowers who have credit management problems by providing FICO Scores along with credit education material to help consumers understand credit scoring and learn more about financial management. However, some fraudsters are using the program in a scam.

"(Scammers) may direct a borrower to contact credit repositories repeatedly to dispute previously defaulted debt," Freddie Mac warns. "The fraudster hopes the creditor will miss responding to one of the disputes and the defaulted debt will disappear temporarily, triggering a jump in the borrower's credit score. The borrower may qualify for – and close on – a new mortgage before the credit report correctly reflects the defaulted debt and the borrower's true credit score."

2. Claiming identity theft falsely
Some companies encourage buyers to falsely claim identity theft on their loan application in order to have debt removed from their credit report.

"Some borrowers who falsely claimed identify theft have gone as far as providing affidavits of identity theft and police reports," Freddie Mac writes. "Of course, lenders take these claims seriously and investigate. In some instances, they discover that the 'police report' is fake, never actually filed, or from a police department that doesn't exist."

3. Misusing credit protection numbers
Using a credit privacy number – an alternative for a Social Security number most commonly used by celebrities and politicians to hide previous credit issues – can be a dangerous move.

"Some consumers with poor credit acquire a CPN with the intent of creating a new, clean – and misleading – credit profile," Freddie Mac notes. "CPNs were not created for this purpose, and mortgage loans originated using a CPN are ineligible for sale to Freddie Mac. Borrowers who use a CPN with the hope of leaving their bad credit histories in the rear view mirror are in for a rude awakening."

As the Federal Trade Commission bluntly points out, "By using a stolen number as your own, the con artists have involved you in identity theft,' for which you may face legal trouble."

Source: "Freddie Mac Issues Credit-Scam Warning to Potential Home Owners," HousingWire (Nov. 6, 2015)

Repost courtesy of and © Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688. Original article appeared here: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=330299

Live in Miami and Work in Orlando? Yes, It's Possible

Passenger train to quickly link Miami and Orlando

 

A privately owned and operated passenger rail service is on track to begin connecting travelers in four major Florida cities by mid-2017.

Today, All Aboard Florida is slated to reveal that the new express inter-city train travel service, which will cost more than $3 billion to build, will be called the Brightline.

Brightline trains will connect Miami, Fort Lauderdale, West Palm Beach and Orlando along a 235-mile route. The stretch from Miami to Orlando will last three hours, comparable to what it takes to get to the airport, go through security and fly, developers say.

The trains, designed by the Rockwell Group, are being built in Sacramento by Siemens. Construction has begun on stations in Miami, Fort Lauderdale and West Palm Beach, and on connecting urban centers that developers hope will become dining and shopping destinations. Another station will be next to Orlando International Airport.

All Aboard Florida is a wholly owned subsidiary of Florida East Coast Industries, which is involved in a range of infrastructure, transportation and real estate businesses. The project is being funded by private investors through the issuance of $1.75 billion in tax-exempt bonds and directly from the parent company. The company expects to become profitable in the first couple of years as it adds more trains and ridership increases.

All Aboard Florida and tourism officials say the trains and their stations could transform travel throughout Florida, one of the country's most populous states. Providing trains as an alternative could ease congestion on the roads and alleviate pressure on crowded airports.

"Half of our business is international," says William Talbert, president and CEO of the Greater Miami Convention and Visitors Bureau. "To connect Miami and those other three communities by train makes it convenient, affordable, clean and safe to travel. It gives the visitor options that we haven't had before."

Not everyone is on board with the new train service, however. Citizens Against Rail Expansion, a coalition of residents and community leaders in South Florida, argues that the rail system will compromise public safety. A number of hospitals along the route are on one side of the tracks while first responders are on the other, says Stephen Ryan, an attorney representing CARE.

What is now a single-track system will likely change to a double-track at various points along the way, which will pose a danger for school buses trying to cross over, Ryan says. The number of freight trains will also increase, he says. Another reason for concern that the group has brought up: It will harm the maritime industry because it will increase wait times at drawbridges that the train will cross. All that will result in a drop in property values, which will impact tax rolls, he says.

The group also questions All Aboard Florida's insistence that the project is fully privately funded. The use of tax-exempt bonds, Ryan says, is essentially a federal subsidy.

"There are profound issues for the local economy," he says.

All Aboard Florida says that no federal government entity will have exposure to the investment, and that train travel is needed to improve the quality of life.

Trains were the primary mode of transportation in the USA until after World War II, when cars and airlines took over the roads and skies. Federally funded Amtrak has remained the predominant interstate passenger train system, but it does not offer the kind of high-speed service found in Europe and Asia.

The closest thing the USA has to high-speed trains is Amtrak's Acela on the northeast corridor, which can go as fast as 150 mph. Brightline trains will not be high-speed, but its express service will be able to go up to 125 mph.

High-speed rail "takes more money and fully dedicated track and electrification," says Andy Kunz, president and CEO of the U.S. High Speed Rail Association.

There's been a recent resurgence in interest in trains, particularly among younger travelers, says Jim Wallington, a train expert at America by Rail, which promotes train travel. "This younger generation is less car prone," he says. "They are not buying cars like we used to, and they are demanding that there be alternate transportation."

President Obama's 2009 stimulus bill proposed billions of dollars in funding to create a true high-speed rail system across the nation. His efforts have stalled amid political opposition.

Privately led efforts are underway to create high-speed rail systems in Texas and between Las Vegas and Los Angeles. A publicly led high-speed rail system is under construction in California. That will eventually connect Los Angeles and San Francisco in less than three hours.

Reprint Courtesy of and Copyright 2014, USATODAY.com, USA TODAY, Nancy Trejos. Original post appeared here: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=4&id=330245

Burgers, buildings and more coming to Boca Raton soon

Boca Raton is nearly out of land, so developers are building on small parcels, or redoing existing properties, to make way for new homes and shops.

One shopping center under construction now is Park Place by Schmier & Feurring Properties on Military Trail, south of Clint Moore Road and Office Depot’s world headquarters.

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Park Place shopping center, under construction in Boca Raton. (Provided) 

 

In addition to a Fresh Market grocery store, Park Place will host a cornucopia of restaurants, too.
So far they include a new location of the Habit Burger chain, another Chipotle location and a new player in the South Florida dining market, Burton’s Grill, a modern American concept from Boston.
Also coming: a new location for Raw Juice, the growing Boca Raton-based fresh juice and vegan food eatery, and Phenomenon, a nitrogen-based ice cream concept. Restaurateur Burt Rapoport also plans Rappy’s Deli, which is billed as a modern spin on the classic Jewish deli.

Shops also are planned for the 64,000-square-foot center, which will open in 2016 and be built in an elegant, contemporary design “with unbelievable areas and energy for customers,” said Ross Feurring, the project’s director of leasing.

“There’s no new development in Boca Raton, so if you want to get in this market, this is one of the only opportunities,” Feurring said.

He’s right. Boca Raton has its longstanding clusters of commerce, such as the Town Center mall in the city’s center, and the mixed-use Mizner Park downtown.

But increasingly, developers are snapping up smaller pieces of land, or redoing existing buildings, to make way for new stores, condos or apartments.

“Boca Raton is developed to a large extent, and now it’s ripe for redevelopment and infill,” said Nader Salour, of Cypress Realty, based in Jupiter.

The 64,000-square-foot Park Place, for instance, sits on just 16 acres. To its south is a vacant 10-acre parcel, now under construction for 298 apartments by Altman Development Corp.

Meanwhile, Salour is working on a mixed-use project also planned for Military Trail near the mall. He and partners own a 10-acre site. On it sits an old bowling alley, now doing business as Strikes@Boca bowling alley, and nearby, a shuttered Scandinavian gym.

Salour is seeking the city’s OK to build 200 apartments and 65,000 square feet of retail space. “It’s a prime location surrounded by very attractive buildings,” including office buildings, Salour said.
Salour said the high-end apartments he plans to build will fill a need for people who now commute into Boca Raton to work because there aren’t enough rental projects in the city.

Several properties around the Town Center mall also are undergoing a renaissance.

Across from Salour’s property sits Boca Center, an office, shopping, dining and hotel complex also slated for a redevelopment. 

Developer Tom Crocker last year reacquired this center, which he originally built. Now he plans a massive upgrade. A high-end gym, new restaurants and development along Military Trail (now home to a parking lot) all are in the works. The idea is to turn the Boca Center into a luxury food and entertainment mecca.

Boca Center’s proximity to the Town Center mall, in the heart of the city, makes it prime property for restaurants eager to do business in the city, said Tom Prakas, of Prakas & Co. in Boca Raton. Prakas is handling leasing for the center.

Crocker also plans to create a “restaurant row” along Butts Road, on property he owns next to his Wells Fargo office building, Prakas said.

In addition, Crocker is looking to add a restaurant to another of his Boca Raton office properties: One Town Center, a Class A, 10-story office building that once was home to Tyco’s headquarters. Plans are to create a 5,000-square-foot restaurant downstairs, with patio space outside along Town Center Road.

Boca Raton’s building boom is no surprise to longtime real estate professional Keith O’Donnell, a principal with Avison Young in Boca Raton.

The city’s ranking on Livability’s 100 Best Places to Live means a renewed interest in adding to the city’s offerings of homes, shops and offices. Boca Raton was ranked 59th, based on an analysis of each cities’ amenities, economy, education, health care and other factors.

O’Donnell said activity in the city is divided among the eastern section of the city, where the downtown is seeing the construction of mixed-use projects, apartments and condos; the central portion of the city, around the mall; and the northwest section in and around the Arvida Park of Commerce, traditionally home to headquarters and research companies. A number of mixed-use projects also are planned there, he said.

Some 20 years ago, the thought of residential housing in the city’s largely ghost-townlike downtown was unthinkable. Now, however, several projects are in the works or underway, including Palmetto Promenade’s apartments and shops along Palmetto Park Road.

“Downtown is seeing a vibrancy it hasn’t seen in the residential sector,” O’Donnell said, “which will drive more retail demand.”

Reprint courtesy and copyright by Palm Beach Post and author By Alexandra Clough - Palm Beach Post Staff Writer. Alexandra Clough writes about the economy, real estate and the law. Original post here: http://www.mypalmbeachpost.com/news/business/burgers-buildings-and-more-coming-to-boca-raton-so/npCTB/

7 property descriptions that concern buyers

 

Some words in listing ads can send red flags to potential buyers. CBS' MoneyWatch recently asked five real estate professionals to weigh in. Here are the words they say buyers should watch out for:

1. "As is." Sellers list a home "as is" when they don't want to do any of the needed repairs.
"They feel they're putting their best price out there, and they don't want to get stuck with a buyer nickel-and-diming them for every repair," says Deb Tomaro, a real estate professional in Bloomington, Ind. However, buyers may have a tougher time getting a bank to agree to a mortgage with an "as is" home.

Also, seemingly small fixes – like an unfinished floor or broken window – may become deal-breakers for the bank. Buyers would still be wise to have a property inspection and try to negotiate with the sellers on some repairs, even for an "as is" home, Tomaro says.

2. "All work has been done for you." "That generally means it's a flipper," says Elizabeth Weintraub, a real estate professional in Sacramento, Calif., who added buyers may also want to be leery of phrases like "total remodel" and "completely rehabbed."

Investors may purchase a home at a bargain price below market value and then remodel and try to resell it for a profit. "They make cosmetic changes as quickly and cheaply as possible," Weintraub says. "All they have to do is put in stainless steel appliances and granite countertops, and someone is going to want to buy it."

Buyers should make sure that shiny facades aren't hiding serious defects, such as mold, water damage or an unstable foundation.

3. "Cash transactions only." A listing may specify that a sale will be cash only, which could signal there could be something majorly wrong with the home. "That's one of the most useful real estate lingo things [to watch for]," says Jon Boyd, an Ann Arbor, Mich., real estate professional. "This means there could be an issue with the house that may make it difficult to qualify for a traditional mortgage."

4. "Vacant." You might not see this written in the property description, but an unfurnished home in the property photos online likely means the home is vacant, which could also send a warning signal to buyers – and buyers may be wise to find out how long the home has stood vacant.
Homes unoccupied for a long time could develop severe maintenance problems, such as burst water pipes or mold. Boyd recommends buyers get a thorough inspection done and have the utilities turned on to check for issues before buying.

5. "TLC." "I think 'TLC' is probably the most commonly used description for when [sellers] don't want to say it's a fixer," says Weintraub. "When they say it just needs a little TLC to make the home shine, that means it needs a complete remodel."

6. "Land lease buildings." In larger cities – such as New York – this may be an item a buyer will see, which indicates that the building is built on leased land. That means when a building's lease expires, the owner will have to negotiate a new one and that could mean higher prices for everyone involved. Monthly assessments – maintenance fees that apartment owners pay the building – could escalate.

"Everyone's monthly payments skyrocket, and they have to reduce the purchase price so buyers can afford those payments," says Brad Malow, a New York area real estate professional and founder of BuyingNYC.com. That could make the place tougher to sell later on.

7. "Bring your own toolbox." A listing that uses this phrase may sound like just a few cosmetic fixes are needed, but it could signify much larger projects.

"There was one house in my market that said to bring your own toolbox, and it had $15,000 in basement repair projects," Boyd says. "Those kinds of tools are not normally in anybody's toolbox."

Source: "10 Signs of a Scary Real Estate Listing," CBS MoneyWatch (Oct. 27, 2015)
Reprint courtesy of and © Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688. Original post here: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=329889