HUD Chief Is Eager for Change

One of the most surprising critics of the Department of Housing and Urban Development is the agency's own chief executive, Shaun Donovan. And if he has his way, people who have never before given much thought to the federal agency, which is tasked with increasing access to affordable housing, will feel its reach

Leaning forward on a dainty couch in his enormous office on Tuesday, the 42-year-old HUD Secretary explained how eager he was to reorganize an agency that seemed mostly irrelevant during his early career an activist for affordable housing, and later as commissioner of the New York City Department of Housing Preservation and Development, beginning in 2004. He said that HUD's programs, including Section 8 voucher programs that subsidize housing costs for low income, elderly and disabled individuals, haven't adapted to the "innovation and energy" driven by state, local and non-profit groups dedicated to creating and preserving affordable housing. "HUD programs need to be modernized," he says.

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That's My 2 Cents' Worth!

Spring Market Around the Corner

The daffodils and cherry blossoms are poppin,' the number of new inventory on the early side of the spring market is on the rise and mortgage interest rates are on the decline. Add to this, good new tax incentives and you've got one thing - a buyer's paradise!!

For those keeping an eye on the market the last six months, look for some fresh new things to appear on the market, in addition to increased competition among fellow home buyers.

If you plan to find yourself in the market to buy a home in upcoming months, do yourself a favor and shore up your financing now, and design a plan of attack with your Realtor.

Here's a look at 30-year fixed mortgage interest rates:

• Conventional: 4.75% up to $417,000; 5%  to $625,000; 6.25 to $1M
• FHA/VA: 4.75% up to $417,000; 5% to $625,000

Is it a good time to buy? Certainly - if you have job security.

That's My 2 Cents' Worth!

Realm of Home Values

I find it ironic that the other day, I met a client of mine in Dupont Circle to sign an offer on a home in Gaithersburg. The irony lies less in the two differing geographies and more in homes' values.

The offer my client signed was for a single family home with four bedrooms, three bathrooms, recently finished kitchen with granite countertops, a garage and about 2,700 square feet of interior space with a nicely-sized yard - in the range of $385,000. The home is located within walking distance of a nicely appointed town center that features dining, shopping and entertainment. It is a short drive from metro and is extremely convenient to major traffic arteries.

Meanwhile, the home in which we were signing the contract was a one-bedroom, one-bathroom basement condo with approximately 700 square feet of space. The condo also features a small garden patio and a parking space. Interior finishes include stone floors and a recently finished kitchen with granite-like countertops. A similar home sold a few months back at $385,000. The Dupont Circle home is located a quick walk to shops and restaurants, and a 10-15 minute walk to Metro.

Two things strike me with this comparison:

1. It is still possible to find affordable homes in the DC Metro Area that are as desirable under the roof as they are in their location; and
2. Values in DC's inner neighborhoods continue to be very stable.

That's My 2 Cents' Worth!

Foreclosure Prevention Plan - Do You Qualify?

It finally passed - the Foreclosure Prevention Plan. Have you wondered if you qualify? Well, first of all, you must own 'real' property and you must own less than 20 percent equity in your home. The programs was set in motion to help more than 4 million struggling borrowers by modifying loans for homeowners who haven't missed a payment.

Officials also unveiled more details on how servicers will modify the loans. First, they must reduce interest rates so that borrowers' total house payments are not more than 38% of their monthly income. The government will then subsidize servicers dollar-for-dollar to lower that ratio to 31% - but the interest rate can't go below 2%.

The new interest rate would then remain in place for five years, after which it will increase by 1 percentage point a year until it reaches either the original rate or the prevailing mortgage rate at the time of the modification, whichever is lower. This should prevent borrowers from suffering the "payment shock" that sent many borrowers with adjustable-rate mortgage into default in recent years.

Are you eligible? The Washington Post recently included a quick questionnaire. Check it out to see if you qualify.

Knowledge is power.

That's My 2 Cents' Worth!

Rehab for Your New Home? FHA's 203K May Help

If the condition of a home that has your eye is preventing you from making an offer, bear in mind that there is help to get you in the home. FHA is offering some phenomenal loan approvals, including 203k, which is a basic acquisition/rehab loan up to $35,000 for rehab purposes per purchase. It is lumped in with your mortgage loan, so you the consumer need only be concerned with one loan at one rate.

program can be used to accomplish rehabilitation and/or improvement of an existing one-to-four unit dwelling in one of three ways:

• Purchase a dwelling and the land on which it is located and rehabilitate it;
• Purchase a dwelling on another site, move it onto a new foundation on the mortgaged property and rehabilitate it; and
• Refininace existing liens secured against the subject property and rehabilitate such a dwelling.

What it covers. The 203k program covers cosmetics - anything from painting, room additions, carpet replacement - though the construction of the home is the first priority of such financing programs. This means, that insulating, weather stripping and replacement of a home's systems (furnace, air conditioning, etc.) are first priority.

For additional information, visit the U.S. Department of Housing and Urban Development.

That's My 2 Cents' Worth!