In this Blog:

• Rates worsen a little
• New Idaho Housing Down Payment Assisance Program
• 2nd Look Mortgage

Rates

     As anticipated, rates rose this week, and it wasn’t too bad, about .125.  We are seeing bonds sell of as there wasn’t much in the way of Tariff talk or Trump Tweets, but inflation fears.

     With the short week, we had 3 days of rates worsening and 1 day of rates improving, but in the end, it looks like rates will worsen by about .125%.  And the only reason we have not worsened more this week is because on Thursday, the NASDAQ tech sold off and traders ran out of stocks and into bonds.

    Today’s sell off is all about Jobs, not necessarily the numbers, but wage increase.  Average hourly wages rose 0.4%, bringing up the yearly to 2.9% and the weekly went from 3.0% to 3.2%, year over year. 

     This wage increase has been a long time coming, and employers are now having to fill jobs, not from the unemployment line, but from stealing workers from other employers by offering higher wages.  This is going to put more pressure on companies to increase wages, and to increase wages, you will need to increase how much you sell a product for, thus inflation.

     What could cool off this ROARING economy, Tariffs, and that is the concern, that Trump could announce an additional $200B in tariffs with China, as soon as next week.

     We are in a locking mode with the month of September all pointing to high interest rate, inflation, Federal Reserve, and other economic reports.

Idaho Housing’s NEW Down Payment & Closing Costs assistance

     IHA on Tuesday released new Down Payment & Closing Costs assistance programs, and they look pretty darn good.  They have now just 2 programs, which make it simpler for us loan officers to explain.  And there is something even more awesome!

Second Mortgage

Second Mortgage Conventional:  this will allow a borrower going Conventional Mortgage, with a 680+ FICO score to get up to 2.5% of the purchase price for a down payment.  Numbers work like this, 1^st Mortgage will be 97% loan to value, 2^nd mortgage 2.5% loan to value, borrower bring is .5% of their own money (or $500 for every $100,000 they borrower).

Second Mortgage FHA:  a borrower going FHA only needs a 640+ FICO score, and they will get 3.5%- 2^nd mortgage for down payment.  Numbers work like this, 1^st Mortgage will be 96.5% loan to value, 2^nd mortgage will be 3.5% loan to value, thus adding up to 100%.  Borrower will need to still bring in .5% of their own money, but this time in the form of paying for closing costs.

Forgivable Grant

     Now this is pretty sweet, IHA has initiated a forgivable grant.  Whereas by increasing the interest rate, on the 1^st mortgage, IHA will create a 2^nd Forgivable Grant, up to 3.5%.  The grant if forgivable:

Keep the loan for:            48-60 Months                   25% forgiven
                                      61-72 Months                   50% forgiven
                                      73-84 Months                   75% forgiven
                                      84+ Months                     100% forgiven

     Plus, the grant has NO payment and accumulates NO interest.  Pretty darn sweet.  Now here is the TOTALLY AWESOME News

Double Down Payment and/or Closing Costs Assistance (AWESOME)

     You can combine the Second Mortgage AND the Forgivable Grant!!

     Follow me on this!

     Let’s say you have a borrower that is buying a home for $200,000, has a 640+ FICO score and is going FHA.  That borrower could potentially get a 3.5% 2^nd mortgage, PLUS a 3.5% Forgivable Grant, for a total of $14,000 towards down payment, and only have to come in with .5% of their own money

OR

     Same borrower, could get 3.5% for down payment or $7000.00, and then we can get another 3.5% ($7000) from the Forgivable Grant for Closing Costs!  OR if we don’t need 3.5% for all of the closing costs, we can use $5000 of the Forgivable Grant for Closing costs, and put an additional $2000 to down payment, for a total of $9000 towards down payment.

     Basically, there are quite a bit of scenario we can do in order to make a loan work.

     Benefit to you, as a Realtor:

•      More clients can qualify, due to more options for down payment.
•      Sellers are not paying closing costs, and now we have options.
•      Increasing down payment will loosen up guidelines, so borrowers who many not have been approved with 3.5% down, and now can get 7.0% down, may get approved now.

     And don’t forget about 1^st Choice Mortgage 2^nd Look program, especially on IHA loan.  (LINK HERE) There are LOTS of lenders & credit unions that charge an additional Origination (Junk) fee on IHA loan, WE DO NOT.  And these lenders & credit unions also increase IHA rates, so they can more money on the back side, WE DO NOT. 

Here ls the link to a web page I have set up for the Down Payment Assistance programs, available in Idaho, and I have updated IHA stuff.  (LINK HERE)  Going to work on a flyer also.