Housing Watch recently posted an article stating “from a recent survey, the home ownership dream is in decline.” Forty-nine percent out of the 2,000 persons surveyed believe they will never be able to have a down payment for a home.

As an eternal optimist, I believe that the American Dream of homeownership is still alive and well!  A market in flux is gradually coming to an end and we are once again entering a market of opportunity.  The market is back to a more “traditional” pace of growth and absorption, a far cry from the free fall we recently experience and much more stable than the artificial levels of 2004 and 2005.

According to the NAHB, “Even though the homebuyer tax credit expired on April 30, 2010 and won’t be renewed, there may never be a better time to buy a home than today.”  Most buyers can take advantage of today’s competitive prices and get a home they may not have been able to purchase just a few years ago.

Loan programs are still available to offer affordable down payments through FHA, down payment assistance programs and grants.  The main objective to qualify for the different loan programs to assistance with a down payment is good credit.

Yes, the American Dream of homeownership is still alive and well!

Click here to download the full presentation: 2009 Annual Atlanta Market Review.  And photos from the event can be viewed here.

The expected changes are as follows:

1. Increase the mortgage insurance premium, which is collected at closing and most often financed with the loan from 1.75% to 2.25% of the loan amount.
2. Require that any borrower with a credit score less than 580 put down 10%.  3.5% down will continue to be required by HUD with credit scores equal to and greater than 580.
3. Seller concessions will be limited to 3% of the purchase price verses the current 6% limit.

FHA is a federal assistance mortgage loan in the United States insured by the Federal Housing Administration that is issued by federally qualified lenders. Benefits include:

 - Lower down payment than conventional financing – only a 3.5% down payment required

 - More forgiving credit standards

 - Gift funds are allowed for closing costs and down payment

 - Seller concessions are available up to 6%

 - Asset reserves are not required at closing

 - The maximum loan limit is $346,250 for the Atlanta area

 - There are multiple loan limits, including 15-, 20-, 25- and 30-year loans

The USDA Guaranteed Rural Development Loans program (Rural Housing) offers attractive terms for eligible buyers purchasing eligible rural properties. We can help you determine if your buyers can take advantage of these program benefits, such as:

 - No mortgage insurance (PMI)

 - 100% financing

 - Loans are available up to $417,000

 - Non-traditional credit is even allowed in some circumstances

 - And asset reserves are not required

There are different guidelines for each loan type, dependent upon product type, condition of the house and the buyer’s circumstances. Speak to your mortgage counselor about your specific needs to determine if either of these loan types are an option for you. You can also visit www.hud.gov for additional information about FHA loans and www.rurdev.usda.gov for additional details about Rural Housing loans.

“Types of loans avialbe for REO homes” is part of NRT’s podcast series.  To hear this podcast or another podcast focused on home buying, please click here.

Estimates place the overall number of new homes purchased with the first-time home buyer tax credit at 1.2 Million, with 400,000 homes bought by those who would have never done so in the first place. With the credit set to expire on November 30^th, the debate about its extension now goes all the way to Capitol Hill.

This week, Congress did vote to extend the 8K tax credit for the next year to servicemen and women who actively served overseas for three of the last twelve months. This bill now moves on to the President. What remains to be seen if the extension will apply to all first-time buyers or beyond that to all home purchasers.

The market data continues to show signs of hope. On September 29^th, the most recent Case-Shiller indices reported that the data from July showed house prices in the United States increasing for the third month in a row. And the August Pending Homes Sales Index posted its seventh consecutive monthly gain in August, the highest reading in 2-1/2 years. In my previous post,  I expressed concern over unemployment’s effect on recovery. Almost 10% of our population is more concerned about finding a job over purchasing a home. It sounds as if we’re stuck in a catch-22. Since housing is such a large part of our economy, it would make sense to continue to provide ways to stabilize it. But if the unemployed cannot qualify for a loan, they won’t have an opportunity to take advantage of the tax credit, resulting in a prolonged recovery in the housing market.

Interest rates remain low, and for those who can make the move, it remains a great time to buy. Would an extension of the tax credit result in another 400,000 new purchases that could boost the economy? I say we should give it a try. As bipartisan support for the extension gains momentum in Congress, it is possible that six-twelve more months of the tax credit may be on the horizon.

Appraisals are becoming the next big challenge facing developers trying to sell their inventory. Distressed bank assets and aggressive short sellers are setting the standard for value in many projects.

Many developers still struggle to find ready, willing and able buyers. Now, even when you have found that elusive buyer that is financially qualified and ready to close, your work has just begun.

The new problem:  the appraisal comes back reflecting three recent foreclosures that were sold at prices well below the negotiated contract price. As a representative to the seller you  may argue the condition of the foreclosures was poor or point to other comparable sales at higher prices but usually the end result is a low appraisal and a dead deal. Buyers are unwilling or unable to move forward if the property appraisal does not meet or exceed the purchase price.

We need to consider that ready, willing and able buyers can and should influence the value of Real Estate. Using only the very most distressed sales as a baseline for true value will only continue this downward pressure on pricing.

There are many firsts in life that I wouldn’t care to do over again – my first day of school, my first date or my first job interview.

But I would love to be in the process of buying my first home all over again.

I wish I had the same opportunities that first-time homebuyers do now.  Prices on new homes – including single family, condos and townhomes – have been discounted and interest rates are at an all time historical low. Developers and home builders are pushing the $8,000 first-time home buyer stimulus as well as offering alternative incentives to entice contracts.  Many of our developer clients are offering stimulus packages that include FHA financing, alternative financing choices, buy-down interest rates, buyer bonuses, and paid closing costs.

And there seem to be plenty of first-time homebuyers taking advantage of these opportunities.  The auction of condos at The Element illustrated that there are first time home buyers in the market.  In fact, CNN’s lead story today talked about the great opportunities for first-time homebuyers and focused one homebuyer who went to an auction planning to purchase a home for his family.  As he told the CNN reporter, “I just have a feeling that in six to nine months, we’re going to start to see a resurgence in the market. So, I think now is the time for us to get into it, if we can.”

This is a great opportunity for the first time home buyer to get off the fence and take advantage of a real estate opportunity that will not get any better.  I just wish I could be one of them.