How the Housing Relief Bill helps San Francisco home buyers AND sellers:
- Permanently raises the high-cost FHA and conforming loan limit to $625,500 (up from $417,000).
- Right now and until December 31, 2008, the new conforming loan limit is even higher. In San Francisco, the higher loan limit is $725,750. This is only a one-year cap and will go down to $625,500 in 2009.
- San Francisco First time buyer tax credit of $7,500 for home purchases made before July 1, 2009. The credit applies retroactively to April 9, 2008.
- Did you purchase your first home after April 9, 2008? Talk to your CPA about the credit so you don’t miss out.
- I hear it’s more of a deferred loan than a flat out credit but still. In high-cost cities like San Francisco, every dollar helps make home ownership more affordable.
WHY SHOULD YOU CARE?
- FHA loans are safe and affordable. They are typically 30-year fixed rate loans. They have easier qualifying guidelines in terms of credit score and down payment, like 3% or 5% down. With loan amounts of $725,750 or even $625,500, you CAN purchase a nice property in San Francisco, say a single family home, 2-unit buildings or potentially a condo. Plus, you don’t have to be low down payment. You can put 50% down if you want! You still get the benefit of these safer loans.
- For years, San Francisco home values increased but the conforming loan limit did not. Most of us were stuck with jumbo loan financing, which meant higher rates and shorter terms (typically). Now, many home buyers can purchase with a conforming loan and thus get the conforming loan interest rate.
- That $7,500 tax credit is like getting your property tax or closing costs paid for you! You need less money up-front to stop wasting money on rent.
WHO SHOULD PAY ATTENTION?
- Potential home buyers who have been watching the market, saving their money and biding their time. Prices may or may not come down a little more but this highest loan limit will be gone by year’s end.
- Home owners who have interest rate terms resetting soon or loans they’d like to refinance. You may have better refinancing options than even 6 months ago. It’s worth a call to your mortgage broker…
- Home sellers should pay attention because these loan options may make their home sale easier and more profitable by allowing more potential buyers into the pool. Your agent should understand these new loan products so they can talk about them with potential home buyers.