Bridging the Down Payment Cash Gap — (Part 2 in a 2 Part Series)


Improving Real Estate Markets

While most Americans see homeownership as a good financial choice, many are sidelined by 20% down payment requirements.  Recent surveys indicate that 31% of Boomers and 31% of Gen Y respondents consider 20% down payments a major obstacle.

According to a recent CNBC report, the housing industry activity has seen better days. Investor demand has catapulted prices up 12% year-over-year to “unsustainable levels” in some markets according to Fitch Ratings. Prior month mortgage applications fell 7%, refi apps swooned 8%, and home purchase applications tanked by 5% according to latest reports. Perhaps these trends and others have inspired the lending industry to showcase alternatives to the 20% down payment rule.

A large down payment, low debt ratio and a top credit score can typically qualify buyers for lowest interest rates and best mortgage terms. For well qualified buyers who don’t have a 20% down payment, banks are now showcasing conventional loans with 5% down payment options; while private and governmental sources fund and spotlight over 1500 home buyer assistance programs.

This is the second segment of a two-part series. We’ll spotlight seven down payment resources to help bridge the down payment cash gap.  First Time Homebuyers

Down Payment Assistance –Have you ever wished that there was a one-stop resource combining all of the available forms of down payment assistance in one place? Down Payment Resource (DPR) is a national databank of various forms of down payment assistance available throughout the country, including local, county, state, and federal programs in all 50 states. Programs include those reserved for teachers, veterans, healthcare workers, etc., as well as a multitude of private programs.

Multiple Listing Services across the country opt-in to the service, connecting local members who then provide access to their homebuyer clients. DPR Vice President of Business Development Beverly Faull states, “This is the only nationwide resource which aggregates more than 1,500 programs from over 1,000 providers into an integrated, online program finder.”

Major Banks & Credit Unions — Credit Unions, are jumping into the mix, offering attractive terms for qualified borrowers.

According to CNN news, several major banks such as Wells Fargo, TD Bank and Bank of America,  have begun offering loans with down payments as low as 5%. Some will even allow gifted funds to cover 2% of the sales price, leaving the buyer with a 3% down payment opportunity. Even million dollar property purchasers seek out lower down payment alternatives.  Market dynamics have shifted and it’s worth taking a second look at traditional lender offerings.

HomePath Mortgage—Available only on real estate owned by Fannie Mae, a HomePath mortgage is a conventional mortgage requiring 5 percent down with no private mortgage insurance.

 Shared Equity Financing Arrangements (SEFA)—First-time home buyers are again turning to the traditional parent-backed loan, but with a twist. Loans are now formalized with a profit-sharing clause for parents.  A legal agreement spells out the particulars such as who pays taxes insurance, maintenance, etc. and the length of the agreement. Profits are divided when the property is sold.

Veterans Administration (VA)—VA Loans, great for qualifying veterans, feature low or no down payments. It is possible to bypass private mortgage insurance.

U.S. Department of Agriculture (USDA Loans)—Rural property USDA loans may cover 100% of the price of the property. Mortgage insurance is required, however at lower rates than many other funding types. Buyers are often surprised to find that non-farm properties may qualify.

Good Neighbor Next Door Loans (—Qualifying applicants can receive a 50% discount on home prices. There is a 3-year residency requirement. The program is designed for law enforcement, pre-k through 12th grade teachers, emergency medical techs and firefighters.

While 20% down payments  dominated the lending scene for the last few years,  conventional lenders now signal a willingness to be more flexible on down payment options for well qualified buyers.

For information on effective ways to manage institutional and individual real estate portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

The Best Places For Business And Careers | Forbes Surprising Top 10

Large Cities Distressed-PropertiesAmericans love cheering for the home team. We also enjoy taking a sneak peek inside our neighbor’s reality to see whether the grass is truly greener on the other side.  Forbes recently released their 15th annual list of “Best Places for Business and Careers”. Recent graduates and those re-shaping their careers might find interesting insights. This analytical sneak peek reveals surprising details about why some cities excel while others continue to struggle.

The report reveals that the winning formula for many thriving cities includes a combination of low business costs,  an affordable cost of living plus access to a well-educated labor pool. This year’s Forbes list of “Best Places for Business And Careers” includes 200 major metros.  See how each scores on key metrics such as: Cost of Business, Job and Population Growth, and Education Rank.

Some of the Forbes “Best Places for Business and Careers” top performing metros appear to receive the least amount of news coverage from mainstream media.

This year’s #1 city is Des Moines, Iowa. Des Moines out-ranked all competitors by scoring in the top quartile on 9 of 12 key metrics used to grade the field of 200.  Des Moines rose to the top by keeping business costs 17% below the national average and by maintaining an educated workforce. Reportedly, 35% of the population has a college degree and 92% have high school diplomas.

Struggling California metros overshadow the bottom of the rankings. Cities such as Salinas, Stockton, Modesto and Merced face high unemployment, negative growth and less educated work forces.  Click here to browse all 200 rankings. Whether you agree or disagree with the rankings, the insider facts and insights in the report are riveting.

Here’s a quick peek at the top 10 metros:

Top 10:  

  1.  Des Moines , Iowa    
  2. Provo, Utah
  3. Raleigh, North Carolina
  4. Lincoln, Nebraska
  5. Nashville, Tennessee
  6. Denver, Colorado
  7. Fort Collins, Colorado
  8. Oklahoma City, Oklahoma
  9. Seattle, Washington
  10. Durham, North Carolina 

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT.  Remember to like us on Facebook. Follow us on Twitter.



Nashville Area 1-A Selling Brokers: Buyer Select Training News

Attention  Nashville Area 1-A  Selling Brokers:

In the near future, HUD will be implementing a “Buyer Select” closing agent program in  Nashville Area 1-A.  All buyers whose contracts are executed on or after August 19, 2013, (tentatively) will select their own closing entity.

To introduce this program to the industry, HomeTelos will provide an overview of the Buyer Select Program to industry partners that are involved in the sale of HUD Homes. Please register for the Buyer Select Closing Agent Program at: (No Longer Active Link)

Webinar Training is as follows:


Event Duration: Join us for a webinar on Wednesday, August 14, 2013 from 10:00-11:00 PM CDT

Event Description: The new “Buyer Select Settlement Agent” program will be introduced and an overview of the process will be provided.

Registration: The following is the registration link to register for the webinar: (No Longer Active Link)

Register early as space is limited.

After registering, you will receive confirmation e-mail containing information about joining the webinar.

Please don’t forget to mute your phone, once you are on the call.  The code to mute and to unmute your phone is *6.  Also be sure to be on time as the virtual door will close once the meeting gets underway and late comers will not be allowed access to the call.

View System Requirements

Pending Home Sales Index Dips in June, Up 11% Over 2012

According to the June Pending Home Sales Index released by the National Association of Realtors® (NAR), contract signings are down a marginal 0.4 percent to versus prior month. Pending sales were still nearly 11 percent greater than those of a year ago.  Therefore, industry professionals and homebuyers, remain optimistic about overall market conditions. Housing demand is still strong and improving, however a jump in interest rates in concert with higher home values, lowered affordability according to the NAR. Interest rates were historically low for many months before the spike in May, and NAR Chief Economist Lawrence Yun noted the negative impact  on home affordability. Many regions— still suffer with inadequate existing home resale inventory.

In commenting on the June Pending Home Sales Index, Yun pointed out that a contract doesn’t always equal a closing. Buyers generally get pre-approved with a lender up front, but may wait to lock in their interest rate until they are under contract and clear to close on their home. This is sometimes as Pending-Home-Saleslate as two weeks before the closing date. “Some homebuyers may change their minds if the rate rises too much, which apparently happened with some sales scheduled to close in June,” Yun said.

Indeed, if a buyer’s rate rises too much, the loan payments can increase to the point where the home under contract simply isn’t affordable anymore, especially if the buyers are already pushing the debt-to-income ratio on the loan. The latest Pending Home Sales Index report reiterated that most markets across the U.S. continue to experience a shortage of housing inventory. With fewer homes to buy there may be fewer contracts executed.

In this month’s Pending Home Sales Index report, NAR forecasts an 8 percent increase in home sales over 2012, and a median price bump of 11 percent. Projections are based on year to date data and expectations of steady pending contracts for the remainder of 2013.

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Technology for Real Estate: Dallas Agent Reboot – Part 2 of 3

Technology for real estate has revolutionized the buyer’s shopping experience and transformed the sales and marketing process for real estate professionals. Inman News bridges the technology divide with Inman Agent Reboot, an exceptional series of events showcasing technology for real estate industry professionals. Last month we participated in the Dallas venue where we captured tons of technology for real estate tips, tried out several of them and decided to share our favorites. There were so many outstanding tips and techniques we opted to present them in a 3-part series. This is the second in the series. The focus here is on video marketing tools that deliver the wow. Technology-for-Real-Estate

Video Marketing Tools

  • BombBomb
    • Facilitates video emails, either singularly or as drip marketing campaigns.
    • Referenced glowingly several times during the conference.  Visit their website for demos.
  • Animoto
    • This time-saving power tool doubles as a private video production suite. Subscriber provides photos and video clips and Animoto turns them into an artful video.
    • It elevates virtual tours, captivates city/neighborhood tours and helps to commemorate personal milestones.
    • Background music options are available.
  • Videolicious
    • CEO, Matt Singer conducted a training session entitled “How to Create Effective Video.”  It was a fascinating live demo, complete with finished product. He demonstrated how to collect video snippets of key locations in a neighborhood and knit them together with audio narrative to create a cool “insider-neighborhood – walking tour” feel. Very effective. Here are his tips.

Video Marketing Tips:

a) If shooting with a camera phone, shoot with the phone in a horizontal position.
b) Use the “slow pan” technique to cover the target area.
c) Use small, subtle movements.
d) Use a “slow tilt” up and down to demonstrate the height or depth of a space.
e) Avoid overhead lights that can cause shadows. When photographing human subjects, have them face a light source such as a window whenever possible.
f) Consider purchasing a “wide angle lens” for your cellphone camera—costs about $20—to allow broader capture.
g) Turn up the energy! When on camera, rev up your energy level by about 150% versus your normal off-camera demeanor.
h) Use your expertise to add interesting verbal insights that viewers would not otherwise know. Use personalization to showcase best property features (e.g.: I love hosting dinner parties, and this dining room would be awesome for dinner parties!).
i) Use the “book-end approach.” Smile before pressing the “start” button and continue smiling while you press the “stop” button.

Visual Impact Tools That Help You Stand Out:

Cut through the clutter with these visual marketing tools that transform traditional graphics into miniature bill boards.

  • Over – Adds visual impact to photos. This app makes it possible to add a message or descriptor directly onto a photo. It uses eye-catching fonts that help the photo tell a captivating story.
  • Moo Business Cards  — Multi-function business cards allow cards to do double duty. Create a different image on each card in the deck. Showcase listings, inspiring quotes, or top local restaurants, etc. Moo offers “green business cards,” QR Code Business Cards, Facebook Cards, Luxe Cards, and full color two-sided cards, to name a few. Branded cards look great with listing photos on the reverse side.  While online take a look and see why their Luxe cards truly stand out.

In the next segment on Productivity you will learn how one enterprising broker with 42 agents reduced the  office communications bill from $560 per month to $62 per month.

For information on effective ways to manage institutional or individual portfolios nationwide, or to shop for real estate visit First Preston HT. Don’t forget to ’like’ us on Facebook and follow us on Twitter.

You can find the first part of our Technology for Real Estate blog series here.

Technology for Real Estate: Dallas Agent Reboot – Part 1 of 3

The 2013 Inman Agent Reboot conference simplified the hottest trends in technology for real estate professionals. While at the Dallas venue we captured tons of technology apps and tips, tried out several, and decided to share our favorites with you.

There were so many outstanding tips and techniques we decided to present them in a 3-part series showcasing three main categories:

  1. Lead Management
  2. Video Marketing + Visual Impact Tools
  3. Productivity

Lead Management Tools & Tips


Boomerang for Gmail – Have you ever received an email lead and responded right away but received zero response? Often the unresponsive prospect simply drops off the radar.  Boomerang reminds agents to continue follow up with specific hard-to-reach prospects.  Users can also formulate and schedule email messages for future delivery dates to stay proactive, maximizing lead conversion.  

Rapportive for Gmail – Have you ever received an Internet lead that provided only an email address? Ever wonder what type of person is on the other end? Rapportive for Gmail gathers details from the prospect’s internet footprint and forwards that info to your inbox. You can review their aggregated social profile to learn what information might add value or which property attributes to emphasize. You can also harvest details to customize follow-up, build relationships and close more transactions. Lead Management (Tip): What to Say?—What can you possibly say to get an email prospect to finally reply?  Researchers have found the number one most effective response is: “I have important information you requested regarding 123 Main St. Call me as soon as possible.”

The next segment on Video marketing and visual Impact tools will highlight 5power tools that deliver the wow plus tips on how to improve your photos and videos from Videolicious CEO, Matt Singer.

For information on effective ways to manage institutional or individual portfolios nationwide, or to shop for real estate visit First Preston HT.  Don’t forget to ‘like’ us on Facebook and follow us on Twitter.

June Housing Starts Summary: Permits and Housing Starts Decline

The numbers are in for June’s Housing Starts Summary, and while both permits and starts are down that’s not the entire story. Housing starts are down overall 9.9% to 836,000,however, the bigger picture is that the bulk of this decline is due to the 26.7% drop in starts for buildings with five or more units, most likely apartment construction. Single-family home starts only dipped 0.8% in June’s Housing Starts Summary, and starts for both categories as a whole are still up 10.4% over this same time last year.

Housing Starts SummaryPermits are also down for June versus the prior month a decrease of 7.5%. The Housing Permits category mirrored the Housing Starts pattern, showing fall back the prior month but significant growth compared to the prior year. This June’s Housing Starts Summary reflected 911,000 total permits pulled, that’s 16.1% higher than June of 2012. The repeated year-to-year gains in both permitting and starts are a strong indicator that despite the inevitable peaks and valleys in the housing market, a recovery does appear to be underway. In fact, while permits for multifamily construction dipped 22.8% in this month’s Housing Starts Summary, permits for single-family homes were the highest since May 2008—at 624,000, up 0.6%.

The question for many may be, will demand for new homes continue? Many economists and builders believe the answer is yes. The July Housing Markets Index report, which gauges builder’s optimism, reflected an overall jump of 6 points to 57. Any score in the Housing Market Index over 50 indicates that most builders perceive conditions to be improving. There were gains in all three components of the HMI, meaning builders are seeing more buyer traffic, think the current conditions are improving, and expect good things for the next 6 months. Many permits pulled from previous months have yet to be used, so economists such as Avery Shenfeld of CIBC World Markets expect that recovery and construction starts will maintain momentum. Whereas monthly numbers in June’s Housing Starts Summary have dipped due to a slowdown in apartment building, single-family construction is on the rise, and the general outlook for both remains positive.

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Housing Market Index Up 6 points in July, Posts Strongest Numbers Since 2006

The National Association of Home Builders (NAHB) and Wells Fargo released the monthly Housing Market Index for July, and the overall numbers are up 6 points. This is the highest total rating conveyed in the Housing Market Index since January of 2006. Market conditions remain on the upswing for builders. Many market areas or metros still have lower levels of available existing housing inventory; therefore, well-qualified buyers are flocking to new construction.Housing Market Index

The Housing Market Index score is calculated by measuring three areas of growth by way of surveying homebuilders. All three of these areas showed gains in July. Potential buyer traffic climbed 5 points, while the assessment of builders’ sales expectations for the next 6 months rose 7 points resulting in the highest scores since late 2005 for buyer traffic and sales expectations. Meanwhile, the assessment of builders’ perception of the current sales conditions increased 5 points, also hitting the highest level since early 2006.

NAHB Chief Economist David Crowe cited low existing home inventory as one of the factors driving buyers toward new construction. He also noted an enhancement in the infrastructure that supplies home building, and stated that some costs for materials have stabilized or decreased as well. In addition to the positive gains in the three areas measured in the index, July’s Housing Market Index also indicated gains in the 3-month moving averages for all four regions of the U.S:

  • The South rose 5 points
  • The Northeast gained 4 points
  • The Midwest jumped 8 points
  • The West increased 3 points

Given those numbers, the outlook for recovery in the housing market continues to be bright. However, NAHB Chairman Rick Judson, a homebuilder in North Carolina, says there are still areas that builders are watching somewhat cautiously. He stated in this month’s Housing Market Index, “This positive momentum could be disrupted by threats on the policy side, particularly with regard to the mortgage interest deduction and federal support for the housing finance system.”

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July Improving Markets Index Includes Triple the Number of Metros from a Year Ago

The National Association of Home Builders (NAHB) released its Improving Markets Index for July and the latest Improving Markets Index includes 255 metros, that’s triple the number of metros which qualified a year ago. July results are down slightly versus prior month.

For the sixth consecutive month more than 70 percent of U.S. metros met the rigorous standards and qualified as improving markets. Given these positive figures, builders remain optimistic about the future. In fact, NAHB Chairman Rick Judson contends that July’s Improving Markets Index indicates a far-reaching recovery is taking place, saying it is “much more extensive than what we were looking at one year ago.”

While a comprehensive housing recovery Improving Markets Indexmay certainly be underway, challenges remain for homebuilders. NAHB Chief Economist David Crowe reemphasized the need for more readily available building materials, credit, and buildable lots for construction of homes, as these hurdles continue to hinder homebuilder efforts. He noted the uptrend in home values is another contributing factor supporting the recovery of the U.S. housing market. The National Association of REALTORS® (NAR) reported recently in their Pending Home Sales Index that they are upgrading median price growth projections to 10 percent in 2013. Positive job growth figures re-enforce builder confidence.

The Improving Markets Index measures three key areas.  A metro must show improvement for a minimum of 6 months to gain inclusion in the report. Those three areas are:

  • Employment, as reported by the Bureau of Labor Statistics
  • Housing permits pulled, as reported by the U.S. Census Bureau
  • House price appreciation, as reported by Freddie Mac

Six metros were added to the July Improving Markets Index:

  1. Olympia, WA.
  2.  Farmington, NM.
  3. Cumberland, MD.
  4.  Saginaw, MI.
  5. Kingston, NY.
  6.  Las Cruces, NM.

Fourteen metros were dropped from the list, including Huntsville, AL.; Albany, GA.; Dayton, OH; Allentown, PA.; Sherman, TX; and Spokane, WA.

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Pending Home Sales Index Up 12 Percent, Reaches Highest Level Since Late 2006

The National Association of Realtors® released monthly Pending Home Sales Index results for May, reporting improved levels of pending sales growth not seen since December 2006. Pending contracts showed 25 consecutive months of growth with latest figures up 6.7 percent over prior month, and 12.1 percent above results for the prior year. Buyers are encouraged to take advantage of record low interest rates. Lawrence Yun, NAR’s chief economist reports that there are fewer housing choices available in many markets. The May Pending Home Sales Index was released after Freddie Mac reported that the Federal Reserve might reduce its stimulus program; this action prompted one of the largest weekly increases in mortgage rates ever seen.

The rising rates don’t seem to be dampening Pending Home Sales Indexbuyers’ enthusiasm, as evidenced by the uptick in homes under contract in the Pending Homes Sales Index. In fact, Yun is upgrading NAR predictions calling for a 10 percent increase in the median sales price of existing homes.  That would mean a median home price of $195,000. The market hasn’t seen escalations in median prices like this since the beginning of the boom back in 2005. With most markets experiencing high buyer affordability, Yun said we are experiencing some “fence jumping”—i.e.: proverbial fence sitters are finally making a buying move after taking stock of the rising rates and prices. This is good news for the sellers; as increased values mean fewer under-water mortgages.

The latest Pending Home Sales Index shows an increase in sales in the South region of 2.8 percent for the month, a rise of 12.3 percent versus prior year. Pending contracts in the Midwest rose 10.2 percent from April and are 22.2 percent higher than in May 2012. The West and Northeast didn’t fare as well in this month’s Pending Home Sales Index; however, industry leaders at NAR believe this can be attributed to the lower available housing inventory levels. The West region experienced a month-to-month gain of 16.0 percent, but the increase only translated to a 1.1 percent increase over the preceding year. The Northeast pending sales volume is up 14.3 percent year-over-year, however pending sales remained flat  as compared to prior month results.

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