FHA loans are becoming more attractive

from Florida Realtor Magazine, July/August 2008 page 24

FHA Loan Limits Open DoorsFHA loans are becoming more attractive. “This is great news for buyers,” says Cathy Alley, a sales associate at ERA American Realty in Niceville. She’s referring to the March announcement by the Department of Housing and Urban Development (HUD) that it increased the size of loans that the Federal Housing Administration (FHA) can insure for the remainder of 2008.“I think the raising of FHA limits is going to help not only buyers in our area, but it will also generate activity across the nation,” says Alley. “When the market was hot, first-time buyers really couldn’t buy property because they were being outbid by investors. This will bring the average American back to the homebuying market.”What the New Rules Mean“FHA loans,” as they’re called, are issued by traditional lenders but insured by the FHA. Because they allow down payments of as little as 3 percent, they’ve been valuable in helping lower-income buyers enter the housing market. But as home prices rapidly increased, FHA loan limits remained stagnant. That left lower-income buyers with fewer homes they could purchase through the FHA program.The new FHA rules are a result of the economic stimulus package Congress passed in February of this year. Through the package, Congress asked HUD to reconsider its median home prices in counties throughout the nation, which it uses to determine which loans it can insure. In most counties, including those in Florida, the FHA is permitted to insure only loans that don’t exceed 125 percent of the county’s median home price. In designated high-cost areas, the FHA can insure only loans that don’t exceed 175 percent of the median home price. By revising the median home prices upward, HUD is opening up the FHA program to more buyers.For instance, in Miami-Dade County, the new median price is $339,000, which has raised the FHA loan limit from $362,790 to $423,750. In Lee County, the median price has been reset to $285,000, which has raised the FHA loan limit from $270,750 to $356,250. In Manatee County, the median price has been adjusted to $354,000, increasing the FHA loan limit from $336,100 to $442,500. Check the limit in your county by visiting HUD’s Web site: https://entp.hud.gov/idapp/html/hicostlook.cfm.On the same day HUD increased FHA loan limits, the Office of Federal Housing Enterprise Oversight increased limits for loans guaranteed by Freddie Mac and Fannie Mae from $417,000 to $729,750. That means that buyers who needed financing greater than $417,000 in the past—and were required to pay higher interest rates for those jumbo loans—can now get loans up to $729,750 without paying the jumbo loan premium.Spread the WordAs soon as the new FHA limits were announced, sales associates throughout Florida sprang into action. “I take any opportunity to reconnect with buyers,” says Toni Campbell, a sales associate at Keller Williams Advantage II Realty in Orlando. “Buyers need to hear something positive, so I started going through my contact list and letting them know that the FHA loan limits had been raised and that the change would help them get more of a home than they could afford before.”Once Campbell gets buyers on the phone, her dialogue is simple. “I explain the difference with the new loan limit,” she says. “I say, ‘If you could normally afford a $350,000 home, this might allow you to get a home up to $375,000.’” Her pitch has worked. “I had two people who were looking at renting, and once I explained the FHA program, it piqued their interest in buying today rather than waiting two years.”Alley has sent a postcard to buyers in her market explaining the new limits. On the front, she asks, “Could a FHA home loan be right for you?” On the back, Alley explains the benefits of the FHA program, including the low down payment requirement, the provision that allows sellers to contribute to buyers’ closing costs and the provision that allows gift funds to be used.“I’m hopeful this will open doors to buyers who haven’t been able to buy,” says Alley. “And maybe the people I sent it to aren’t in the market themselves, but they may have a son or daughter who can afford to buy but who doesn’t have the cash for the down payment, and the parents can help out.”The worst-case scenario for Alley is that even if the postcard doesn’t bring buyers in the door to take advantage of FHA financing, she’s still showing consumers that she’s smart and diligent. “Anything going out to my database that helps people understand that I’m still in the marketplace and shows I’m working hard for them—that helps.”Glenn Stein, broker/owner of Realty Executives Ocala in Ocala, turned to the Internet to get the new FHA information out to his target audience. He posted news of the FHA changes on his Web site. Though he hasn’t had much response to his Web post, he’s also discussed the new FHA rules with buyers when he thinks the program might fit their needs. “Sometimes we can overcomplicate the jargon. Buyers are simply interested in, ‘Can I buy this house?’” he says. “So it’s a simple conversation with the sales associate and buyers in the car between showings. Most people think the FHA program is only for $100,000 houses, and when we’re showing houses right at the top of the FHA limits, we say, ‘Do you realize you have the option of 3 percent—not 5 or 10 percent—down on this house?’”John C. Davison, broker/owner of The Davison Real Estate Group in Longwood, recommends that you also broaden the discussion to include other housing assistance programs. “I’ve begun to target first-time buyers more frequently to take advantage of the possibility of putting clients into a house with very little money down,” he says. “I even take it a step further and tell them about no-money-down options through government down payment assistance programs. With some programs, like [the Nehemiah Program], the Dream Homeownership Program and Family Home Providers, sellers can contribute up to 3 percent of the purchase price.”Will the New Limits Work?Sales associates are cautiously optimistic that the new FHA loan limits will bring buyers back onto the homebuying playing field. Davison believes they’re an asset, but not for all buyers. “There are definitely people in our area that the new FHA limits will help,” he says. “But lenders still have standards that need to be met, and we all know how tight those standards have become. Also, the increased loan limits do nothing for people who are saddled with selling a house to be able to move into another house. It’s like the corner candy store in a small town. It may double its size, but how much candy can people in that area buy?”For Terry Dona, the new limits are already helping buyers beat tough down payment requirements. The sales manager at Metro Mortgage and Gulf Coast Associates in Bonita Springs, who’s also a mortgage underwriter and HUD lender, says that since the new FHA limits were introduced, she’s seen double the number of buyers using FHA loans to purchase homes. “Probably the biggest issue, especially for younger buyers, is the ability to get a down payment together,” she says. “With not-for-profit down payment assistance programs, buyers with a decent job and good credit can get into a house for as little as $500. That makes a huge difference, and it makes it possible for quite a few people to buy.” G.M. Filisko is a Chicago-based freelance writer.

Fernandina Beach Market Trends

www.trulia.com/real_estate/Fernandina_Beach-Florida/

Challenge to Tax Swap Goes to State's Supreme Court

The Tampa Tribune
Published: August 20, 2008
TALLAHASSEE - The Florida Supreme Court is getting a challenge to a ballot proposal that would trade a property tax cut for increases in other taxes.
An appellate court Tuesday passed the case on without ruling. The state is appealing a trial judge's decision to take the proposal off the Nov. 4 ballot.
The Supreme Court set oral argument for Sept. 8.
Amendment 5 would cut property taxes about 25 percent by eliminating a part that goes to schools. The Legislature would have to replace it - about $9 billion a year - from other sources.
A circuit judge ruled a ballot summary is misleading because it fails to say the replacement requirement would be for only a year. After that, school spending could be cut.
The Associated Press

CSX unveils $40 million track expansion- good news for Nassau County

CSX unveils $40 million track expansion



shipping boom Ahead Projections call for cargo to triple. Rails not roads The plan is to relieve vehicle traffic at the port.

By DAVID HUNT, The Times-Union
CSX Corp. announced a $40 million plan Monday that it hopes will untangle truck congestion along Jacksonville's Heckscher Drive as the region braces for a shipping boom.
The Jacksonville-based railroad company plans to upgrade tracks and build a link through Nassau County to connect the rails along U.S. 17 to the main line running north toward Waycross, Ga. The idea is to divert cargo containers from the road while also avoiding rail congestion downtown.
Jacksonville Port Authority officials have stressed a need for rail, as projections call for a tripling of cargo in coming years largely because of the TraPac terminal under construction at Dames Point and a pending agreement with Korean shipping company Hanjin.
Millions of dollars will be needed to upgrade the road system - $11.8 million has been committed so far for what authority Executive Director Rick Ferrin called "a quick fix" to ensure nearby roads can handle initial TraPac traffic.
But there are several factors that need to come together before CSX can lay out a definitive plan to put the cargo on rail from TraPac.
The $40 million will come from the state, which is planning to pay CSX $150 million to acquire rights to 61 miles of track in Central Florida for a commuter rail service. But lawmakers are debating how to insure the line.
Clarence W. Gooden, CSX's chief commercial officer, said if the debate kills the deal, CSX still plans to complete the rail upgrades even though the corporate capital budget is planned for the next three years. That raises the question of when the money would be available.
Also, Jacksonville Port Authority is collecting ideas from investors interested in building a loading ground to move containers from ships to trains. Gooden said exactly how CSX will proceed with construction depends on where the loading ground will be established, as well as several pending property purchases.
CSX spokesman Gary Sease said the basic idea is to move the cargo to the A-line, a main route running north toward Waycross.
To do so, a rail connection must be built to the line from the Yulee area, where cargo will initially be directed along the tracks that parallel U.S. 17, he said.
Jacksonville Transportation Authority figures projected a 39 percent increase in traffic along Heckscher Drive by 2025 even without the port expansion as the road grows important as an east-west route for daily commuters.
Monday's announcement was attended by Mayor John Peyton, City Council members and U.S. Rep. Corrine Brown of Jacksonville. Each addressed a need to grow the port in a way that maximizes economics without burdening neighborhoods.
"In this funding environment, where we have strained resources, our partnerships are going to become more important," said Peyton, who said the port authority was at "an amazing crossroads" as it prepares for new shipping lines and the widening of the Panama Canal, another move expected to increase shipping traffic.
Gooden said he's expecting two trains in and two trains out daily.
Each could be carrying up to 280 cargo containers that otherwise would be loaded on the back of trucks.
That's a potential to remove more than 1,100 trucks from the road every day, a crucial reduction as a recent First Coast Metropolitan Planning Organization study projected the shipping increases would put more than 8,000 more trucks on the road daily by 2020.
Steve Rieck, executive director of the Nassau County Economic Development Board, said while the details of a new connector rail line in Nassau are still sketchy, rail is critical to the county's industrial development and expansion would help.
"If they do go through with this rail infrastructure improvement, it will make Nassau County more attractive to warehouse and distribution facilities that can take advantage of the new rail to points north," he said.
Times-Union writer Kevin Turner contributed to this report.
david.hunt@jacksonville.com,

A Free Wind Inspection may save you money on your insurance

HOW FAST CAN YOU SAVE MONEY?Florida's My Safe Florida Home (MSFH) program wants to get the word out, and will do so in many state markets by advertising on TV and radio. And the message will be funny. The commercials will ask: "How fast can you save money?" and then use satire to compare the ease of signing up for a free home inspection with money-saving techniques that don't work nearly so well. The MSFH program has provided more than 172,000 free wind inspections to Floridians, more than 70 percent of whom saved an average of $224 - without making a single improvement - because the report confirmed that some mitigation already existed and their current insurer dropped the rates. Floridians whose homes have received free wind inspections from the MSFH program may also be eligible to apply for matching tax-free grants of up to $5,000 to make improvements. Floridians in single-family, site-built homes are eligible. The MSFH program has also partnered with local governments and the Volunteer Florida Foundation to offer low-income homeowners an opportunity to strengthen their homes against natural disasters. For more information, visit www.MySafeFloridaHome.com or contact the program toll-free at (866) 513-6734.

Land Bargain Hunters

Published 3/1/2008 in Florida Trend

Land Investment
Land Bargain Hunters
by Richard Westlund


Jim Harvey shops for deals at Paloma in Palm Beach Gardens. [Photo: Michael Price]
As overextended builders and developers shed unwanted home sites, the coming year is likely to offer the best deals of the decade for those looking to invest in Florida land.
“Prices have dropped about 20%,” says Sean O’Cuinneagain, a sales associate at Re/Max Action First in Clearwater. “There’s been a big slowdown in land sales throughout the Tampa Bay area in the last 18 months.”
In Ocala’s horse farm market, tracts of rural land are also down about 20%.
Lewis Goodkin, president of Goodkin Consulting in Miami (and a Florida Trend contributor), says there’s still plenty of interest in Florida land. “Unlike past turndowns when finding buyers for land was like pulling teeth without anesthesia, this time other builders and institutional investors like hedge funds are in hot pursuit of opportunities to buy at a discount,” he says.
Tampa-based Metro Development Corp. recently bought 8,300 central Florida home sites at a bargain price from Miami-based Lennar Corp., which reported a $514-million loss in third-quarter 2007. Metro also acquired another 1,000 lots from M/I Homes and now has about 30,000 lots in Florida, which it plans to sell once the market recovers. Morgan Stanley Real Estate purchased a 60% interest in 11,000 Lennar sites nationwide.
Bonita Springs-based WCI Communities is also unloading inventory. It sold $5.3 million in Florida land during the third quarter. A year earlier, it sold only $1.4 million in land.
On the Treasure Coast, Kolter Land Partners paid $45 million in December for M/I Homes’ portfolio of 500 residential lots and homes in Palm Beach and Martin counties. Two years ago, the same portfolio would have cost more than $60 million.
“While the current downturn in the residential market has significantly reduced demand in the short term, we believe that long-term demographic trends make the Southeast United States highly attractive,” says Jim Harvey, president of Kolter Land Partners’ Eastern Division.
Hedge funds scouting Florida for deals understand that when the market rebounds, land is the critical ingredient to any development deal, Goodkin says. “There has always been resistance to holding an asset that doesn’t generate income during the holding period, but in a world where there is an enormous amount of money looking for superior returns, land is an excellent candidate to achieve that goal.”

Fernandina 'Historic District' News
February, 2008 For and about Fernandina Beach's Historic District Publisher/Editor Chuck Hall
,
"An Act Of Congress"
One of our downtown Fernandina businesses, Amelia River Cruises, is embarking on a great new service. You may have heard of this; they are ferrying passengers to and from St. Mary’s, via the riverways. It turns out to be a very nice trip. Takes about an hour, and only costs about $15.00 per passenger. Along the way, you get a real education about the history of our fair island and river, plus you get to see lots of beautiful scenery and lots of creatures in their wild habitat.
Well, to make things even more interesting, the owners are hoping to secure the right to make calls upon Cumberland Island as well. Currently, all traffic to the Cumberland Island National Seashore Park is directed through St. Mary's only. There are approximately 40,000 tourists per year that visit the Park! That's a lot of people! In order to get permission to make that port call, there would have to be an Act of Congress to get the permission! Really, an Act of Congress! Seems that the rules set down by Congress concerning the Park were done many years ago, and it may be the right time now to revisit the limitations concerning traffic and boats to the Park. Additionally, the Cruise company is working with the City of Fernandina to construct a small information and ticket kiosk on the dock at the City Marina. This kiosk will sell tickets for the St. Mary’s cruise as well as their other river cruises. We hope that the kiosk will be useful as an information center for other events and businesses as well. They are currently working with the Historic District Council concerning the design of the kiosk. HDC has the design approval responsibilities for the CRA District.
Are the Townhomes Coming?
If you are like me, there is an assumed link between decisions made, and results appearing. OK, what I mean is, when the City OK'd the townhomes for the Standard Marine Building property last year, I was just certain I would see the construction beginning right away.
Well, not so. I was doing some digging of my own, and I have an update for you on that time line to look for. After all, this has been dragging on for many months. This project, while only about 38 townhomes and condos, is actually going to be built in phases. Perhaps this is a good idea, considering the slower housing market right now. The grand old Standard Marine Building at the corner of Alachua and N. 2nd Streets will be first part of the construction. The plan is to renovate this, and it will contain two condos, a small retail space, and a parking garage. This all is set to start about May-June of 2008. The next phase will be the Townhomes themselves. This is a flexible project; allowing the waterfront homes to be built first, then as the sales market allows, the others can be built. Estimated start date is June-July 2008. The third phase:: the retail spaces on the waterfront. Now this has been very controversial, and the City has had to deal with the developer of this project, and every other waterfront owner there! This phase will take longer to start, as the State is involved, having jurisdiction over the river. This project includes a large boat marina. Above the retail space along Front Street will be two condos. Start date is approximately August-September 2008. HDC still has a great deal of say in the design of these buildings, and it is important that HDC hears citizens concerns before this is all finalized. We only get one shot at doing this correctly.
Got News???
Hey you guys, I could use a good story about the neighborhood. If you know of any property or people that should be highlighted let me know. There are good things out there and we need to share them!
Chuck Hall 904-261-6846 netthall@hotmail.com
This is a privately funded newsletter, not related to any government body.The opinions expressed herein are solely those of the publisher, unless otherwise noted