by J. Craig Anderson – May. 20, 2009 12:00 AM
The Arizona Republic
A U.S. Department of Housing and Urban Development official said Tuesday that HUD would move forward with a plan to let first-time homebuyers use the currently available tax credit of up to $8,000 as collateral for “bridge loans” to cover the down payment on Federal Housing Administration-insured mortgages.
HUD spokesman Brian Sullivan said Phoenix-area lenders misinterpreted the department’s withdrawal of an official communication, known as a “Mortgagee Letter,” announcing the program last week.
“There was a premature posting of a Mortgagee Letter,” Sullivan said to explain the withdrawal, adding that the program’s details had not been finalized.
Sullivan would not say when the bridge-loan program would be initiated, or whether it would be substantially different from what originally was announced.
A week earlier, real-estate agents and home builders had issued statements supporting a HUD proposal to let banks, non-profit organizations and local governments offer short-term bridge loans to cover the down payment for first-time buyers eligible for the tax credit.
Total listing active in metro Atlanta is at 57,000 compared to last year at 110,000. These are signs the market IS RECOVERING!
HUD Secretary Shaun Donovan yesterday said FHA would permit lenders to allow first-time borrowers to use the $8,000 tax credit recently put into law as all or part of a downpayment on a home.
Donovan’s remarks at the National Association of Realtors’ legislative meeting in Washington represented the second major news announcement for HUD this week; earlier this week, Donovan announced that HUD had withdrawn its “required use” provision in final Real Estate Settlement Procedures Act rules.
“We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment,” Donovan said. “So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to ‘monetize’ the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit.
Donovan cited estimates by the National Association of Home Builders that the tax credit could stimulate 160,000 home sales across the nation, of which 101,000 could be first-time buyers using the tax credit. Another 59,000 existing homeowners could buy another home because a first-time buyer purchased their home, he said.
Donovan said FHA will publish details of the plan shortly. You can find the information posted at
Who said BPO’s were all that? Yes, it might be a form of income if you’re desperate but I can’t see working for minimum wage! And, that’s about what it boils down to.
Rather than BPO ”Broker Price Opinion”….they should call it TPO “Their Price Opinion”! Because if you ask me (and I know you didn’t) all that the banks really want…is for you to confirm in writing what they want to hear. If you give them the “true value” in this market (and in the subject’s neighborhood), they’ll just kick it back to you until they get the price THEY WANT. So it could mean endless hours searching for sales & listing comps to satisfy what “they” want…..while, in the meantime, your measly pay for doing this BPO/TPO drops by the minute.
And, that’s all I’ve got to say about that!
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