March Announcements

VA Direct Financing Terminated
Mortgage Rates Expected to Remain low all year
New Construction on the Rebound
NAR Good Neighbor Awards
New rule protects homebuyers from Predatory Lending Practices

HUD Eliminates PUD Preapproval for FHA Mortgage Insurance
FY2004 proposed budget to Help Increase Homeownership
Homeownership Increasing
Affordable Housing Projects Get State Grants

VA Direct Financing Terminated

The Veterans Administration announced last week that it will no longer provide direct vendee financing to purchase VA repossessed properties, effective for all listings dated on or after Jan. 31, 2003. As of that date you can purchase these properties only with upfront cash or with outside financing. Offers can still be submitted with vendee financing on properties listed before January 31 if the bid period extends beyond January 31.

Good News...Mortgage Rates Expected to Remain low all year

While the economy is expected to improve gradually this year, NAR is predicting that mortgage interest rates should remain favorable and help to sustain strong levels of home sales. David Lereah, NAR's chief economist, expects the 30-year fixed mortgage interest rate to average 6.2 percent during the first half of 2003 before rising to 6.6 percent in the fourth quarter.
NAR forecasts 5.40 million existing-home sales in 2003, second only to 5.56 million sales in 2002. At the same time NAR expects 959,000 new-home sales, which would be down modestly from a record 976,000 sales last year. Housing starts are forecast at 1.69 million units this year, slightly below the 1.71 million units recorded in 2002.

New Construction on the Rebound

In January, builders began work on new homes and apartments at a seasonally adjusted annual rate of 1.85 million units, according to the Commerce Department. This marks the fastest pace of housing construction in 16 years, including the best single-family production in 24 years.

New single-family homes were constructed at a seasonally adjusted annual rate of 1.51 million units in January, up 2.1 percent from December and the fastest production pace since November 1978. The number is just below the fastest construction pace on record, 1.53 million single-family units started in December 1977.

NAR Good Neighbor Awards - Deadline: May 1

Have you done volunteer work that has improved the quality of life in your community? If so, REALTOR® Magazine wants you to enter the fourth annual REALTOR® Magazine Good Neighbor Awards. The Good Neighbor Awards recognize REALTORS® whose extraordinary commitment to community service has helped make their community a better place to live.
In November, five winners will be announced in REALTOR® Magazine and will be recognized at the 2003 REALTORS® Conference & Expo in San Francisco. Winners will receive travel expenses to the convention, a $7,500 grant for their community cause, crystal trophy and extensive coverage in the REALTOR® Magazine. In addition, five honorable mentions will receive $1,500 grants for their cause.

Eligible activities include work on affordable housing issues, educational programs, youth-related activities, or anything else that helps improve the quality of life in a community. If you would like to nominate yourself or someone you know, please call CBR's Lynn Hackworth, 614-475-4000x248, by May 1.

New rule protects homebuyers from Predatory Lending Practices

HUD has taken another step in its efforts to protect homebuyers from predatory lending practices by publishing a proposed "FR-4722 Lender Accountability for Appraisals" rule that makes lenders accountable for appraisals on mortgages insured by the Federal Housing Administration (FHA).

Predatory lending results when home purchasers become unwitting victims of lenders, sellers and appraisers, often working together. The unsuspecting homebuyers either purchase homes with sales prices far in excess of the fair market value, or are substantially overcharged with costs associated with obtaining a mortgage.
The proposed rule has been reviewed by Congress and will be published in the Federal Register.

HUD Eliminates PUD Preapproval for FHA Mortgage Insurance

In late January, the Federal Housing Administration (FHA) issued a Mortgagee Letter which eliminated approval of an entire planned unit development (PUD) as a precondition for placing FHA mortgage insurance on houses in that particular project. Before the HUD decree, developers of PUD communities could not offer FHA financing to home buyers unless the entire development had received FHA approval.

Under the old rules, the FHA subjected large-scale planned developments to lengthy reviews sometimes lasting several months - which are not required by the Veterans Administration or Fannie Mae and Freddie Mac. This action should significantly boost opportunities for families to use FHA-insured loans to purchase new homes.

FY2004 proposed budget to Help Increase Homeownership

President Bush's proposed fiscal year 2004 budget includes $31.3 billion for the Department of Housing and Urban Development to increase homeownership, promote affordable housing and create stronger communities. This funding allows HUD to continue building stronger communities and increasing homeownership.

While nearly 70 percent of all Americans own their own homes, less than half of African-American and Hispanic families are homeowners. Intent on closing this "homeownership gap, the following initiatives are being proposed to increase minority homeownership by 5.5 million by the end of the decade:

HOME Investment Partnerships Program (HOME).
American Dream Downpayment Initiative
Housing Counseling
Single-Family Affordable Housing Tax Credit.
Self-Help Homeownership Opportunity Program (SHOP).
Housing Choice Voucher Homeownership.
Housing Assistance for Needy Families (HANF) Public Housing Operating and Capital Funds.

A more comprehensive budget summary is available on HUD's web site at www.hud.gov/04budgethttp://www.hud.gov/04budget.

Homeownership Increasing

There are more homeowners in America than at any time in history, reflected in the record 67.9 percent annual homeownership rate for 2002, according to Census Bureau data. Last year's rate is up 0.1 percent from the previous record posted in 2001. Homeownership also increased for minorities to a record high of 49.9 percent in 2002, an increase of 0.8 percent.

Affordable Housing Projects Get State Grants

Three affordable housing projects in the Columbus area are receiving loans from the state Development Department's Ohio Housing Finance Agency.

The Columbus Housing Partnership Inc. will receive a $538,350 compensating balance loan and a $538,350 equity bridge loan to build Fairview Homes, 32 single-family rental houses. After a 15-year lease period, qualifying residents will be able to purchase their residences. The partnership will also receive an equal amount to build Southside Homes, another 32-unit project with the same 15-year lease-to-purchase option. Southside Homes is valued at $4.7 million.
Leads Community Action Agency in Licking County will receive a $625,930 direct loan to acquire and renovate the 102-year-old Avalon Building, converting it to 20 units of handicap-accessible housing. The $3.2 million project will include new mechanical and electric systems, new elevator and elevator shaft, a new roof and new sprinklers.