My favorite 30 Under 30 and YPN that I’ve never met, Nobu Hata, wrote an article for the YPN Lounge yesterday that I have to share and comment on.
He said that HUD wants the opinion of REALTORS put out in blog form… well, here it is, HUD!
- I don’t think that it’s awful that Buyers with a FICO of 580 or less would have to put a larger down payment. Reason being, is that I think they would wait a little longer to repair their credit a bit more so they could put down the typical 3.5% and they’d improve their chances of a lower APR by having a better FICO… i.e. good and great! And, not lending to those with a FICO of 500 or less makes complete sense.
- This one I’m not so favorable on (if at all). I have a few clients that have saved as much as their little hearts could allow and the closing costs (typically about 4.5%) still were more than they budgeted for. By allowing up to 6% for Seller Concessions (money toward the closing costs), I think you’re allowing more Buyers into the private club of homeownership. I, honestly, don’t see this being a negative in any way shape or form. If the Seller is willing to give it, why shouldn’t they be allowed to do this?
- This is a touchy one. If I side with tighter underwriting guidelines then I sound like I’m anti-Buyers but if I’m against it then I’m anti-us-getting-into-this-situation-again. Truth is, the guidelines are already pretty intense so I don’t really want to see them tighten up anymore but that doesn’t mean that I think that people should be able to buy any ol’ house their little heart desires. I think we’re being plenty tough on Buyers right now and don’t really see the need to make it anymore difficult on them.
I would love, love, love to get a Buyer’s feedback regarding this. I believe in FHA and HUD and think that if it weren’t for them, we might not be climbing our way out of this mess as fast as we are. They make the dream of homeownership possible for so many Americans and, as a 26-year-old, most of my peers. I look forward to getting to a place where we aren’t as dependent on one type of financing but, right now, FHA is a good 95% of my clients. I hope they keep in mind what we’re trying to do… build up homeownership.