Tag Archive | "US Department of Housing and Urban Development"

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$50 million allocated to Georgia Neighborhood Stabilization

Posted on 13 September 2010 by Aaron Hofmann

The U.S. Housing and Urban Development (HUD) has set aside $50.4 million in Neighborhood Stabilization Program grants  for Georgia  as part of  $1 billion plan to help states struggling to reverse the effects of the foreclosure crisis.

State and local governments will be able to use the neighborhood stabilization grants to buy land and property; to demolish or rehabilitate abandoned properties; and/or to offer downpayment and closing cost assistance to low- to moderate-income homebuyers (household incomes not exceeding 120 percent of area median income).

Of Georgia’s $50 million allocation, the major components include:

  • State of Georgia: $18,679,977
  • DeKalb County: $5,233,105
  • Atlanta: $4,906,758
  • Fulton County: $3,094,885
  • Cobb County: $2,415,784
  • Gwinnett County: $2,065,581

“These grants will support local efforts to reverse the effects these foreclosed properties have on their surrounding neighborhoods,” said HUD Secretary Shaun Donovan, in a press release. “We want to make certain that we target these funds to those places with especially high foreclosure activity so we can help turn the tide in our battle against abandonment and blight.”

Since the housing crisis began, Georgia has ranked among the states with the most foreclosures. The Peach State had the sixth-most foreclosures in the second quarter and ninth-most in July, according to RealtyTrac.

The latest $1 billion in Neighborhood Stabilization Program funding is provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act and follows some $6 billion in similar funding in recent years. The two other rounds of Neighborhood Stabilization Program funding came with the Housing and Economic Recovery Act of 2008 ($3.92 billion) and the American Recovery and Reinvestment Act of 2009 ($2 billion).

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Understanding FHA short sales

Posted on 12 September 2010 by Aaron Hofmann

It’s important to understand that not all short sales are alike. You probably haven’t heard much about FHA short sales, but they’re coming. The advantage with an FHA short sale is that the US Department of Housing and Urban Development (HUD) lays out the rules on short sales for FHA loans. If you have a legitimate hardship, FHA will forgive you of all the debt and does not ask for a promissory note. HUD lays out their guidelines in “Mortgagee Letter 2008-43.”

Unlike the traditional short sale for conventional loans, you actually submit all the paperwork upfront to initiate an FHA short sale. Documents such as bank statements, tax returns, pay stubs, hardship letter and financial worksheet.

The short sale lender’s loss mitigation department will then review all the information. The next step is for the the loss mitigation department to order an FHA appraisal, which must be done by an FHA appraiser.

Once the appraisal comes back and the loss mitigation department has reviewed your documentation, they will issue an “approval to participate.” At that date, they are allowed to approve any offer that nets 88% of the appraised value. After 30 days has passed they are allowed to accept 86% of the appraised value. Finally, after 60 days have passed they are allowed to accept an offer that next 84% of the appraised value. Here is something that makes FHA short sales easier than normal short sales. You can start the process before you get an offer from a buyer.

Once you get an offer from the buyer, then the lender has 5 working days to approve or deny the short sale offer. If the offer meets the necessary parameters, then the rules state that they must approve it.

These clearly laid out rules make FHA short sales so much simpler than other short sales. One of the big advantages is that prior to putting your home on the market, you already have an amount that you know is approved, which is advantageous to you and to a buyer. One of the biggest concerns for buyers is the unknown of whether the short sale price will be acceptable to the bank and when, if ever, they will respond. With an FHA short sale, your Realtor can market your home as an approved short sale and clearly explain how quickly final approval will be received. This eliminates the common issue we see in the Atlanta short sale market where buyers lose patience and walk away and you’re left standing there looking for another buyer.

I am a Certified Distressed Property Expert and specialize in Atlanta short sales. Contact us today to discuss your situation and stop foreclosure.

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