Mortgage Programs

Illinois Housing Development Authority has added $12 million to the statewide mortgage credit certificate pool allocation effective July 7, 2009. This is from the Veterans’ program. This is only a portion of the Veterans’ allocation. The Veterans’ program is still active.

Program Highlights: The federal government allows each homeowner to claim an itemized income tax deduction for the amount of interest paid each year on a mortgage loan. The Mortgage Credit Certificate enhances this benefit. Homeowners with a MCC are allowed to use 20% of their annual mortgage interest as direct federal tax credit, resulting in a dollar for dollar reduction of their annual federal income tax liability. The remaining 80% of their annual mortgage interest will continue to qualify as an itemized tax deduction.

We'd discussed this last week as a growing trend and it is continuing.

Rates held even ground for most of last week.  Looking at the 5/1 ARM versus 30 Year Fixed comparison from last week, we were seeing about a .75% rate difference between the two loan products.

As of this morning, we seeing nearly a full 1% gap between these loans.  We're in the low 5's for the 30 Year Fixed, the low 4's for the 5/1 ARM.  With historically low 30 Year Fixed Rates, that's clearly a solid and popular choice.  However, if financial considerations of a growing family or an emptying nest make for a decision in the next 5 years, the ARM can be a fairly decent option.

As always, contact us for a custom comparison that is specific to your loan scenario.

New DU Refi plus limits up to 125%:  Fannie Mae & Freddie Mac are extending their refinance initiatives as of September 1. 

The Fannie Mae DU Refi Plus and Freddie Mac Relief Refinance Mortgage programs are both tools for obtaining a refinance when the primary issue is home value.  As is always the case with our friends at Fannie & Freddie, stay tuned.  The big announcement of July 1 doesn't actually change anything; however, at some point between now and September 1 the blocking and tackling of the new programs should be rolled out. 

Read Fannie's full release: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0923.pdf

The real estate web community has been buzzing following announcements at a federal level that would create vehicles to allow homebuyers to access the $8,000 Tax Credit as part of their closing.

Great news--In the next few weeks, the Illinois Housing Development Authority will be releasing the procedural details for making this possible.  Early whispers are that they'll leverage the same income limits as before and have some sort of limitation on the loan size.

As always, when this is official, we'll be among the first to roll it out.  We are a Full Eagle FHA lender which means we have the ability to directly approve an FHA Condominium Approval.