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housing crisis

7 Home Loans for Teachers (and How to Apply for Them)

November 26, 2019

Home Loans for Teachers

photo: Monashee Frantz/Getty Images
house outline: Greg Chow

People, we have a crisis on our hands: a teacher crisis. One reason for the squeeze: real estate. Rising housing costs and interest rates can prevent teachers from getting a mortgage and living in the districts they serve, creating a lack of teachers everywhere, from Seattle to San Francisco, to Virginia’s Fairfax County.

But did you know that several organizations and lenders offer home loans and mortgage help for eligible teachers? Below are seven programs and lenders that can help teachers get funding for a home.

1. Good Neighbor Next Door

Developed by the U.S. Department of Housing and Urban Development, this program was created for eligible teachers and other civil servants, including firefighters, law enforcement officers, and emergency medical technicians.

It offers a 50% discount on HUD-owned homes located in “revitalization areas”—regions with high foreclosure rates and low homeownership—nationwide.

Here’s the catch: Applicants are not permitted to own a home already. They must also commit to using their new house as a primary residence for three years—if they don’t, they will be required to pay the full cost. See homes available through the loan program at HUDHomes.

2. HUD Teacher Next Door

HUD’s Teacher Next Door connects educators to a wide variety of home loans and down payment help for teachers—including Good Neighbor Next Door—helping applicants find local programs and organizations that reduce mortgage rates and closing costs and provide down payment rebates.

Housing in this HUD program isn’t restricted to federally designated revitalization areas, and there are no residency requirements.

3. Educator Mortgage Program

Mortgage bank and lender Supreme Lending’s Educator Mortgage Program offers up to $800 in loan discounts on closing costs and real estate agent fees on home loans for teachers, as well as a speedy loan turnaround and a $400 donation to the school program of their choice.

Available for all teachers and school district employees, the program requires a minimum credit score of 620, but it doesn’t discriminate based upon previous bankruptcy or foreclosure.

4. Homes for Heroes

Intended for firefighters and military veterans as well as teachers, this program discounts 25% of your real estate agent’s fee when buying and selling, as long as you use an agent or broker who has signed up as a program affiliate.

Applicants also receive reduced closing and home inspection fees.

5. Community lending programs for educators

Through a partnership with the United Federation of Teachers, educators may receive a loan through the Union Assist Program at ICC Mortgage. The loan program offers zero or reduced interest, lower fees for processing or underwriting, as well as financing discounts.

6. Home loans for teachers at the local level

For Californians working in an underperforming school, the Extra Credit Home Purchase Program can provide mortgage tax credits to reduce the total they owe to the federal government. Participants must be first-time buyers and meet income and home price limits, which vary by county.

In Baltimore, the Housing Authority offers $5,000 toward a qualifying down payment on home loans for teachers, and the Texas State Affordable Housing Corp. offers fixed-rate Teacher Home Loans and down payment assistance grants.

Many states offer similar home loans, help with down payments, and mortgage assistance for teacher programs. In many cases, Teacher Next Door can connect qualified buyers with the appropriate grants, or you can search for home loans for teacher programs in your state.

7. Teacher-specific housing

In some areas, housing designed or earmarked for teachers is available. North Carolina teachers in Dare County can sign up for DARE, affordable housing complexes rented at below-market rates.

For New York City residents, Teacher Space New York connects teachers with affordable housing, based on income. And in Baltimore, Union Mill, an “urban oasis for teachers and nonprofits,” offers up to a $600 rent discount for teachers.

Your local school district or teachers union should have more information about available educator-only housing.

The post 7 Home Loans for Teachers (and How to Apply for Them) appeared first on Real Estate News & Insights | realtor.com®.

What Is a HomePath Property? A Foreclosure With Surprising Advantages

August 24, 2019

What is a HomePath Property? A Foreclosure With Surprising Advantages

Daniel Acker/Bloomberg via Getty Images

HomePath properties and the 2008 housing crisis go hand in hand. Until the housing bubble burst in 2008, the Federal National Mortgage Association, aka Fannie Mae, had one main job: to keep mortgage loan money flowing to help American home buyers fulfill their dreams of homeownership.

Then the Great Recession happened, and as 4 million homes went into foreclosure, Fannie Mae suddenly (and somewhat reluctantly) became the country’s largest homeowner. To find new owners for those properties, Fannie Mae created HomePath, a program that sells foreclosures to eager buyers.

“During the foreclosure crisis, we had many properties come back to us,” says Julia Dugger, Fannie Mae’s director of marketing and agent performance, based in Washington, DC. “Suddenly, we were a very large player in the primary market.”

How HomePath works

Fannie Mae had never worked directly with home buyers, but at the height of the crisis it had 162,000 houses to sell. The HomePath program maintains, upgrades as needed, and sells Fannie Mae–foreclosed properties through a network of contractors and real estate agents around the country.

HomePath.com is the online listing service where you can easily find such properties in each state.

Home, Sweet HomePath

Fannie Mae has one goal for the 55,000 HomePath single-family homes and condos currently on the market: Get a fair market price for a foreclosed property.

“It’s important for us not to give away the farm,” says Dugger, correcting a common misconception that the HomePath program has rock-bottom bargains. “There’s no upside for us to depress the market further.”

After Fannie Mae forecloses on a property (Dugger says they strive to do everything possible to avoid doing so), it cleans the place up, adds some cosmetic flourishes if needed, and spruces up the landscaping to increase curb appeal and make it move-in ready, just like you would.

“We are a huge consumer of paint and carpet to freshen up” the houses, Dugger says. “No one will want to pay full price for a house that looks like the foreclosure on the street.”

A local listing agent who has a contract with HomePath then markets the property like any other listing. But here’s where HomePath properties differ from others.

Fannie Mae HomePath has a soft spot for owner-occupants who will make a house a home. So for the first 20 days a property is on the market, Fannie Mae considers only contracts from owner-occupants and nonprofits that help them.

“We want someone who is moving into the home to stay there and care for it,” Dugger says. If the property doesn’t sell in the first 20 days, then Fannie Mae lets flippers and other investors bid.

Advantages of a HomePath property

Dugger says HomePath properties have three major advantages.

  1. The HomePath program gives owner-occupiers (home buyers who will use the home as their primary residence) 20 days to act before investors. Investors often gobble up foreclosures before the little guys even know they’re available.
  2. Fannie Mae HomePath will pay up to 3% of closing costs, an average of $5,000, for first-time home buyers who successfully complete its six-hour, online homeownership training class. The class explains the fundamentals of buying, owning, and maintaining a home.
  3. All properties are listed, and all offers are accepted online at HomePath.com, which makes the process “transparent,” Dugger says. “Fannie Mae can see all offers, and we select those that are the highest and best.”

If all goes well, eventually HomePath will have close to zero inventory. At least, that’s what Fannie Mae hopes.

“We’d love to go out of [the home-selling] business,” says Dugger, who admits that’s a long shot. In the meantime, “we’ve built an infrastructure to support the volume that comes, and we’ve changed the perception of foreclosed properties. More owner-occupants are interested in looking at foreclosures than ever before.”

Financing a Fannie Mae HomePath property

Fannie Mae has several financing options to help you purchase HomePath real estate. Fannie Mae loan options are designed especially to help multigenerational home buyers, as well as low- to moderate-income households.

Fannie Mae HomePath mortgage products allow for innovative underwriting flexibilities (such as counting income from a rental unit or boarder), energy-efficient upgrades, and second mortgages. Fannie Mae can also include home improvement costs in your home loan.

You still need a down payment and a credit score to get a loan, but the down payment required may be lower, and your down payment can be from more flexible sources of funds. You may have to pay private mortgage insurance, but you can cancel the mortgage insurance payments when your equity reaches 20%.

Of course, you can always get a loan from a mortgage lender if you have a good credit score and enough cash for your down payment and closing costs. You may want to compare mortgage rates and get pre-approved by a lender before you start shopping for a home.

The post What Is a HomePath Property? A Foreclosure With Surprising Advantages appeared first on Real Estate News & Insights | realtor.com®.

What Is a Micro-Apartment? Even Tinier Than a Tiny House. A Huge Trend Explained

October 24, 2018

What is a micro-apartment? It’s the urban equivalent of a tiny house—a small dwelling, typically under 300 square feet, some as little as 100—that is gaining popularity in pricey cities where larger apartments are financially out of reach.

These pint-sized pads give people a chance to live in the thick of things without blowing their paycheck … that is, if they’re willing to do some serious downsizing. Here’s the lowdown on micro-apartments, where you can find them, and how they make diminutive dwellings far more comfortable than you might imagine.

Where to find micro-apartments

A decade ago, micro-apartments would have been illegal in most cities. But the dearth of affordable housing options for singletons and lower-income individuals prompted a change in zoning regulations so developers could build smaller dwellings to meet this pent-up demand.

“Cities like New York City had size regulations amended in order to accommodate construction for these über small apartments,” says Steven Giles, a real estate agent with Douglas Elliman.

In 2015, New York City unveiled its first micro-apartment building, Carmel Place, leasing units as small as 260 square feet. Their clever design—fold-out beds, mini-balconies, space-saving services to stock your fridge and do your laundry—made living in a shoebox seem so chic, a bunch of other developers began carving up their own properties into smaller parcels.

micro apartment
A micro-apartment at Carmel Place in New York City

Carmel City

Other cities that have embraced the growing mini-apartment trend include Boston (Factory 63), Washington, DC (Moda17), Denver (Turntable Studios), and Houston (The Ivy Lofts). San Francisco, notorious for its exorbitant rents, features Panoramic, a micro-apartment project located in the SoMa neighborhood.

micro apartment
A micro-apartment at Panoramic in San Francisco

Panoramic

Main features of micro-apartments

Recognizing that certain features can go a long way toward making a small space appear large, many micro-apartments boast high ceilings, large windows, and balconies, which create the illusion of space. Rooftop decks, patios, and other common areas offer a chance to entertain guests without needing to squeeze them into your cramped “home” per se.

Within these units, modular furnishings create a flexible space that can serve different needs, depending on what’s desired. A comfortable, 5-foot sofa with a hidden queen wall bed conveniently opens with one hand, while the coffee table converts to a work desk or dining table. Micro-units may also feature sleek, full-service kitchens. Others have kitchenettes, with two stove burners instead of the usual four and a slimmer fridge.

Some micro-apartments have desirable amenities such as free Wi-Fi and housekeeping, which make tiny spaces that much more tolerable. Others come furnished, so you can avoid the potential headache of figuring out how to fit your futon or Murphy bed in on your own.

How much do micro-apartments cost?

If you’ve had your heart set on living in a coveted but pricey location and don’t have the funds to pay up for a large space, these micro-units might be the solution you and your budget have been dreaming of. But don’t assume that their small size means they’re cheap.

Depending on where you choose to live, you’ll still pay a pretty penny compared to what you’d get in the ’burbs. For example, units in Manhattan’s fully occupied Carmel Place range from roughly 260 to 350 square feet, and still command upwards of $2,500 per month. In Los Angeles, One Santa Fe rents 474-square-foot studios for $1,975 per month.

Micro-apartments are primarily prominent in the rental market, but there are exceptions out there. In Washington, DC, buyers can pick up condos ranging from 350 to 680 square feet in the ultra-hip Adams Morgan neighborhood for $249,000 to $549,000. New York City also offers micro apartments for sale, such as this Greenwich Village studio at $479,000 (pictured below).

micro apartment
A micro apartment for sale in New York City

realtor.com

Is a micro-apartment for you?

If you long for big-city life on a budget but crave more privacy than you’d have with roommates, micro-apartments may be just the ticket. If you’re single and focused on your career, chances are you’re not spending a ton of time at home anyway. Why pay an outrageous amount for a place where you only sleep and shower?

“Renters for micro-apartments are often young, single millennials,” Giles says. “In some cases, micro-apartments are offered as affordable housing, where there’s an income ceiling in order to qualify. Some people are looking for an alternative to the traditional picket fence and backyard, and I think micro-apartment living factors into housing alternatives.”

All of which suggests that you can expect to see this micro-apartment trend just get bigger and bigger.

The post What Is a Micro-Apartment? Even Tinier Than a Tiny House. A Huge Trend Explained appeared first on Real Estate News & Insights | realtor.com®.