Kingsland Georgia Homes For Sale

This is an excerpt from the NAR Government Affairs Update: 

NAR Strongly Supports Housing Bill and Clarifies Rumors Concerning Downpayment Assistance Provisions

The Housing bill being considered in Congress this week does NOT eliminate all downpayment assistance programs from eligibility for FHA insurance.  The legislation would only prohibit seller-funded downpayment assistance, or assistance from someone who financially benefits from the transaction.  Other forms of assistance - such as family members, government-sponsored programs, or gifts from non-profits would still be permitted.  The Housing bill also contains many reforms that are critical to housing markets, including FHA reform, GSE reform, a homebuyer tax credit, and permanent increases to the FHA and GSE loan limits.  This bill will help millions of American families avoid foreclosure and safely and affordably achieve the dream of homeownership.  

FHA is the only mortgage program that has allowed seller-funded downpayment assistance.  However, FHA’s recent default rate is troubling. Due to the current performance of its loans, FHA must receive a federal subsidy for the first time in its history, or raise premiums on borrowers in order to remain solvent.  This is primarily due to loans with seller-funded downpayment assistance, which have a default rate 3 times higher than other FHA loans.  Loans that receive downpayment assistance perform less well than loans without downpayment assistance.  A recent GAO study found that loans with seller-funded downpayment assistance experienced more than double the risk of delinquency than loans with other types of downpayment assistance, and almost three-times the risk of loans with no downpayment assistance.  (Additional Action Needed to Manage Risks of FHA-Insurance Loans with Downpayment Assistance, United States Government Accountability Office, November 2005.)  

Recent studies have demonstrated that seller-funded downpayment programs often result in inflated home prices.   These studies showed that homes sold using this type of downpayment assistance typically sold for 2-3% higher than comparable homes without downpayment assistance. (Seller-Funded Down-Payment Assistance Changes the Structure of the Purchase Transaction and Negatively Affects Loan Performance, United States Government Accountability Office, June 22, 2007.)  When a borrower takes out a mortgage on a home with an inflated price, not only are they at greater risk for foreclosure, but the resulting inflated price can have ramifications to the housing market in that community.  Home sales prices are used as comparables to determine the price of other homes. Inflated prices overstate the market demand and can lead to exaggerated home sales prices in the neighborhood.  This can magnify what housing affordability problems already exist in these communities.  In addition, inflated home prices impact the risk to the FHA fund by increasing the “severity of individual claims on the FHA Insurance Fund and FHA losses on claims paid on such mortgages.”(HUD Proposed Rule, “Standards for Mortgagor’s Investment in Mortgaged Property”, Federal Register, May 11, 2007, Page 27049.)  

The effective date for the prohibition of seller-funded downpayment assistance programs is October 1, 2008.  We hope that in the remaining months, Nehemiah and other such providers will be able to develop a business model that does not rely on seller-funded downpayment assistance, but instead will provide downpayment assistance that will help homeowners without putting them at risk for foreclosure. (end excerpt)

This Housing Rescue Bill may or may not be a good thing for America.  Personally, I don't have enough information to make an informed decision.  What I do know is that many people bought homes using the down payment assistance program (i.e. Nehemiah, Futures, etc.).  Once these programs are gone home buyers will be required to have a 3% downpayment or find alternative downpayment assistance when using FHA.  This will make home buying a little harder for people that have not saved enough cash to have a 3% down payment.  Eventually other sources of assistance may come available, but I don't expect it to happen quickly.  It may even take a couple years before a wide spread alternative becomes available.

If you are thinking of buying a home and need down payment assistance you may want to look at buying now.  Interest rates are still very good, but they may experience inflation driven increases.  Plus house prices are down from the sliding real estate market.  Low interest payments, plus low home prices, plus down payment assistance going away on October 1, 2008 is a solid reason for looking at this market as an opportunity to buy.  If you are interested in learning more about real estate visit my site at www.KingslandGAHomesForSale.com or "Just Call Paul" at 912-322-1350.

Personally, I'm a big fan of the entrepreneur and real estate investor Robert Kiyosaki, but even he considers himself a small investor compared to Donald Trump.  I have read various books by these two real estate gurus, and whether you like them or not, they sure know their real estate - on a global scale.

Now I sit here in Kingsland, Georgia studying our local real estate while I'm also keeping one eye on how the national market and media are impacting the Kingsland, GA homes and our ability to sell them.  Anyone who has turned on the TV in the past 12 months has heard about the impact that real estate has had on the overall economy and how the inventory of homes for sale have climbed.

Although the news seems to be strictly negative, it is important (to your pocket book) that you keep in mind the news is not bad news for home buyers in many real estate markets.  In my opinion this includes the Kingsland, GA Real Estate Market.  The news is actually a breath of fresh air for home buyers.  In 2005 home buyers were at the mercy of home sellers (a seller's market) and now in 2008 the buyer has more options and better leverage (a buyer's market).  If you plan on living in your home for three years or more you are in a solid position to buy a home while prices are lower and enjoy the ride UP!!

Here is what Donald Trump had to say about the current market (posted on his Trump University Blog on 5/12/08).  I made no alterations other than to remove any links.

"It’s hardly a surprise but in the midst of today’s terrible economy and the nation’s housing crisis, the majority of Americans say they don’t plan to buy a home anytime soon.

In fact, more than a quarter of homeowners worry that their home will lose value over the next couple of years, and one in seven mortgage holders are afraid that they won’t be able to make their monthly payments in time over the next six months.

People are worried that housing prices will continue to fall which is good news if you want to buy but obviously terrible if you have a house to sell.

In addition, we have record-high foreclosure rates and an estimated 9 million homeowners actually owe more on their homes than they are actually worth. If you’re in that situation, the best thing you can do is to sit tight if you can and try to weather out the storm.

If you’re one of the fortunate few who is looking to buy, you could hardly be in a better position. Shop around, find a house and make an offer. Chances are, any good deal will get accepted and if you have decent credit you should be able to get financing.

I think the housing market is going to get better and it’s going to get better fairly quickly. The market is depressed and that’s when you want to go in. So if you have the money, now’s when you want to go out and buy.

But that’s just my opinion. After all, what does Donald Trump know about real estate!"

Don't take it from Paul Carlson.  Either take it from Mr. Trump or use a little logic and ask yourself: "If I'm considering buying a Kingsland, GA Home, do I want to buy when the prices are low or do I want to wait until they climb back up?"

Whether you buy a Kingsland, Georgia Home now or you wait until prices are climbing, make sure you know how to buy properly.  I cover the process on my site at http://www.KingslandGAHomesForSale.com and encourage you to read the information contained on my site.