What a Day for the Real Estate Market!
Today may have been the most positive day in the last year for our beaten down real estate market. John Adams is reporting today, according to his sources, that Fannie Mae is lifting it’s 4 property limit. In other words, an individual can only have 4 Fannie Mae loans currently on his/her credit report under current FNMA policy. In order to understand the magnitude of this potential move, you need to back up a little bit. In August of last year, Fannie Mae cut off investors from financing more than 4 properties with an announcement known as 08-22. The previous policies allowed investors to have up to 10 financed properties on their credit report at any given time. The changing financial market and added risk was just too much apparently, and Fannie Mae felt they needed to do something. It was a bonehead move though because it crippled investors. Their once “easy” source of financing was severed, which meant they had to self finance or rely on the help of private money. One thing that the investors do is buy ugly, unwanted houses, the glut of the housing market. They have vision for what others don’t, and they don’t get emotionally involved with property. This Fannie Mae announcement created a ripple effect in the investor network, and the rise in foreclosures, short sales, and distressed properties only compounded the trouble in the housing market. The investor network and many of us in the real estate business have been lobbying FNMA to get their heads in the game and lift this silly policy. The results of reverting back to the 10 property limit could really help us mop up the excess inventory, and we will need it if the rising tide of short sales comes through like many are predicting. John is reporting that we will see an official announcement from Fannie Mae in the coming weeks, and let’s keep our fingers crossed.
This exciting news coupled with the new tax credit passing through the Senate, courtesy of Senator Johnny Isakson from Georgia, and we have two awesome pieces of news for our beloved real estate market today. The tax credit would incent ANYONE who may buy a home in the current year with 10% of the home’s purchase price up to $15,000. The home has to be the primary residence, and the homebuyer must live in the home for at least two years. This new credit would replace the current $7,500 credit available over the next few months ONLY to IRS-qualified first time homebuyers.
Hello Mr. and Mrs. Buyer! You have a perfect storm vastly in your favor right this minute, and the stars won’t align like this forever. You’ve got depressed values, the lowest interest rates in the last 30+ years, high inventory, and now the government is potentially paying you to buy. What else do you need?
Stay tuned here for more developments that are relevant. As always, if we can help you in any way, please know it would be our pleasure.
