Archive for January, 2010
The Word on DAP and C4-HAP
Buying REO Homes, First Time Buyers
If your following local housing news you might be hearing allot about the C4-HAP program. The C4-HAP program is designed to assist qualified buyers purchase bank owned properties in specific census tracts. Tracts include Anderson Heights and Ravenwood in Anderson, all of Shasta Lake City and the following census tracts in the City of Redding 101-1,101-2,103-1,103-2,107.01-1,107.01-2,107.01-3,113-1,113-2,113-3,113-4,114-1.
If your wondering if your target neighborhood is inside one of these tracts you can check out the online mapping from the U.S. Census Bureau or just give me a call and I will give you a hand.
This is a pretty limited program and hard to tell if there is still time to take advantage of this opportunity but it can’t hurt to get on the list for an application. According to the City of Redding housing division the first 20 applications have already been sent out. As not everyone will qualify or complete the process they will keep moving down the list until funds are depleted.
There are some quirks that will have to be dealt with for buyers using C4-HAP funds. As with DAP (or Homebuyer Program as they now call it) the house must pass the Home Quality Standards ( HQS ) inspection to qualify for funding. In order to pass the home has to be pretty move in ready or the bank must be willing to repair. I have closed a few DAP / REO properties so I know it can be done but not every bank owned home will work out.
The really unusual twist to C4-HAP is the pre-offer appraisel process they are requiring. Unless this is modified to be a post offer value assesment it has the potential to make it very difficult to use C4-HAP. What I am being told right now is that a County Appraiser must assign a value to the property before offer is submitted to seller and the offer must be for at least 1% less than this value. This process could take a minimum of 24 to 48 hours once property is identified. This could pose a problem as move in ready REO homes are in such high demand these days we are seeing multiple offers the day they hit the market. I have posed this question to the various housing authorities involved with the C4-HAP and sounds like this could be modified but no answer on that yet. As for lender requirements I recieved this from one local lender.
- 3% down payment can be from gift
- Debt ratio’s requirement 26 – 49% (this will determine amount of C4-HAP contribution)
- Applicant must not own any other real estate
- Normal credit standards apply (use of Alternate Credit for thin profile is acceptable)
- Subject Property must be valued by County Appraiser prior to offer being submitted (offer submitted must be for 1% less than appraised value)
- Subject Property must meet HQS (Home Quality Standards)
As C4-HAP is only targeted for REO properties it can’t be used on a conventional seller owned home for sale. For the purchase of a non-REO home buyers should check with the City of Redding DAP or Shasta Lake City DAP to see if they qualify for their DAP programs (no longer called DAP but basically the same thing). Both now have funds for qualified applicants. Shasta County DAP should have funds as early as June 2010.
As always, feel free to call me for more info or to get started with the buying process.
Sphere: Related ContentLast decade getting a bad rap?
If you caught any of the year in review shows on TV or radio or read the paper you couldn’t help but notice the overwhelming focus on a decade lost to a financial meltdown. Could it be the 00’s are getting a bad rap? I came across an article in the Union Tribune that took a decade view of the San Diego real estate market and decided to apply it to Redding.
If you purchased a home in Redding in 2000 you would have paid on average about $150,000. By the end of 2009 the average sales price of a home in Shasta County was $215,000, a 43.3% increase over the decade. Because so much of our market is price range specific I took a look at a few area neighborhoods to see how they fared over the last 10 years.
Ravenwood had a whopping 73.8% increase from $123,076 in 2000 to $213,993 at the end of 2009.
Starview Estates homes were selling for $82,760 in 2000 and $135,720 by the end of the decade. A 63.9% increase.
Western Ranches had a 40.9% increase from $178,867 to $252,182 over this time.
Sunset Terrace was the worst performer I found at 12.4% ($250,227 to $281,413)
How long will it take for home prices to regain 2006 levels is impossible to predict but 2018 is the estimate quoted in the union-tribune article. If that were to occur here the average home purchased in 2010 for $215,000 would be worth $323,835 in 2018 (50.6% gain).
My take away from this? Real Estate remains a very solid long term investment. I believe that Real Estate is unique in that those with patience and discipline are able to leverage a relatively small initial investment combined with a monthly housing expense (mortgage instead of rent) and realize significant gains over time. It is my opinion that we are in a market most likely to produce very good returns for buyers.
Interested in taking advantage of this opportunity? Contact me at 530.515.9097 or reddinghomes@gmail.com to get started.
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