Affordable Housing Programs Extended through December 2016

CF Funding is pleased to share that the Obama administration has announced the expansion of its affordable housing program. The program helps to support the construction of rental housing, and provides assistance to underwater homeowners in order to avoid foreclosures. The administration will be tapping into Treasury funds in order to support these programs. The Home Affordable Modification Program was set to expire at the end of 2015, but is now extended for another year. According to the Washington Post, the program has “reduced the payments of about 1.3 million homeowners, far short of its initial 4 million projection.”

The announcement was scheduled to coincide with the Making Home Affordable program’s 5^th anniversary, as the program was introduced in 2009 (after the housing crash) as a means of stimulating the economy and improving the housing industry. As CF Funding has shared previously, the housing industry has come a long way since then. In CF Funding’s April press release “Underwater Homes at Lowest Level in Two Years,” the lender shared news that foreclosures and shadow inventory are continuously decreasing, and that an increase in home values has allowed homeowners to regain equity. Increased equity has allowed many homeowners to refinance or invest in remodeling projects. However, more improvement is needed to reach peak levels of housing activity.

The program is now extended through December 2016, according to US Treasury Secretary Jack Lew. “We need to continue to be there for homeowners who are facing foreclosure, those who are struggling with increasing interest rates on their modified mortgages, and those whose homes are caught underwater,” Lew said. The program not only helps to construct affordable rental housing, but allows state housing finance agencies to underwrite multifamily FHA loans. In doing so, the finance agencies take on a risk, as they share any losses from those loans.

The new program will receive anywhere from 500 million dollars to 1 billion dollars in annual funds from the Treasury and the FHA, in comparison to 363 million dollars which the FHA provided to the program last year.

The administration also hopes to bring back the private sector in order to reduce the government’s role in the mortgage market. The market is currently dominated by Freddie Mac and Fannie Mae, which are government-owned mortgage firms. Lew said he has directed his team “to bring investors and securitizers together in the months ahead so we can uncover new paths to increase private investment.”

CF Funding will keep readers updated on mortgage and housing news on the lender’s blog at http://cffundingcorporation.blogspot.com .

Consumers Believe It Is a Good Time to Buy and Sell Homes

CF Funding is happy to share that consumer optimism has continued to rise in Fannie Mae’s April 2014 National Housing Survey, as 42 percent of respondents now believe it is a good time to sell a home. This is the third consecutive month of increases, reaching an all-time survey high. Experts predict an increase in housing activity due to these results, as well as the positive jobs data released this week and decrease in mortgage rates.

The monthly housing survey evaluates consumer attitudes in regards to homeownership, renting a home, the economy, and household finances. According to the survey, the average 12 month home price expectation rose to 2.9 percent, up from 2.9 percent last month. The percentage of respondents who believe home prices will rise in the next 12 months was at 50 percent, and the percentage who believe home prices will decrease was at an all-time survey low of 5 percent. The percentage of respondents who believe mortgage rates will rise decreased to 52 percent. Those who believe rates will go down has increased from 3 percent to 7 percent. The percent of respondents who believe it is a good time to buy a home stayed the same this month at 69 percent.

CF Funding is not surprised that the number of respondents who believe it is a good time to sell has risen by 4 percent to 42 percent, as the Spring season always brings out more buyers and sellers andmortgage rates are looking great. The fact that consumers believe rental prices will increase in the next 12 months may also affect the “good time to sell” factor. The percentage of respondents who believe the economy is on the right track has increased from 33 to 35 percent over the past month, and 14 percent expect their personal finances to improve over the next 12 months, in comparison to last month’s 12 percent. CF Funding is pleased to share that 25 percent of respondents say their household income is significantly higher than 12 months ago, up 4 points from last month.

According to Doug Duncan, senior vice president and chief economist at Fannie Mae, “Our April survey results suggest that consumer confidence is moving in a positive direction… consumer attitudes about the current home selling environment have improved and now are at the most favorable level we’ve seen in the survey’s four-year history. Consistent with Friday’s upbeat jobs report, concern about job loss among employed consumers also has hit a record survey low. These results are in line with our expectations for increased housing activity and gradual strengthening of the housing market going into the spring and summer selling season."

CF Funding will keep readers updated on the state of the housing industry as future housing surveys are released. To follow the lender on Facebook, visit www.facebook.com/cffundingcorp.  To view last months’ survey results, visit http://cffunding.com/index.php/news/consumer-attitudes-are-positive-in-march-2014-housing-survey/ .

Homeownership Vacancy Decreases in First Quarter 2014

The U.S. Census Bureau released its Residential Vacancies and Homeownership report today, revealing that homeowner vacancy rates have decreased since last year. The vacancy rate is now at 2 percent, about 0.1 percent lower than the first quarter of 2013. CF Funding is happy to see the economy recover as more homebuyers are able to fulfill their dreams of homeownership.

Although rental vacancy increased slightly (about 10 basis points to reach 8.3 percent), the vacancy rates are still relatively low in comparison to the past few years, and are now at levels last seen in 2001. The rental vacancy rate in the third quarter of 2009 reached as high as 11.1 percent. The homeowner vacancy rate in 2008 reached 2.9 percent. As CF Funding has mentioned on the Daily News Feed before, the housing industry is experiencing large improvements that show signs of economic recovery, which has led to rising house prices and interest rates.

In regards to prices, the first quarter of 2014’s median asking price for rent in vacant units was $766, and the median asking sales price for vacant for sale units was $139,200. Rental prices have been steadily rising since 1999 as seen in the chart. Home prices were rising steadily until the recession (2007-2009) where a visible decrease shows home values sinking. As the economy improves, home prices are now rising again, which has put equity back into the homes of many, allowing homeowners to refinance in recent years. Read more about refinance options on the CF Funding website here.

The U.S. Census Bureau also divided vacancy rates by region: Northeast, Midwest, South, and West, as well as Metropolitan Areas, suburbs, and others. The vacancy rate for rentals in cities was at 8.5 percent, versus the suburbs’ 7.7 percent, and other areas (outside Metropolitan Statistical Areas – or MSA’s) at 9.7 percent. The homeowner vacancy rate in cities was 2.3 percent, versus the suburbs’ 1.8 percent, and the rate outside MSA’s of 2.3 percent. Rental vacancy was highest in the South at 10.3 percent. Midwest rental vacancy was 8.5 percent, in comparison to the first quarter of 2014 where the Midwest vacancy was 9.5 percent. Northeast rental vacancy was 7.0 percent, not statistically different from the West at 6.4 percent.

Homeowner vacancy rates in the south were also the highest at 2.2 percent in the first quarter, followed by the Midwest (2.0 percent), Northeast (1.8 percent), and the West (1.7 percent). The age group with highest homeownership vacancy was age 35 or younger at 36.2 percent. The age group with the lowest home vacancies was age 65 plus at 79.9 percent. For more detailed information, visit www.census.gov.

Today, most home payments are similar to the cost of renting. CF Funding has been helping renters achieve their dreams of homeownership for over 10 years. The lender has programs available with as low as 3 percent down (or no money down for veterans!). Renters who are looking to buy and gain valuable equity should contact CF Funding today by calling 888-344-4080 or visiting www.cffunding.com .

About Reverse Mortgages

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