The pendulum has now fully swung in the opposite direction than we were just a mere year and a half ago.   

Mortgage Insurance giants Genworth and MGIC have announced that as of March 30, 2008, they will no longer insure loans with Loan to Values (LTVs) greater than 97%.   Currently, Genworth and MGIC are the only two MI companies that insure loans with LTVs greater than 97%.  That means you need a 3% down payment to buy a home.

Will this be permanent?  Doubtful that it will last forever, but if you are planning to buy a home in the next year or two, expect this to be an issue.

Why is this happening?  Too many 100% loans defaulting, too many declining house values.  Though making it harder for buyers to purchase a home will certainly not help the housing market get better!

Yes, this is even the case for the Maryland CDA loan program, which has had a special exemption with certain MI companies.

Does this mean that you can’t get into a home with no money down?  NO!  There still are ways, it’s just getting harder and harder and harder.

1. FHA: it is not 100% financing, it is 97.75% financing, but with seller funded gifts through programs like Nehemiah, it’s possible to get into a house for $1000 or so out of pocket

2. If you make under 80% median income of the county you are purchasing in in Maryland, you can likely receive $10,000 in down payment/settlement expense help through a federal program (only certain banks can offer this, mine can!)  This money should help those over the new 3% downpayment requirements, especially in the $250k price range and below.

The new FHA loan limits are starting to filter down and be offered to borrowers….but don’t think that just because you can get an FHA loan for $500,000 that it’s going to be the same rate as lower loan amounts.  It’s going to take a little bit of time for the market at large to decide where rates should land, but it’s likely that rates are going to stay a little bit higher for these “jumbo” FHA loans.

This isn’t all bad news though, with the higher loan limits, FHA does have more flexible lending guidelines.  So, it’s going to be easier to get an FHA loan for $500k than it is to get a conventional loan at $500k.

Here are the new limits for one unit properties Maryland and Southern PA (limits are slightly higher for 2-4 unit properties):

Baltimore City, Baltimore County, Anne Arundel, Carroll, Harford, Howard Counties: $560,000
Montgomery, Prince Georges, Frederick, Charles, Calvert Counties: $729,750
York County, PA: $425,000

from The Wall Street JournalMarch 24, 2008Existing-home sales climbed for the first time in seven months during February as buyers appeared to take advantage of sharply falling prices. Home resales rose to a 5.03 million annual rate, a 2.9% increase from January’s unrevised 4.89 million annual pace, the National Association of Realtors said. Year over year, sales were down 24% from February 2007. The median home price was $195,900 in February, down 8.2% from $213,500 in February 2007. The 8.2% drop was the largest on record, the NAR said.

Wondering what your tax rebate will be for the new economic stimulus package?  Remember, you must have filed your 2007 tax returns in order to get the refund.

The IRS has set up a FAQ at this link.  There is also a calculator set up HERE (note you need your 2007 tax returns to fill it out completely).

The date you receive your refunds is based on the last two digits of your social security number and whether or not you have direct deposit set up.

If you have direct deposit set up with the IRS you will get your refund approximately:
00-20: May 2
21-75: May 9
76-99: May 16

Otherwise, you will receive your refund on approximately these dates by mail:
00-09: May 16
10-18: May 23
19-25: May 30
26-38: June 6
39-51: June 13
52-63: June 20
64-75: June 27
76-87: July 4
88-99: July 11