The basic FHA requirements to be eligible for an FHA home loan are simple; applicants must be lawful residents of the USA and be of legal age to sign a mortgage. (That age may vary by state–check with your loan officer when in doubt.) The borrower must also be willing to certify they intend to live in the home purchased with an FHA mortgage.

Up front mortgage insurance is required with FHA loans, and qualified borrowers are eligible for approximately 96.5% financing. The borrower is able to finance the upfront mortgage insurance premium into the mortgage.

Some people mistakenly believe they earn too much money to qualify for an FHA mortgage. This is not true, but the reverse does apply. FHA requirements state the applicant must have enough income to qualify for both the mortgage payment itself plus other debts including typical home owner expenses like utilities and other payments.

Income limits do come into play when the borrower wants to apply for down payment assistance or other programs designed to help FHA loan applicants afford a new home.

Among the other basic requirements for an FHA home loan, applicants must submit to a credit report. Your credit score, payment history and job history may all be contributing factors in the FHA loan application; FHA borrowers should prepare for at least a year before starting a house hunt in order to get their financial affairs in order and be ready to have their credit scrutinized.

One question many newcomers to the FHA loan process ask: Is it possible to purchase a fixer-upper with an FHA home loan? This basic question makes all the difference for some applicants–those willing to put in time and effort to remodel or repair a property could find major savings on their initial home purchase. The FHA does allow borrowers to locate a fixer-upper; under what is known as HUD’s 203(k) program, a qualified borrower can not only purchase such a home but also include the cost of repairs or improvements into the loan.

Metro Birmingham homebuilders could be poised for a comeback in 2011, after a steep market downturn left most of the industry battered.

During a two-week period in January, more than 50 building permits were issued for speculative single-family homes in area neighborhoods, according to data collected by Southern Exposure, a Huntsville firm that tracks permit activity. That’s up from roughly 10 a week in recent months.

The sharp uptick might be the result of seasonal factors, said Bart Fletcher, executive officer of the Greater Birmingham Association of Home Builders.

If builders want to have houses ready for the typically busy spring buying season, now is the time they start working on them, he said.

But, Fletcher added, “I think builders are more optimistic about 2011. I think that we really believe we have seen the bottom. A lot of builders have not built anything new for quite some time. We’ve worked through the inventory.”

The original article in its entirety from Dawn Kent at the Birmingham News can be found at the AL.com blog.

This is promising news for the future of new home sales in Birmingham over the coming months. To read the original article posted on Bizjournals.com/Birmingham, please follow the link.

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Confidence Grows Among Alabama Real Estate Execs

Confidence is up among the state’s real estate professionals, particularly in the central Alabama area, according the Alabama Center for Real Estate.

The University of Alabama center released Friday its Alabama Real Estate Confidence Index for the first quarter of 2011, with all indicators showing improvement.

ACRE said the overall index score was 47, which was up from 43 the previous quarter but below the mid-level mark of 50, indicating no change expected. The score includes both residential and commercial real estate expectations.

The North Central region, which includes Tuscaloosa, Birmingham and Anniston, had the most significant increase on the index of the four regions of the state, jumping 10 points to 56. However, inventory, pricing and credit were still below the 50 mark.

ACRE said the state’s commercial market participants were more optimistic in their scoring for the first quarter. That index rose 9 points to 59 overall and to 55 for sales expectations. But pricing remained weak at 40.

ACRE’s confidence index is compiled from a survey of nearly 600 statewide real estate professionals.

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While metro Birmingham’s total home sales dropped last month, there is a bright spot in new home sales, according to a local real estate analyst’s latest report.

Tom Brander said today that the area’s home sales totaled 898 in September, a 5 percent decline from August and a 26 percent fall from September 2009.

But new home sales, included in that total, were 148 last month, a 10 percent increase from August. This marks the second month in a row of improvement in new home sales, Brander said.

Average sold prices also are returning to normal, after last spring’s federal tax credits for home buyers contributed to a dip.

Back then, sales were up, fueled by the incentives. But prices fell as many first-time home buyers entered the market, and a substantial number of less expensive homes were sold.

Now, the number of mid- to upper-end homes sold is rising slightly, compared to the lower-end, contributing to the latest price trend.

“The twelve month moving average price line for both new and used homes is heading up!” Brander wrote in his blog. “This reflects a normalizing mix of home prices, with the elimination of the distortion due to sales of the lower-end being inflated by the tax incentives.”

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Original article in its entirety can be found here on AL.com.

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Birmingham Area Home Sales Post Uptick in June

Birmingham area home sales rose in June, as closings tied to the now-expired federal tax credits for home buyers con­tinued to boost the local market.

Home sales totaled 1,135, edging up 1 percent from May and 4 per­cent from June 2009, the Birming­ham Association of Realtors said Wednesday.

But while the tax credit fueled early June closings, the month ended on a slower note, said Jim Dye of RealtySouth, immediate past president of the Realtors group.

Lately, prices have softened and mortgage applications have fallen, he noted.

“I’m getting the feeling that the tax credit exhibited some of the things that Cash for Clunkers did,” he said, referring to last year’s fed­eral car buying incentives. “We didn’t accomplish more sales, we sped them up.”

Highlights of the month:

Sales rose, prices fell. The average price for a house sold in metro Birmingham last month was $184,427, a 2.6 percent decline from June 2009. The median price slid 3 percent to $155,000.

The area’s eastern neighborhoods posted the best performance in June, with a 3 percent uptick in sales and rises in both the average and median prices. Other sectors also saw their sales rise, but they registered declines in one or both prices.

Foreclosures continued to put downward pressure on local prices. Sales of foreclosed homes comprised 31 percent of June’s sales total, about the same portion that’s been seen throughout the spring.

So far this year, area home sales total 5,503, an 8 percent improvement from the same period last year. The mid-year average price is $165,185, a 3 percent drop from the first half of 2009, while the median price is flat at $141,800.

Birmingham-area Housing Prices Rising (Dawn Kent, The Birmingham News: Read original article here)

Metro Birmingham ranks among the nation’s highest-performing major markets in the latest home price data compiled by a California-based real estate researcher, but the area’s poor performance in past reports indicates continuing volatility.

For the four months ended in June, Birmingham area prices rose 18.2 percent compared with the previous three months, according to Clear Capital.

That’s the fourth-best quarterly price boost in the nation, following Memphis, Cleveland and Milwaukee, all of which posted gains of about 20 percent, the firm noted.

In May, however, Birmingham’s quarterly prices dipped 5 percent, earning it a spot on the nation’s worst-performing major market list at No. 7.

The see-sawing statistics, which were seen in other markets as well, are a sign of instability, said Alex Villacorta, senior statistician for Clear Capital.

“To see double-digit swings in the span of seven months really speaks to the fragility of these markets,” he said.

But the latest pricing data is reason for cautious optimism in Birmingham-area real estate circles, he said.

“The most recent trend is good news — the prices are going in the right direction,” he said. “The fact that they’ve been so up and down, that’s the disheartening part.”

In its quarterly price calculations, Clear Capital uses a rolling-quarter methodology, which compares the most recently ended four months to the previous three months. The process reduces multi-month lag time in reporting data.

The latest data, from the four months ended in June, was lifted by federal tax credits for homebuyers, which magnified typical spring gains. That trend was seen in markets across the nation, as national quarterly prices rose 5.2 percent over the previous three months, which were in the usually slow winter season.

Clear Capital also measures year-over-year prices, and Birmingham’s numbers for June were flat compared to June 2009. Nationally, yearly prices rose 8.8 percent.

The second-quarter median price for metro Birmingham was $136,000, Villacorta said.

Other Clear Capital data shows that sales of foreclosed properties continue to drag down the local market. For the four months ended in May, such properties comprised 32 percent of total sales. That number shrunk to 25 percent for the four months ended in June.

I-422 to infuse billions in Birmingham area

The Northern Beltline will likely generate an economic impact of more than $7.1 billion during construction and $2 billion annually after it’s built, according to a report being unveiled this morning.

The study commissioned by the Coalition for Regional Transportation said that the nearly 53-mile interstate linking Interstate 20/59 in southwest Jefferson County to I-59 in northeast Jefferson County will create jobs, generate tax revenue and improve traffic safety.

The study, completed by Sam Addy of the University of Alabama Center for Business and Economic Research, shows that the Birmingham area should reap the vast majority of the benefits of the beltline’s expected economic impact.

Current plans call for the $3 billion construction of the beltline to be completed in 21 years. About 70,000 jobs would be created statewide during the construction phase. Of those construction jobs, approximately 33,525 would be in the Birmingham area, according to the executive summary of the study obtained by The Birmingham News.

A BBA spokesman declined to comment on the report prior to this morning’s presentation of the study.

After construction is complete, the beltline is expected to bring another 20,000 jobs each year statewide. Nearly 12,000 of those will be in Jefferson County alone.

Construction of the beltline is also expected to be a shot in the arm for residential and business growth over the next 30 years in the six-mile wide corridor adjacent to the beltline.

By 2040, the population of the beltline corridor is expected to increase 22.3 percent. The beltline is expected to bring 3.4 percent of that increase, or about 6,500 more people than would join the population without the beltline.

The beltline is expected to bring an additional 372 new businesses to the area, for an additional 4 percent commercial growth.

The study also examined the socioeconomic and environmental effects of the Northern Beltline, which will eventually be named Interstate 422.

“The highway will not unfairly or disproportionately affect minority and low-income populations,” the report states. “Instead it presents development opportunities that can benefit these groups.”

The beltline should improve access to jobs for low income residents. Future developments in the area of the beltline should include mixed income housing to prevent the displacement of lower income residents, the study suggested.

The interstate should also improve traffic safety, travel times and the overall air quality of the area near the beltline.

The findings presented in the study are conservative, the executive summary states, because it factors in income, sales and property taxes, but not occupational taxes and taxes on things such as alcoholic beverages, tobacco products and hotel and motel rooms.

Read the original article here.

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Pending Home Sales Surge Continuing (U.S.)

Pending home sales have risen for three consecutive months, reflecting the broad impact of the home buyer tax credit and favorable housing affordability conditions, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator, rose 6.0 percent to 110.9 based on contracts signed in April, from an upwardly revised 104.6 in March, and is 22.4 percent higher than April 2009 when it was 90.6. That follows gains of 7.1 percent in March and 8.3 percent in February.

Pending home sales are at the highest level since last October when the index reached 112.4 and first-time buyers were rushing to beat the initial deadline for the tax credit. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said this second round of surging sales from the tax credit extension looks as strong as the original tax credit. “There were concerns that only a small pool of buyers were left to take advantage of the tax credit extension. But evidently the tax stimulus, combined with improved consumer confidence and low mortgage interest rates, are contributing to surging sales,” he said. “The housing market has to get back on its own feet and now appears to be in a good position to return to sustainable levels even without government stimulus, provided the economy continues to add jobs.” NAR expects a net of 1 million additional jobs in the second half of this year and about 2 million in 2011.

“The home buyer tax credit brought close to 1 million additional buyers into the market, which is now helping the trade-up market and has significantly improved the inventory situation. This stabilized home prices more quickly and has preserved about $900 billion in home equity; in turn, that is keeping additional households from going underwater and risking foreclosure,” Yun said.

The PHSI in the Northeast jumped 29.5 percent to 97.9 in April and is 24.5 percent above a year ago. In the Midwest the index rose 4.1 percent to 104.2 and is 17.9 percent above April 2009. Pending home sales in the South slipped 0.6 percent to an index of 123.9, but is 31.3 percent higher than a year ago. In the West the index rose 7.5 percent to 107.9 and is 12.0 percent higher than April 2009.

“A big concern surfacing recently is insufficient time to close the deal at the settlement table. Under normal circumstances, two months would be enough time from contract signing to settlement date,” Yun said. “However, the recent housing cycle has brought long delays related to the short sales approval process by banks, and from ongoing appraisal issues. There could be a sizable number of homebuyers who responded to tax credit incentives, but may encounter problems meeting the settlement deadline by June 30.” Because of these market challenges, NAR has asked Congress to provide flexibility on the deadline for closing.

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.
Click here to read the original article on RealityTimes.com