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Va. Senate approves $10 million for housing trust fund

VAR — Tue, 27 Mar 2012 12:58:43 +0000

The Senate of Virginia has approved a one-time appropriation of approximately $10 million to be deposited into the Virginia Housing Trust Fund.

If ultimately approved, the Fund will be administered by the Virginia Department of Housing and Community Development. The Senate, as a body, has suggested that the majority of the $10 million be used for “gap” financing. We have long believed that using finds for “gap” financing was one of the most productive uses of money and are very supportive of this approach.

This is far from being final.

This is only the first in a series of steps that will actively monitor. Now that the Senate has approved the movement, it goes back to the House of Delegates….eventually, the Senate and House budget conferees will determine if it will be included in the final budget. After that, the budget goes before Governor McDonnell for his approval, amendments or out-right veto.

We will continue to keep you posted on any developments.

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VHDA announces higher income limits

VAR — Tue, 02 Aug 2011 13:34:52 +0000

Great news for your first-time homebuyers-and for you!

It’s now possible for more of your first-time homebuyers to qualify for a VHDA loan, thanks to maximum income limits that have increased in all areas of Virginia-with the most significant occurring in the larger Metropolitan Statistical Areas (MSAs).

In addition to an affordable fixed rate, Virginia Housing Development Authority (VHDA) mortgages can also provide help with the down payment.

The new limits are effective with new loan reservations beginning August 3, 2011.
You can take a look at VHDA’s new income limits for each of Virginia’s geographic areas at vhda.com/LoanLimits.

HUD Announces EHLP Program to Assist Distressed Borrowers

VAR — Wed, 29 Jun 2011 18:53:06 +0000

Last week, the U.S. Department of Housing and Urban Development (HUD), in conjunction with NeighborWorks® America, launched the Emergency Homeowners’ Loan Program (EHLP) to help homeowners who are at risk of foreclosure in 27 states across the country and Puerto Rico.

Under HUD’s EHLP guidelines, eligible homeowners can qualify for an interest free loan which pays a portion of their monthly mortgage for up to two years, or up to $50,000, whichever comes first.

The EHLP loan is secured by a junior lien against the approved homeowner’s principal residence, and is forgivable over a 5-year principal reduction period, as long as the assisted borrower remains current in their monthly mortgage payments and meets other program requirements.

“It’s important to remember that applicants must meet strict criteria for this program,” said Kelly Gill-Gordon, VHDA Homeownership Education Program Manager. “These criteria include being at risk of foreclosure due to involuntary unemployment or underemployment, a reduction in income, and being three months behind on your mortgage. Local counseling agencies across Virginia will be administering this program, and qualifying applicants will be placed in a lottery for available funds. All program details can be found at the program’s website, FindEHLP.org.”

HUD’s EHLP funds will pay a portion of an approved applicant’s monthly mortgage including missed mortgage payments or past due charges including principal, interest, taxes and insurance. The HUD program is expected to aid up to 30,000 distressed borrowers nationwide, and approximately 1,200 in Virginia.

The program is now available and the deadline is July 22, 2011. Homeowners are encouraged to submit their information now to find out if they qualify for this new mortgage assistance program, and learn more about other options available to them.

Congress provided $1 billion dollars to HUD, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, to implement the program. HUD’s EHLP funding is a complement to the Hardest Hit Fund which makes available $7.6 billion to 18 states and the District of Columbia that were hardest hit by the housing crisis.

Contact information for participating agencies, the Pre-Applicant Screening Worksheet and more information on HUD’s EHLP assistance and its eligibility requirements can be found at www.FindEHLP.org or by calling toll free at 855-FIND-EHLP (346-3345).

Virginia home sales stabilize in Q1-2011

VAR — Fri, 29 Apr 2011 15:18:52 +0000

After six months of declining residential home sales, Virginia’s housing market may finally be poised for a recovery. Click here to view the First Quarter 2011 Virginia Quarterly Home Sales Report, or read on for a summary of the latest news.

As seen above, first quarter 2011 home sales (16,547) showed a marginal improvement over first quarter 2010 (16,499). The coming quarter will be a challenge to keep pace with the many closings in second quarter 2010 that were related to the federal home buyer tax credit.

This graph showing the annualized trend of residential sales with one entire year’s worth of home sales represented with each data point. The federal home buyer tax credits available in late 2009 and the first half of 2010 likely led to the overall growth in the market during that time. This annualized rate of sales is finally stable again.

The median price of homes selling in the first quarter was $210,000 which is a rather drastic decline from $249,900 in 2010 Q3, and $260,000 in 2008-Q2. Pricing trends over the past two years have been relatively tightly correlated with the federal home buyer tax credits. Hopefully this year the median price will start to level off as we work our way through REO listings and other low priced listings.

Click here (or on the image below) to download the full market report.

NAR announces Realtor Party Political Survival Initiative

VAR — Fri, 01 Apr 2011 01:59:15 +0000

As you may know by now, NAR recently rolled out plans for a proposal called “the REALTOR® Party Political Survival Initiative.” In the wake of a recent Supreme Court ruling that will allow corporations to contribute unlimited funds into the political system, the NAR initiative is intended to maintain and cement REALTORS®’ place among the most influential advocacy groups in America.

The initiative is a two-year $80 million campaign through which more than 50% of the NAR budget would be allocated to political advocacy (which members consistently rank as the #1 benefit they receive for their NAR dues); two-thirds of those funds would be returned back to state and local REALTOR® associations to support local and state candidates, issue campaigns, and other local and state political advocacy efforts. The initiative would be funded by a dues increase.

In these difficult economic times, the proposed dues increase is proving to be a controversial funding mechanism for the initiative. At the same time, our profession is clearly confronting monumental issues — from the mortgage interest deduction to Fannie-Freddie reform to mortgage lending processes and credit availability — that clearly have impact on your ability to make a living in real estate. Vigilance and well-funded political advocacy efforts are NAR’s best tools for defending your business as Congress debates these issues.

That’s why we encourage you to withhold judgment on the initiative until you read and hear about the benefits and rationale for the initiative. You can find more information HERE. In addition, NAR has scheduled an online town hall to explain the Political Survival Initiative. That town hall is scheduled for April 13, with more details soon to come from NAR.

The proposal will be considered by the NAR Board of Directors at the Midyear Legislative Meetings & Trade Expo in mid-May in Washington, DC. In the meantime, if you’d like to offer input about the initiative, you’ll find a feedback tool HERE.

Video Q&A on the REALTOR Code of Ethics

VAR — Mon, 06 Dec 2010 21:16:54 +0000

Can a buyer's agent use the terms of the purchase contract to negotiate a fee change? This question is one of the most commonly asked on VAR's Legal Hotline, and is also the subject of the first installment in a series of The Code is Good Business videos that you can use to quiz yourself (or your agents) on the finer points of the REALTOR Code of Ethics.

Check out the first video in the series for the answer to this question, complete with commentary from one of VAR's staff attorneys. It's formatted in a multiple-choice format, so it'll make a great pop quiz at your next sales meeting.

Check out the full series of videos by clicking here.

Protect the value of your home by reporting vacant homes

VAR — Fri, 19 Nov 2010 21:40:15 +0000

We all know that foreclosures are hard on homeowners, and that they can hurt a neighborhood’s property values. But you might not realize the effects they have on localities.

At the Governor’s Housing Conference in Richmond this week, Jennifer Leonard of the Center for Community Progress and Jeff Blackford from the Fairfax County Department of Code Compliance explained that yes, foreclosures put a lot of pressure on local governments too.

Here come the bullet points:

Between falling property assessments and vacant homes with no apparent owners to send tax bills to, localities are seeing steep drops in property-tax revenues.
At the same time, cities and counties are seeing their code-enforcement costs go up — there are more vacant homes to board up, and more overgrown grass in front of more vacant homes that needs to be cut, for example. (For example, according to Blackford, Fairfax County spends $250-400 to mow a quarter-acre lot.)
The lower tax income and rising costs are forcing some cities and counties to make cuts to code enforcement personnel, making neighborhoods less safe.

Speaking of less safe, Leonard and Blackford pointed out that vacant homes bring with them a long list of other problems:

Illegal activity, from vandalism to meth labs
Squatters may enter the home and – now that winter is approaching – light fires to stay warm, substantially increasing the fire danger
Unguarded swimming pools that pose a drowning risk
Electric companies cut off power to vacant homes when bills aren’t paid. No electricity for sump pumps can mean standing water in basements — think mold and other nasty things
Dilapidated roofs can lead to collapse

To make it all worse, code enforcement, policing, demolition, planning, and other concerns are often spread around and uncoordinated, making them inefficient and costly.

Some areas have tried to mitigate the problem, although sometimes with unintended consequences. In Danville, for example, the city has taken possession of homes, demolished them, and put liens on the property for expenses. But that makes the properties too expensive in the eyes of prospective buyers, who must pay off the lien before closing on the sale. Therefore, the land just sits there, unused, and the locality receives no tax revenue for the property.

Despite all this, Blackford urges homeowners and property owners associations to report vacant homes to their local code enforcement offices.

If nothing else, local officials can do small things like board up doors and secure pools — it can make a big difference in safety, reduce the cost to the locality in the long term, and increase the likelihood that the homes will be occupied again soon.

After all, isn’t that the point? A lived-in home poses far less risk to the citizens around it and produces property tax revenues that allow localities to provide services.

Count on deficit reduction plan changing shape

VAR — Mon, 15 Nov 2010 18:30:54 +0000

The Realtor profession stands ready to respond swiftly and decisively to oppose any specific proposal in Congress to reduce or eliminate the mortgage interest deduction. After all, there's a lot at risk. However, at this point in time, there is no specific proposal in Congress to curb the popular tax break.

An initial draft proposal for reducing the federal deficit that suggests cuts to the mortgage interest deduction is thin on details and will likely change many times before it’s released in any final form, according to NAR.

The New York Times Wednesday published part of a leaked draft by the co-chairs of President Obama's Deficit Reduction Commission; the commission’s report won’t be released until Dec. 1 at the earliest and will likely look very different from the leaked draft, NAR analysts say. Therefore, early reactions to the plan are pure conjecture, say NAR analysts. In a statement sent to association leaders late Wednesday, NAR said media reports that the commission has recommended reducing the mortgage interest deduction are false.

The White House itself said in a statement released Wednesday that the draft is "only a step in the process toward coming up with a set of recommendations." The White House quote was included in a Nov. 11 report in the Washington Post.

Obama created the Deficit Reduction Commission earlier this year to recommend how the federal government can balance the budget by 2015, not counting interest on the national debt. The commission consists of 18 members, six members selected by the president and 12 members selected by Congress. The co-chairs, who released their initial thoughts yesterday, are retired Wyoming senator Alan Simpson and former Clinton chief of staff Erskine Bowles.

What the actual report will look like is impossible to know at this point, because 14 of the 18 members at a minimum must agree to the recommendations before the report can be released. Presuming commission members agree or all or parts of a plan, it would still have to work its way through congressional hearings before Congress would take any action. A reform of similar scope, the Tax Reform Act of 1986, was in the works for more than two years before it was signed into law, pointed out Linda Goold, NAR Director of Tax Policy.

One congressional leader who has made clear the initial draft proposal won't fly if left unchanged is Rep. Nancy Pelosi (D-Calif.), who remains House Speaker until early 2011, when the new Congress convenes and the Republican members, now the majority party in the House, name their speaker. Among the proposals Pelosi calls "simply unacceptable" are changes to Social Security benefits.

For the real estate industry, any changes in incentives around home ownership, which have been around for generations, would raise considerable concern because of the core role of home ownership in fostering communities and social stability, and in building household wealth.

As CNN, ABC, and NPR political commentator Donna Brazille has said, "For generations, the government has provided federal incentives to help families fulfill the dream of home ownership. . . The one thing that Americans aren’t cynical about is the promise of the American Dream and of home ownership’s role in that dream. We should do all we can to preserve and protect home ownership and the American Dream for today’s home owners as well as future generations."

Source: NAR

Reports on cuts to MID are premature

VAR — Thu, 11 Nov 2010 20:20:14 +0000

This is how rumors are started. Yesterday several major media outlets (WaPo, NYT) ran stories about a sneak peek of a draft report from the Deficit Reduction Commission (DRC), a bipartisan commission charged with recommending steps to reduce the federal debt. The draft report contains a recommendation that the popular Mortgage Interest Deduction (MID) tax break be reduced or repealed in order to bring the government's expenses in line with its revenues.

Here are the facts: The DRC hasn't released its report. Yesterday's stories were about a sneak peek at a draft. In order to report out its recommendations, 14 of the 18 members must agree to them. As it stands, it's expected that this current draft will not garner enough votes from the DRC members to pass and Ezra Klein of the Washington Post posits that the DRC may never agree to anything.

All of this aside, Congress must ultimately act on any recommendation the DRC may bring forward, and the DRC itself has very little power to force Congress to do anything with their plan.

Now you know.

Supreme Court of Virginia upholds NVTA property tax classifications

VAR — Thu, 11 Nov 2010 17:38:52 +0000

The Northern Virginia Transportation Authority (NVTA) has levied a special tax on certain property owners to finance needed and costly transportation improvements in Northern Virginia, like Metro to Dulles. Here's the rub: NVTA's special tax applies only to commercial property owners, and not residential property owners.

This tax irks some commercial property owners in Northern Virginia because, in their view, all those who travel through Northern Virginia benefit from the transportation improvements, but only commercial property owners pay the bills for them. Some of the commercial property owners were so upset over the tax that they sued to have it nullified on the grounds that it violated the "benefit-burden" precedent (i.e. those who benefit from a project should share in the burden of paying for it) set by the Supreme Court of Virginia in a landmark case in 1941.

The case went all the way to the Supreme Court of Virginia which, on November 4, ultimately ruled against the commercial property owners. The special tax will stand, and this ruling gives the General Assembly a clear signal that it may authorize regional authorities to exempt certain classes of property owners from the taxes they levy.

VAR is concerned by the decision because we oppose efforts to establish a separate tax classification for various classes of real property including different classifications for residential and commercial real property. VAR, however, does support legislation to provide voluntary authority to local governments to exempt a percentage of assessed value of residential housing provided any such exemption is targeted to those homeowners whose owner-occupied residential housing is affordable as defined by the locality, or the homeowner’s income falls within that of the population being served by the affordable housing programs of the locality.