The Accunet Mortgage Show (7/14/19 Episode)
Join Brian Wickert and special guest Tim Holdmann as they dive into recent market trends, condo sales and upcoming changes to WHEDA and Fannie/Freddie income limits.
This week on the Accunet Radio Show:
Join Brian and Tim Holdmann as they explain reserve funding, give you an overview of today’s housing market in SE Wisconsin, and follow up on last week’s story of a failed experience with Rocket Mortgage.
This week’s highlights
- The Wisconsin Housing and Economic Development Authority is lowering the maximum income limit for a single household from $94,645 to $65,840 on September 5th, 2019. (Learn more about WHEDA limits here.)
- Fannie Mae and Freddie Mac are also lowering their income limits from $77,300 to $65,800 on July 20th, 2019.
- For single-family detached homes in the 5-county Milwaukee area in June, there were 484 more listings than sales, marking a much-needed inventory increase.
June home sales
Finally, single-family detached home inventory seems to be looking up. We’ve been in a hot seller’s market for the past few months, with a very slim margin between inventory and sales. As of June, there are 484 more listings than sales, marking a much-needed inventory boost.
- Single-family detached homes
- Sales are down 7% (or 147 homes) vs June 2018
- Median sale price is up 6%, sitting at $255,000
- Listings are up 3% YOY
- Sales are down 8.7% (or 38 units) YOY
- Median sales price is up 9%, sitting at $195,000
- Listings are down ~10% YOY
Condos in the 5-county area: Average days between listing and offer
Despite the size of the 5-county Milwaukee area, roughly 25% of all condo sales occur in Milwaukee proper. But how does the surrounding area compare?
Average time between listing & accepted offer by town/city
- Franklin — 11 days
- Pewaukee — 13 days
- Brookfield — 14 days
- Greenfield — 23 days
- Waukesha — 24 days
- West Bend — 49 days
- New Berlin — 52 days
**This information reflects single-family home sales from June 2019
WHEDA income limits
WHEDA loans are ideal for low- to moderate-income individuals, and acceptance into the program is based on income level. On September 5th, criteria for 30-year fixed-rate loan eligibility will change. The current income limit is $94,645, but is being reduced to $65,840, which is a roughly $45,000 difference. That’s a big deal.
Why is WHEDA lowering the income limit?
Well, the program was getting too broad in its usage, and too many people were taking advantage of it. Fannie Mae is trying to tighten the pool to keep people from using the program, and since WHEDA operates through Fannie, they have no choice but to follow suit.
WHEDA actually isn’t happy about this, since it’s crippling their ability to help people. So, heads up: Buy a home now! It’s all about the pre-approval date. The day we run your loan through the Fannie Mae underwriting system is the day your loan program takes hold. So, if we approve you between now and September 4th, you get the old income limits. If you wait until September 5th, then you won’t be eligible if you make more than $94,645 per household.
Fannie Mae & Freddie Mac income limits
WHEDA works with Fannie Mae and Freddie Mac, and the change in WHEDA limits corresponds with changes in Fannie and Freddie’s lending system.
This mainly affects the HomeReady® and Home Possible® programs, which were created to help low- to moderate-income individuals afford homes with reasonable rates. Unlike WHEDA, these loans are available in every state serviced by Accunet — namely Wisconsin, Illinois, Minnesota and Florida.
The nice thing about these loans is that, if someone has a base annual salary and commission on top of it, if the cumulative income exceeds the HomeReady® limit, you can still qualify for the loan with just your base salary.
The income limit for these programs is currently $77,300, but is dropping to $65,800 on July 20th. Remember — if you want to take advantage of the current income limits, reach out to us today!
“I currently own a home. My boyfriend owns his own, and we’ve been talking about consolidating; him selling his house, and moving into mine. Mine would need a few updates and things like that. What’s the best way to go about getting loans for renovation while having two mortgages?”
Answer: Well, since you’re not married, you don’t need to fill out a joint application. A possible option is to take out a home equity line of credit, but depending on your circumstances, there could be a better, more fiscally advantageous solution. The real key is to compare how much the remodels will cost with how much value they add, and make a decision based off that number. Accunets’ consultants can guide you through this process, and ensure you’re taking out the loan that works best for both your and your boyfriend’s finances.
Client update: Buying a property that has pending litigation
Tim recently had clients who were selling their current home and looking to downsize in light of having an empty nest. They still wanted room for the grandkids at the condo, but just didn’t need the excess space their house provided. They had an accepted offer on a condo and were scheduled to close on the condo the same day they closed on the sale of their home – also known as a “bang bang transaction.”
Being responsible buyers, they asked for condo documents to see how the homeowners association was run, because more than any other kind of sale, condo purchases buy people into a community. They saw some big red flags in how the HOA was run, so they decided not to move forward with the condo purchase.
This was just 2 and a half weeks before the scheduled closing. So, they walked away from that condo, and got another accepted offer over the weekend. When they made the new offer, they wrote the same June 17 closing date, because they didn’t want to have an inconvenient lapse in ownership.
In the end, the Accunet team pulled together, got it done, and they closed on-time![elementor-template id=”10109″]
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