Comments on: It’s official - the low end is hot! http://www.villagesite.com/blog/2008/03/26/its-official-the-low-end-is-hot/ Santa Barbara, Montecito and Santa Ynez Real Estate Wed, 20 Aug 2008 11:46:13 +0000 http://wordpress.org/?v=2.3.2 By: Ken Doss http://www.villagesite.com/blog/2008/03/26/its-official-the-low-end-is-hot/#comment-326 Ken Doss Wed, 28 May 2008 16:40:22 +0000 http://www.villagesite.com/blog/2008/03/26/its-official-the-low-end-is-hot/#comment-326 I agree with your assessment of the low end! Unfortunately, there is a misconception about the cash needed (down payment) for this segment of our market. Most agents believe buyers need a minimum of 10 to 15% cash. This of course is a result of the recent reports that we are all seeing in the media. Here’s the good news… FHA has a program where they will fund a 97% new 1st mortgage and the Buyer can utilize a 3% grant from a non-profit corporation!! This is truly good news for our real estate market but its somewhat of an unknown fact. Some agents have replied to this idea: “Hey Ken, it’s this type of financing which got us into our current mess”. This isn’t actually true. This 97% 1st with the 3% grant has been around for a long time. Also, this package requires full income/asset documentation. Our current “mortgage mess” was a result of an 80/20-loan package with stated income/stated asset loan processing. Therefore, the current FHA 97% loan program with it’s full income documentation is very much different than the stated income loans which were prevalent just as recent as last summer. Ken Doss - Chase Bank I agree with your assessment of the low end! Unfortunately, there is a misconception about the cash needed (down payment) for this segment of our market. Most agents believe buyers need a minimum of 10 to 15% cash. This of course is a result of the recent reports that we are all seeing in the media.

Here’s the good news… FHA has a program where they will fund a 97% new 1st mortgage and the Buyer can utilize a 3% grant from a non-profit corporation!! This is truly good news for our real estate market but its somewhat of an unknown fact.

Some agents have replied to this idea: “Hey Ken, it’s this type of financing which got us into our current mess”. This isn’t actually true. This 97% 1st with the 3% grant has been around for a long time. Also, this package requires full income/asset documentation. Our current “mortgage mess” was a result of an 80/20-loan package with stated income/stated asset loan processing. Therefore, the current FHA 97% loan program with it’s full income documentation is very much different than the stated income loans which were prevalent just as recent as last summer.

Ken Doss - Chase Bank

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