Virginia Beach Real Estate News For Buyers And Sellers

1.   Pay off the second mortgage with the federal First-time Homebuyer

Tax Credit. Doing so will build instant equity in the home!

2.   Pay off the second mortgage over 29 years — and save the Tax Credit to pay for future emergencies, make home improvements or pay off/pay down existing debt.

3.   Make principal payments on the second mortgage before the repayment period begins; this will reduce the required monthly payments for the remaining 29 years on the second mortgage.

Program Features:

•     Affordable fixed-rate financing on both mortgages.

•     Repayment of the second mortgage begins one year after the first mortgage payment.

•     Interest rate of second mortgage: zero interest for the first year – beginning

the 13th month, the same interest rate as the first mortgage.

•     Maximum loan amount:    First mortgage – maximum FHA mortgage

Second mortgage – up to 5% of sales price (no cash back)

•     Loan must close no later than November 30, 2009.

Notice: VHDA does not guarantee borrowers eligibility for the federal First-time Homebuyer Tax Credit. Borrowers can file an amended tax return after closing, and should consult a tax advisor or the IRS for complete eligibility criteria. Information is available  at www.irs.gov. If borrowers are not eligible for the First-Time Homebuyer Tax Credit, or the tax refund (if any) is not enough to repay the Homebuyer Tax Credit Plus loan, borrowers are still obligated to repay the second mortgage, plus all applicable interest.

Homebuyer Tax Credit plus

Yime Limit:           Loan must close no later than November 30, 2009.

Eligibility Requirements:  Borrowers must meet federal First-time Homebuyer Tax Credit requirements as well as VHDA’s requirements regarding first-time homebuyer status, income limits, sales price limits, etc.

Maximum Sales Price/ Total Loan Amount:

The combination of the first and second mortgage may not exceed VHDA’s sales price/income limits.

Minimum Credit Score:           Minimum 620 (lower middle score of all borrowers).

Qualifying Ratios:

FHA Ratios of 31% payment  to income/ 43% debt to income apply. (Ratios up to 38% payment  to income and 50% debt income may be considered  with compensating factors.)

Required Borrowers Funds:

Borrowers must have a minimum of 1% of the sales price verified as their own funds to be contributed toward the transaction  or have available as reserves.

Pricing Options:

Pricing Options are available. Rate on the first and second mortgage will be the same. No points or origination fee charged on the second mortgage.

First-time Homebuyer Class:

VHDA’s free Homeownership Education class must be completed prior to loan approval.

Notice: VHDA does not guarantee your eligibility for the federal First-time Homebuyer Tax Credit. You can file an amended tax return after closing, and you should consult your tax advisor or the IRS for complete eligibility criteria. Information is available at www.irs.gov. If you are not eligible for the First-time Homebuyer Tax Credit, or your tax refund (if any) is not enough to repay your Homebuyer Tax Credit Plus loan, you are still obligated to repay the second mortgage, plus all applicable interest.

When you borrow for down payment and closing costs, the additional debt could restrict your ability to sell or refinance your home for several years. You should consider your long-term housing needs before buying a home with Homebuyer Tax Credit Plus financing. Although the second mortgage may be re-amortized if payments are made toward the principal during the first 12 months, amortization for the first mortgage will not change. Should you choose to refinance your Homebuyer Tax Credit Plus loan at a later date, you must pay off both the first and second mortgages.