There have just been some new FHA guidelines passed that might help certain buyers even more. Site condos used to have to get FHA spot approvals; and, the new word is that FHA will finally treat them as the single family homes that they have always been. As far as condos are concerned, the whole complex must now be FHA approved. You will no longer be able to get just a spot approval on a condominium that is in a complex that is not FHA approved. However, your lender can try and get the whole complex approved; and, if successful, will be able to give you an FHA loan on your unit.

FHA has increased it’s previous 3% down payment to 3.5%. A seller can contribute up to 6% of the purchase price and might also be able to waive tax pro-rations to give the buyer an even better advantage.

The tax credit for buyers that the government is granting if they purchase by December 1, 2009 might also be used with an FHA loan to help pay closing costs, buy down the rate or add to the 3.5% down payment. This is more than likely going to be up to the individual lenders as to which ones are going to work with this credit for the buyer. I am sure that this could be confusing for some buyers as to just how much credit they will be getting. The lenders will want to make sure that they are doing their calculations correctly for the borrowers or they could end up supporting some of the tax credit themselves.

If any/all of this sounds confusing to you and you would like further explanation, please give me a call and it will be my pleasure to try and answer whatever questions that you might have that will help you better understand the inner workings of these FHA loans.

Comments from Fed Chief Bernanke and generally stronger than expected economic data fueled upward revisions to the consensus economic forecast this week. In Tuesday’s testimony to Congress, Bernanke offered his most optimistic economic outlook since the recession began. He expects economic activity to “bottom out, then to turn up later this year”. He warned that the labor market may recover very slowly, but he expects that the Unemployment Rate will peak below 10%. He pointed to the decline in mortgage rates as a successful outcome of Fed programs and suggested that there have been signs that the housing market may be near a bottom. Housing sector data released during the week supported his view. Pending Home Sales, a leading indicator for the housing market, rose 3%, and Construction Spending posted gains as well.

In a typical economic recovery, the labor market is one of the last areas to turn around, and the pattern is expected to hold this year. The April Employment report showed that the economy lost -539K jobs, which was a large number but fewer than expected. The Unemployment Rate rose to 8.9% from 8.5% in March. The consensus outlook is that a pickup in the job market will lag an improvement in the overall economy by several months.

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales on Wednesday and Industrial Production on Friday will provide important indications of economic activity. Retail Sales account for about 70% of economic activity. The Trade Balance, the Empire State index, and Consumer Sentiment will round out a busy week

There are some income restrictions.  If you make $75,000 or more per year as a single person or $150,000 or more per couple, the incentive will be paired down according to your income.

This new tax incentive is also up to 10% of the home purchase price but limited to no more than $8000.  There are many homes on the Farmington Hills market today with such great listing prices, that this makes for a win win situation for the first time home-buyers who are out there today.  They no longer have to sit on the fence and wait to see what the prices are going to do.  They have a built in buffer to help them make a decision now.  Their Farmington Hills home will have to be purchased and closed between January 1st and December 1st of this year.

Of course, it is always best to check with your Farmington Hills tax consultant as changes are being made all the time and your specific situation should be reviewed by someone who has the knowledge to do so. If you are considering purchasing in Farming ton Hills then go for it now; and, not only get a fantastic price on your new home but perhaps a bonus to boot!