Have You Considered Buying Your Home With an FHA Home Loan? Find New Options This Year

The Federal Housing Administration (FHA) loan limits are increasing throughout the U.S. in 2020, up to $765,600 for single-family home loans in “high cost” counties. This increase amounts to almost $40,000 more than 2019’s high cost FHA loan limit. This is part of an ongoing trend where the FHA is recognizing the need for loan limit increases. In 2016, the FHA increased loan limits in fewer than 200 counties. By 2019, over 3,000 counties saw an increase in their loan limits. 

What is some other good news in FHA loans in 2020?

Increased FHA loan limits could encourage additional lenders to enter the FHA home mortgage market in 2020, which offers increased opportunity for home buyers who are interested in using an FHA mortgage to buy a home. 

One way this might benefit home buyers is availability of more FHA home loan products. Some real estate insiders are predicting that there will be more FHA loans becoming available for two- to four-unit properties. You can buy a multi-unit property (up to four units) with an FHA loan and live in one unit while renting out the others. The other units can’t be used as short-term rentals (like AirBnB), but they can be rented for 30-day or greater periods of tenancy.

Mortgage rates are expected to be in the 3.7% range throughout at least the first six months of 2020, according to Freddie Mac and other mortgage loan predictors. However, you shouldn’t “count on” any predictions. They’re exactly that, predictions. The Federal Reserve Board is scheduled to meet in January 2020 and they’ve already announced its unlikely they’ll make any changes to the federal funds rate. The federal funds rate is the amount that banks charge each other for overnight loans and it can affect all other types of loans and credit, including FHA loans.

However, this is just one month. Interest rates for FHA home loans, along with other mortgages including VA 30-year mortgages and 15-year loans, have been less than 4% since January 2019. You can take advantage of low interest rates right now and start 2020 with plans to buy a new home. 







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Considering Buying Your First Home in Los Angeles County This Year? Get To Know These Latest Programs

Most people who’ve never bought a home before know they’ll be first-time homebuyers when they start their home search. But we wonder if people are aware that if you haven’t owned and occupied your own home for the past three years — even if you owned a home before — programs like the Los Angeles County Development Authority (LACDA) First-Time Homebuyer Program can help.

How Does the LACDA help first-time homebuyers?

The LACDA provides several programs to help people buy their first home. Some of the organization’s programs are limited. For example, the Home Ownership Program (HOP) only provides 10 applications for loans from HOP-qualified lenders. You have to meet income requirements for this program. For example, a family of four can’t have more than $83,500 in income to qualify.

LACDA also offers a mortgage income tax credit to help home buyers increase the amount of money they can use to pay their mortgage. The income tax credit directly reduces the amount of income tax a qualified family pays up to 20% of the interest you pay on your mortgage. For a 30-year fixed-rate mortgage, a 20% tax credit could add up to a lot of money during the first five years of your loan and potentially longer.

The LACDA’s First Home Mortgage Program is available in Los Angeles and Orange Counties. The program combines competitive 30-year home mortgages offered through participating qualified lenders. The mortgages can be USDA, VA, FHA and Conventional home loans. The First Home Mortgage Program also offers up to 4% of the total loan amount as a non-repayable grant that homebuyers can use for down payments and closing costs.

Are there any limitations on the LACDA home buyer programs?

The programs are limited to people with moderate (not low) incomes. For example, a couple can’t earn more than $125,280 a year to participate in the First Home Mortgage Program in Los Angeles County, or $142,440 a year for the Orange County program. 

Los Angeles and Orange County both care about increasing home ownership. Probably the biggest takeaway you can have from these county-based mortgage programs is that organizations which are dedicated to hellping first-time homebuyers will consider you a “first time” homebuyer if you haven’t owned a home in three years or more. You do have a lot of options and you can learn more by working with an experienced real estate and home mortgage professional.


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Need Room For the Youngest and Oldest? Add An Additional or Accessory Dwelling Unit With A Home Renovation Loan To Fit Your Youth and Senior Needs

Have you heard about ADUs? You may know them by another name, like “extra room” or “granny flat.” ADU stands for “accessory dwelling unit.” When you add another room to your primary residence, or add a separate structure on your property, each of these home additions qualifies as an ADU. 

Can an ADU boost your home’s value?

In many cases, yes, adding an accessory dwelling unit could increase your property’s value. Not every home improvement project increases your home’s resale value. For example, studies by the National Association of Realtors (NAR) indicate that projects like luxury bathrooms or specialized kitchens don’t add much, if anything, to a home’s value when it comes time to sell. For example, glamorous bathroom amenities like whirlpools and walk-in waterfall showers, only return about half of what they cost when your home is sold.

If you add an ADU, either as part of your primary residence or elsewhere on your property, it could add significant resale value to your home. One study from Oregon showed that homes with ADUs gained up to 51% on average in resale value. 

What are uses for ADUs on your property?

With changing families these days, sometimes ADUs are more than just “granny flats.” You may have younger family members who will continue to live at home while they attend school and work. You may have older extended family members who you want to continue to share your home. 

Other uses for ADUs include rental properties, or as a location for live-in caregivers for elderly or disabled family members.

How can you pay for an ADU?

You can get a home equity loan (HEL) or a home equity line of credit (HELOC) to pay to add a room or structure to your property to accommodate additional family members. Other options to pay for the ADU include a cash out refinance of your existing home loan. You may even be able to add an ADU that you could rent for additional income — but don’t count on future rental income from a unit that isn’t completed to qualify for financing. Work with an experienced independent mortgage broker and home loan professional at California Platinum Loans, who can guide you through the process of financing your ADU and making a real change to your property to benefit younger or older family members.





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