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The Home Valuation Code of Conduct (the Code) is the result of a joint agreement between Freddie Mac, the Federal Housing Finance Agency (FHFA), and the New York State Attorney General to enhance the independence and accuracy of the appraisal process, and provide added protections for homebuyers, mortgage investors and the housing market. 

The new rules, known as the Home Evaluation Code of Conduct or HVCC became effective May 1, 2009. The rules were intended to reduce appraisal fraud and help ensure that appraisers aren't subjected to improper pressure to inflate the home's value. Accurate and credible appraisals are certainly a laudable goal, yet the new rules also have resulted in some unintended consequences. Here's what we need to know:

Slow and Low Appraisals: Appraisals now may take up to a week longer to be ordered and completed. Consequently if a home purchase contract includes an appraisal contingency, it may need more time for the buyer to approve the appraisal and check off that contingency. Buyers should expect to pay as much as $100 more for an appraisal than may have been customary before the new rules became effective.

Reduced Home Valuations: Another consequence has been that appraisers have become more conservative in their home valuations. In some cases, the appraiser may even believe the home is worth less than the agreed-upon sales price. If that happens, then the buyer need to understand that the appraised value of a property isn't necessarily the same as the market value since the appraisal is done for the purposes of the buyer's loan, not the home sale. The buyer should also be aware that if the appraised value is lower than the sales price, the buyer may choose to exit the transaction through the appraisal contingency or the buyer and seller may want to renegotiate the sales price. A so-called "low appraisal" technically can be appealed; however, such appeals rarely result in a higher valuation.

Check the details on Home Valuation Code of Conduct HomeValuationCodeofConduct.pdf

The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence to April 30^th, 2010. The new legislation also increases the income limit for couples with income up to $225,000 and individuals up to $125,000.

The act has also authorized a federal tax credit of up to $6,500 for qualified repeat home buyers. An eligible repeat home buyer must have owned and lived in their previous home for five consecutive years out of the last eight years. Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit. It is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.

For first time and repeat home buyers, the tax credit applies only to primary residence homes priced at $800,000 or less. It is also available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.

For more information, take a look at a side by side comparison chart of the new and old tax credit.
Government Affairs Tax Credit Ext Chart.pdf

Please Call Kal Johal at 530-713-5711 should you like to take the advantage of this extended opportunity! 

1. Ensure that your credit information is accurate

2. Check your report for negative items that could be hurtiing your credit

3. Find the best time to apply for a loan to get the best rates

Remember Higher Credit Score Means Better Interest Rate

When purchasing a house with a FHA mortgage the buyer is responsible for the following:

1) Down payment (usually no more than 3 percent)

2) Appraisal Fee

3) Escrow Fee

4) Mortgage OriginationF fee (typically 1 percent of base mortgage amount)

5) Recording Fees

6) Credit Report Charges

7) Title Insurance Policy Fees

8) MMI (Monthly Mortgage Insurance) Impounds

9) Hazard Insurance and Reserves

10) MIP (Mortgage Insurance, which can be financed), and

11) Property Taxes