Jan 11, 2009 10:51 pm US/Central
New Loan Options May Help Housing Market
MINNEAPOLIS (WCCO) ―
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The federal government is buying up mortgages to push rates down and get more homes moving again.
CBS
This will be an interesting week for anyone wondering about the future of Twin Cities real estate. On Wednesday, the Minneapolis Area Association of Realtors will be releasing the latest statistics on how the market is doing.
While home prices remain down, interest rates are also dropping. Rates are now around 5 percent, the lowest in more than 30 years. Some new loan options may help the market move in the right direction.
Elizabeth Short is checking out a Minneapolis home for sale near Lake of the Isles because the prospect of a bargain is just too tempting. Lower interest rates are a big lure for her.
"It's a more powerful draw to buy because we may be able to get significant more space with the money that be could put as opposed to renovating our own home," Short said.
The federal government is buying up mortgages to push rates down and get more homes moving again.
"It is absolutely a myth that you can't get a loan. Banks, lenders, Fannie Mae, Freddie Mac. Everybody is interested in having you own a home," said Steve Havig of the Minneapolis Area Association of Realtors.
With all the sub-prime mortgages in recent years, Federal Housing Administration, or FHA, loans fell off buyers' radars, but now they are resurfacing.
Through FHA, buyers can now put just 3.5 percent down. There's also a home rehab loan, which allows a buyer to include the cost of renovation into their mortgage.
"Could it get a tad better yes, but the Feds are stepping up to the plate big time are far as holding these interest rates down, but they will run out of money eventually, " said lender Jackson Cussons.
Buyers like Short want to strike at the right time, but it's not always that easy. She still has a home to sell in this depressed market.
"It's great as a buyer, but then if that means you have to be a seller too, there's your downside. It's not all rainbows," Short said.
For more information about the FHA loan programs, click on the link below.
Let FHA Loans Help You
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