Despite the negative news surrounding real estate in the last year, Murfreesboro still has a strong, though changed, market. Market correction in the wake of the subprime mortgage fall out is a continued process in our Middle Tennessee real estate market. Though our market has fared very well, and we are all very lucky to be owners, sellers, buyers and real estate professionals in the Murfreesboro area, we still have a role to play in the correction process. The days of putting people in houses that they shouldn’t have been in in the first place is over, and now everyone from buyers to lenders to sellers to policy makers are subject to playing a role in the market correction.
The governmental role in this process has dramatically changed the face of real estate financing. The Housing and Economic Recovery Act of 2008 has changed the face of FHA financing in a largely FHA market. This act singlehandedly squashed the few 100 percent loans still available to buyers that involved seller-funded down payment assistance. As of Oct. 1, these programs will no longer exist, and buyers will be responsible for their own down payments. The only ways for a buyer to have their down payment gifted to them is through a church or by a family member. Conventional home buyer programs had by and large already done away with 100 percent loans, and now the few surviving loans have bitten the dust as well. And, to top it all off, FHA loans will require not a 3 percent down payment, as in the past, but a 3.5 percent down payment.
Recent changes in FHA financing will limit the number of buyers who can qualify for financing; however, in Middle Tennessee many homes are in an area where financing homes is not a problem?even with 100 percent financing. The saving grace for our real estate market in Rutherford County may prove to be the Guaranteed Rural Development Housing Loan Program. This loan is easy to process, has lenient income limits, no maximum loan amount limit, requires no borrower’s reserves, and yes, can still be a source of 100 percent financing. It also has no limit on seller participation, gift contributions or grants. For a buyer in need of seller participation, this loan is going to be the answer. For a seller of a home in the county, this could be a phenomenal program to involve in the marketing of the home, which will in turn make it more likely to sell. The program is only available to finance rural homes or homes out in the county. However, many homes in rural Rutherford County are remarkably close to urban conveniences and developments and can be more affordable and will be in supply as the rural real estate market continues to grow! Eligibility for this program is structured but lenient, and does not require a buyer to be a first-time home buyer, as with THDA loans. For more information, please feel free to call.
Jackie Hogencamp is a local Realtor and can be reached at jhogencamp@realtracs.com or (615) 895-4040.
