If you’re a first time homebuyer, the THDA has a wealth of information regarding homebuyer grants and tax credits that may be of use to you. Also, if you are in an uncertain financial situation, the THDA can assist those in need find homes they can (continue to) afford. The THDA has the most up to date information on the current housing market in Tennessee, as well as new housing legislation and tax credits. If you need information on how to avoid foreclosure, and how to choose a lender, the THDA website has this and much more. Counseling and community programs are also available for those in Tennessee who want to learn more. It’s nice to know you’re not alone. The Tennessee Housing Development Association has continued to work for the state of Tennessee to keep us educated and informed about our personal housing situations. To find out more visit www.THDA.org.

First of all, THDA was designed and still works to get buyers who may not otherwise be able to get into a home, into a home. There was never a reason to think of unwinding the bond that governs the THDA loan process due to what has gone on in the economy. So you are clear, there is a bond attached to the THDA loans that enable THDA to do what they do. It is my understanding that once a mortgage is secured, or wrapped, with the bond, it is fixed and cannot be changed.

While there are some people who have THDA loans that will have a hard time most will do very well since they have had some help through THDA. If you find yourself in trouble, the best thing to do is immediately call THDA and talk to them. No one wants you to loose your home and they will do everything they can to help. It really is up to you.

One of the struggles right now is having money for a down payment.  In the good old days (6 months ago) there were loans that allowed the seller to contribute to the buyer’s down payment; they are gone.  There were also several non-profit businesses that helped people with grants to get enough money for a down payment and though these companies are still around, they are currently out of funds.  So what’s a buyer to do?

There is still THDA and they do have grant programs available where you can get up to 7% for closing costs and down payment assistance at a rate of 6.8%.  You may balk at the rate but they are helping you get into a house with little or no money down.  You can see all of the THDA programs to see if they might work for you at this time.

There is always the parental or other relative gift that you can get to help you with a down payment.  You may not think that could ever happen, however, there is no telling what your parent s might do to get you to leave the house!  I have also heard talk, though nothing that is remotely official, that the seller paid closing costs and pre-paid expenses are coming back.  Personally, I wouldn’t count on anything until something official comes down.  Until then, it’s all just wishful thinking.

Last July, Congress passed the Housing and Economic Recovery Act’s Neighborhood Stabilization Program allocated $72.5 million dollars to Tennessee.  THDA (Tennessee Housing Development Agency) is administering $49.3 million of that money to rehab and sell abandoned and foreclosed homes in order to rebuild these hard hit neighborhoods.

Though there are several areas that are receiving funds through THDA ($11.5 million for Memphis, $2.7 million for Shelby County, $2.73 million for Knoxville and $2.1 million for Chattanooga) Nashville/Davidson County is receiving $4 million.  Since the bill that was passed requires 25 percent of the state’s allocation be used for households at or below 50 percent of area median income, it is a natural fit for THDA.  They will be targeting areas with the highest percentages of homes financed with sub-prime mortgages and high foreclosure rates, which they deem the areas with the greatest need.

Great Rate Program      6.10%

Great Save Program     6.10

Great Advantage          6.60

Great Start Program     7.10

These and many other programs are available to you if you are currently in the market to purchase a home.

I have already been called this morning and asked if interest rates are going to fall again.  My answer, I have no idea.  Interest rates are not following normal historical indicators so no one that I know feels confident in predicting what might happen.  It also takes anywhere from 6 to 12 months for a rate reduction to work itself through the system.

We all feel strongly that the long term recovery will come and it is apparent that the world banking systems are doing all they know to do to get us turned around and moving in the right direction.   Personally, I feel fear is the worst place we can go right now as fear tends to paralyze people in thought and creativity and I don’t think we can afford to go there.

Here’s what I do know, I am doing mortgages and getting great rates as are my associates.  If you are a first time homeowner, there are still great programs in the market for you.  If you own a home and have an ARM loan that is going to reset, there are options for you through FHA and THDA.  There are programs and people who are here for you but you must do your part as well.  You must have a good payment, work and income history and be responsible to do your homework as to what is expected from you.

If you do nothing else, find and take a first time homeowner class.  Also find a deal with a lender who cares about you and doesn’t sound like a used car salesman.  You know the type; “What will it take to get you into a loan today?”  You must be careful.

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It is called the Great Rate program because it has the best rate of all the first time buyer programs.  You are rewarded with a good rate for being able to put your own money into the transaction and you are not required to take the Home Buyer Education class, though it is still highly recommended as you will get some great information and guidance through this education.

All other income and acquisition guidelines for these programs apply and you must use an approved THDA lender to carry out the transaction.  The base loan can be either a FHA, VA or conventional and you will need to check with your lender to obtain the current THDA rates for this and the other two programs.

• 1. You can receive a grant for up to 2% so you will have to have at least 1% of your own money in the down payment transaction and either have money for closing costs and prepaid items or negotiate with the seller for these items and
• 2. The interest rate is normally .500% less than the Great Start program. You are rewarded with a lower interest rate for having a little of your own money at risk in the deal.

All the other requirements are the same as far as income and price as well as you will be required to attend the First Time Home Buyers Education class.

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This program is for those families who need help with down payment and closing costs in order to get into a home and you can get a grant up to 4%.  You will need to have a job that shows income and W-2′s over the last two years as well as one years tax return or own a business that has at least two years of tax returns showing income to qualify.  There are income restrictions, depending on how many people are living in the home and location, so do check with your lender before you move forward.

The current rate can change at any time so check with your lender to find out what the rate is today.  This loan is a 30 year fixed and has a requirement that you must go through the Home buyer Education class.  Again, check with your lender to get a full explanation of the recapture tax as well as the best loan of this type, be it FHA, VA or conventional.

THDA traditionally does not provide for refinance loans.  However, because of the changing market, Congress passed the Housing and Economic Recovery Act this year and has made this possible.  There are a couple of things you need to know and the most important is that this refinance loan is not for people who have let their credit fall due to getting behind on their house payments.  It is for people who are making their payments but feel they might get behind once their loans reset.

If you think preventative then you are on the right track.  Most people don’t try to get a refinance until they have already missed several house payments and by this time it is too late.  This is a great loan as long as you take action BEFORE you get behind.

This loan is no different than other THDA loans that must meet other criteria as well in Davidson and many surrounding Counties.  The loans cap is $226,100 and there are income restrictions; $61,600 for 1 or 2 person households and $70,840 for 3 or more people; you can only get these loans through approved lenders that sell the loans to THDA; loans that are larger than 78%LTV (loan to value) must be insured by FHA, VA, Fannie Mae or Freddie Mac and; you must show hardship in one of five areas including a high interest rate and reduction of household income.

You can find out more by contacting THDA or email Taylor at thill@newsouthfederal.com