Remember to pay your property tax! The second installment was due on February the 1st and if not paid, it becomes delinquent on April the 10th. For more information, consult the Los Angeles County Property Tax Portal.

Have any of your friends or relatives been considering buying a house in Hancock Park or maybe buying a duplex in Beverlywood or selling their condo in Santa Monica, or their house in Beverly Hills?
If you do, this is a great time to refer them to me and also contribute money the charity of your choice when they need it the most!

Wishing you all a Happy Thanksgiving!

Working in concert to meet a tight deadline, Congress and the White House have raised the FHA loan limit in high-cost real estate markets, making it easier to obtain an FHA loan on properties up to $729,750*.

Following passing votes in the House of Representatives and Senate, President Obama signed HR 2112, the Consolidated and Further Continuing Appropriations Act of 2012, into law, renewing the expired higher loan limits for Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) loans for an additional two years, through December 31, 2013.

The limit to conforming loans was reduced to $625,500 on October 1, 2011, when a previous increase in conforming loan limits expired. With the passage of this legislation, the FHA loan limit has been restored to $729,750. While the loan limit has been increased for FHA loans, the increase does not affect limits for conventional loans backed by Fannie Mae or Freddie Mac.

Higher loan limits give borrowers another home-financing option to consider in high-cost areas of the country, such as California and New York. Borrowers could take out a jumbo loan, which typically requires a larger down payment. They now have the option of using an FHA loan with a lower 3.5% down payment requirement.
This is a great time to buy real estate! Call or email me if you have any questions.

PRIME MORENO HIGHLANDS LOCATION! BEAUTIFUL VIEWS OF THE RESERVOIR! Bright and cozy home with hardwood floor though out. Great floor plan, with 3bd upstairs. Bottom level has a spacious family room w/fireplace, den/office, formal dining room and the kitchen opens up to a huge deck looking out to the reservoir, perfect for outdoor dining and entertainment. The lower level features a 2 room recording studio (could easily be turned into anything else), an office space and a full bathroom! The 2 level grassy yard looks out to the reservoir. This is great house and it’s priced to sell!!

And I also just got a new listing contract signed today:  a great 3bd house in Silverlake with its own music studio, and beautiful views of the Reservoir!

It couldn’t happen at a better time, on the eve on Rosh Hashana, so of course it’s going to be a great year!

Congratulations and Mazeltov!

Back in 2008, when the American housing market was at its worse, Congress agreed to temporarily raise the conforming loan limits from $417,000 to as high as $729,750 for the more expensive markets such as our Los Angeles Westside where houses and condominiums in Beverly Hills, Brentwood, Bel Air, Santa Monica, Hancock Park, Los Feliz and Silverlake etc. are definitely some of the priciest in the country. Loans above the conforming loan limits are considered “Jumbo Loans” and consequently require higher down payments and have higher interest rates and they have tougher qualifying criterias in general.
This move was intended to and and was successful in boosting the sale of homes and properties in all price ranges. Indeed, when higher priced properties start selling, the entire momentum of the market profits from the trend of one market.

On October 1st 2011, the conforming loans limits are scheduled to be lowered again in expensive markets across the nation from $483,000 to $625,000 for our Los Angeles local market. For instance, in Los Angeles Westside, the conforming loan limits will be lowered from $729,750 down to 625,000.

What does that mean concretely?

• Currently you can buy an $800,000 house in West Hollywood or Beverlywood or an $800,000 condominium in Santa Monica or Brentwood with only 10% down payment ($80,000) and take out a Conforming 30 year Loan of $720,000 at an approximate 4.25% interest rate yielding a mortgage payment of $3,520/month.
• If the Conforming Loan limits do not get extended by Congress before Oct 1st. In order to buy the same $800,000 property and if you still want to take advantage of the same 4.25% Conforming Loan interest rate, you will now have to have a down payment of $175,000 (approx. 22%) in order to take out a newly lowered maximum Conforming Loan of $625,000 (or less), yielding a mortgage payment of $3,056/month.
  If you do have access to $175,000 and you still want to buy that $800,000 property, you can still buy it with 10% down ($80,000) but your $720,000 loan will no longer be a Conforming Loan, it will be a “Jumbo Loan”. Consequently, you will have qualify for a higher monthly mortgage payment at a higher interest rate which could be at approximately 5% yielding a monthly payment $3,865; and also qualify for other stricter criterias.

Consequently, approximately 1.4 million properties nationwide will be pushed out of eligibility for lower rate and lower down payments and will have to be purchased with a Jumbo Loan, requiring 20% minimum down payments and higher interest rate loans.

What does it mean for the market in general? The sale of higher-end homes will most likely slow down, and the prices could go down again, possibly dragging with it the middle range market. Which could be good for the “stellar” buyer with access to larger down payments and with higher credit scores but it will also mean that a lot of the “average” buyers with access to less cash for their down payments and moderate to normal income maybe shut out of buying their dream homes even if the prices go down and even if they could technically afford them.

Congress still has a few more days to vote on extending the conforming loan limits and whether it will happen or not is anyone’s guess! So if anything changes, I will make sure to keep you informed.

Cheers!