Thursday, November 3, 2011

Call to action: contact your member of Congress about lowered loan limits

The National Association of Home Builders issued a call to action today asking HBA members to contact their members of Congress and seek their support for extending the conforming loan limits for Federally-backed home mortgages.

If you and your customers want to continue to receive the types of mortgages you have become used to getting, the ones with the best interest rates, lower fees, a lower down payment requirement, and less stringent credit requirements, you need to tell your U.S. Representative to extend the conforming loan limits for home mortgages backed by the Federal government.

"Conforming Loans" are those mortgage loan amounts that qualify to be backed by the Federal government under programs run by Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA).  On September 30 Congress allowed the maximum limits for loans backed by the Federal government to expire, and the average loan limit fell by about 10 percent.

For the Upstate, the conforming loan limits did not change for Fannie Mae and Freddie Mac.  The limits did change, however, for FHA-backed mortgages.  The limit dropped 8 percent to $271,050 on a home with a maximum price of $280,881 in Greenville, Pickens, and Laurens counties.  According to NAHB, 2.24 percent of Greenville County's owner-occupied housing stock no longer qualifies for an FHA mortgage.  In Pickens County, 1.61 percent of owner-occupied homes no longer qualify, and in Laurens County 1.82 percent no longer qualify.

Fannie Mae, Freddie Mac, and FHA guarantee most traditional mortgages in America today. What are the consequences of these changes?  The next time you, your family, or your customers seek a mortgage that are higher than these lowered limits, you will be required to seek what is called a Jumbo Mortgage. These mortgages come with higher rates, higher fees, higher down payment requirements, and stricter credit requirements.

Wednesday, November 2, 2011

NewGeography report finds that more Americans are moving to detached housing

Conventional wisdom, the national media, and planning professionals would have you believe that Americans are moving to attached housing (apartments and condominiums) in droves.  A report by NewGeography finds reality defies that conventional wisdom.

NewGeography analyzed the top 51 housing markets (over 1 million population) and compared Census data from 2000 and 2010.  The results of their findings include:

  • Single-Family Detached housing attracted 79.2 percent of new households
  • Multi-Family Attached housing attracted 11.8 percent of new households
  • Two-Unit Attached housing attracted 11.3 percent of new households
  • Other housing, like mobile homes and boats, declined by 2.3 percent
A total of 4 million new new single family homes were added in the 51 markets, while apartments and condominiums added 590,000 units and attached houses added 570,000 units.

Planners argue that condominiums tend to be more attractive in larger housing markets due to higher land costs.  However, planners and demographers do anticipate a slight shift in preference to attached housing in the coming decades as Generation Y enters the housing market.

Tuesday, November 1, 2011

HBASC seeks to reverse S.C. Supreme Court decision that will kill economic development

Earlier this year the SC Supreme Court issue a ruling that sent shock waves through the development community.  The ruling, in the SC League of Women Voters vs. Smith Land Company, nullified case law practice for many years by:

1. Zero Tolerance: the court ruled that any discharge into the environment must be permitted – this case involved filing part of .19 acre on a .33 acre lot that was not required by state or federal law to have a permit.

2. Encourages Lawsuits: the court also ruled that anyone could have “standing” in a case, and they did not have to be directly impacted by the issue. In the past the individual filing the lawsuit had to be directly impacted to file the case. This now opens the door for a flood of litigation from every activist group in state.

If this ruling is allowed to stand, economic development in this state could come to a grinding halt as anti-economic development groups sue every business that wants to come to the state, and companies will locate in less litigious states.

The Home Builders Association of South Carolina will participate in legislation in 2012 intended to reverse this ruling.

If you are interested in the pro-housing agenda of your Home Builders Association, attend the Legislative Conference in Columbia on November 9.  Click here to register for the Home Builders Association Legislative Conference.