The Federal Housing Finance Agency (FHFA) today announced that the 2014 maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will remain at $417,000 for one-unit properties in most areas of the country.
The conforming loan limit in all markets in South Carolina is $417,000.
The Housing and Economic Recovery Act of 2008 (HERA) establishes the maximum conforming loan limit that Fannie Mae and Freddie Mac are permitted to set for mortgage acquisitions. HERA also requires annual adjustments to these limits to reflect changes in the national average home price.
A description of the methodology used in determining the loan limits can be found in the attached addendum. Questions concerning the conforming loan limits can be addressed to LoanLimitQuestions@FHFA.gov.
Further information on potential future changes in the maximum size of loans that Fannie Mae and Freddie Mac guarantee will be forthcoming.
Link to maximum conforming loan limits for 2014.
The Home Builders Association of Greenville are your neighbors and community leaders providing education and support for building industry professionals. We create jobs, encourage homeownership, and promote responsible growth throughout the upstate of South Carolina.
Wednesday, December 4, 2013
At IBS, Learn about Cash to Finance Your Projects
How do you improve on an International Builders’ Show education session on builder financing that last year topped 400 attendees? Rick Mandell, moderator for “How to Cash in on the New Wave of Capital,” has a plan.
This year, he’s added case studies so that panelists concentrating on both debt and equity financing can point to real-life solutions and get builders to “think like the money thinks,” he said.
While more money is beginning to become available to finance home building and development projects, home builders need a clearer understanding of how finance has changed and how to be successful in the post-Great Recession environment.
Builders who seek financing and can explain their objectives in terms that the investors can understand will find a more receptive welcome from private and equity investors looking to see how their investment will turn a profit.
The panel discussions and case studies will conclude with opportunities for individual conversations with potential investors. Even if those investors aren’t active back home in the builder’s own market, “at least [the builder] know how to speak the language” to get non-traditional investors interested in their projects, Mandell said.
Learn more about the Feb. 5 three-hour master session here.
This year, he’s added case studies so that panelists concentrating on both debt and equity financing can point to real-life solutions and get builders to “think like the money thinks,” he said.
While more money is beginning to become available to finance home building and development projects, home builders need a clearer understanding of how finance has changed and how to be successful in the post-Great Recession environment.
Builders who seek financing and can explain their objectives in terms that the investors can understand will find a more receptive welcome from private and equity investors looking to see how their investment will turn a profit.
The panel discussions and case studies will conclude with opportunities for individual conversations with potential investors. Even if those investors aren’t active back home in the builder’s own market, “at least [the builder] know how to speak the language” to get non-traditional investors interested in their projects, Mandell said.
Learn more about the Feb. 5 three-hour master session here.
Building Permits Top 1 Million in October
Issuance of new building permits rose 6.2 percent to a seasonally adjusted annual rate of 1.034 million units in October due primarily to a double-digit increase on the multifamily side, the U.S. Census Bureau reported today.
This follows a 5.2 percent increase in permit issuance in September to 974,000 units.
Census figures for nationwide housing starts for September and October have been delayed until Dec. 18 as a result of last month’s partial government shutdown.
“Despite the recent government shutdown, builders feel a housing recovery is still under way,” said Rick Judson, chairman of the National Association of Home Builders and a home builder from Charlotte, N.C. “However, this fragile recovery still faces a number of challenges, including uncertainty in Washington, tight credit conditions for home buyers and limited availability of labor and lots.”
“Permits are often a harbinger of future housing activity and the strong showing in the multifamily sector along with stable numbers on the single-family side bode well for a continuing, gradual upturn in housing over the coming months,” said senior economist Robert Denk. “But consumer and builder confidence could be seriously undermined unless policymakers make progress over looming budget, tax and economic policy issues in the weeks and months ahead.”
Multifamily permit issuance rose 15.3 percent to 414,000 units in October while the single-family side posted a 0.8 percent gain to 620,000 units.
Regionally, permits issuance in October held steady at 101,000 units in the Northeast and rose 15.4 percent in the West and 9.4 percent in the South. The Midwest posted a 9.6 percent decline.
This follows a 5.2 percent increase in permit issuance in September to 974,000 units.
Census figures for nationwide housing starts for September and October have been delayed until Dec. 18 as a result of last month’s partial government shutdown.
“Despite the recent government shutdown, builders feel a housing recovery is still under way,” said Rick Judson, chairman of the National Association of Home Builders and a home builder from Charlotte, N.C. “However, this fragile recovery still faces a number of challenges, including uncertainty in Washington, tight credit conditions for home buyers and limited availability of labor and lots.”
“Permits are often a harbinger of future housing activity and the strong showing in the multifamily sector along with stable numbers on the single-family side bode well for a continuing, gradual upturn in housing over the coming months,” said senior economist Robert Denk. “But consumer and builder confidence could be seriously undermined unless policymakers make progress over looming budget, tax and economic policy issues in the weeks and months ahead.”
Multifamily permit issuance rose 15.3 percent to 414,000 units in October while the single-family side posted a 0.8 percent gain to 620,000 units.
Regionally, permits issuance in October held steady at 101,000 units in the Northeast and rose 15.4 percent in the West and 9.4 percent in the South. The Midwest posted a 9.6 percent decline.
Here is the Lowdown on Thwarting Low Appraisals
Although stabilizing home values and modest price increases across much of the land are fueling a housing upturn, the recovery still remains tenuous in part because a flawed appraisal process continues to thwart accurate valuations on new homes.
Your Home Builders Association has made it a priority to enact major reforms so that appraisals reflect accurate home values and do not needlessly kill home sales.
Too often, due to faulty appraisal practices, home sales have come in below a contract sales price and brand-new homes with state-of-the art appliances and interior upgrades have been compared to distressed properties. In some cases, this has led to a new home getting appraised at less than the construction cost.
So how can builders fight back against low appraisals and win back sales?
Builder-members who have successfully navigated through the appraisal process offer the following suggestions:
Share data with the appraiser. Builders should provide all relevant data to appraisers, including plans and specifications of the property, information on how their product differs from their competitors, a list of energy-efficiency features in the home, details on materials that were chosen, and the buyers’ reaction to products selected. Builders cannot talk about the specific value of the home, but they can give the appraiser factual information that is verifiable.
Insist on a qualified appraiser. Use lending institutions that hire competent appraisers. If an appraisal assignment goes to an appraiser who you know is unfamiliar with your geographic area, insist that the lender switch to an appraiser who knows the area.
Request an appraiser who is familiar with new construction and/or energy-efficient construction.
Keep a detailed record of data provided to the appraiser (email, notes in calendar, etc.).
Engage with the lender and provide the facts. Nothing prevents a lender from ordering a second appraisal if the first appraisal appears flawed.
Be present during the appraisal. A builder can answer any questions the appraiser has during appraisal of the property and also point out added features, amenities and products that make the house stand out from others in the market.
Stage the property. Just like a buyer looking at an open house, an appraiser is likely to look more favorably on a home that exhibits curb appeal and is clean, clutter-free and move-in ready.
Employ the Tidewater Initiative. This little-known rule at the Department of Veterans Affairs states that if the appraiser determines that the value will come in lower than the sales price, he is required to halt the appraisal before it is completed and make the lender aware of the value coming in below the sales price. This allows any party to the transaction, including the builder, to provide additional information in support of the sales price. Since this is done at the VA, a builder can ask any lender to consider this policy without violating current regulations.
Valuing Green Homes for What They are Worth
Too many appraisals of homes with green features are being conducted by appraisers who simply aren’t trained to recognize the features and adjust valuations accordingly.
One builder and remodeler, Matt Belcher of Hibbs Homes in Wildwood, Mo., came up with a simple solution when he ran into this problem.
Belcher (who certifies his projects to the ICC 700 National Green Building Standard and other sustainability programs) developed relationships with several local lenders who all agreed to require that any appraiser assigned to his projects had undergone training, such as that offered by the Appraisal Institute, to become qualified to appraise high-performance homes.
Belcher also developed a sales contract clause for situations where the buyers prefer to select different lenders. The language, which has been reviewed and enhanced by the Appraisal Institute, states:
“This Home is being built/renovated/updated to nationally recognized standards above prevailing code. It is designed and constructed with unique features and materials and with high-efficient equipment and in accordance with high-efficiency standards. The Lender shall choose an Appraiser educated and knowledgeable in this type of valuation of these specialized Homes, preferably an appraiser who holds a professional appraisal designation that requires advanced education on such issues as the valuation of sustainable buildings (e.g., MAI or SRA designations from the Appraisal Institute). The appraiser shall provide verification of green valuation education of 14 hours or more from a qualified educational provider and knowledge to be permitted to conduct the appraisal for this project.”
The requirement seems to be working. After one recent episode in which Belcher thought the project was undervalued, he used the clause to request another appraisal from the lender, this time to be done by a person whose qualifications he could verify. The second appraisal came back reflecting a value that was much more appropriate.
Builders and remodelers who face green appraisal challenges are encouraged to refer to the NAHBGreen Toolbox: Overcoming Appraisal Challenges for additional ideas.
Your HBA Leads the Way
Your Home Builders Association has taken a leadership role on appraisal issues by bringing industry stakeholders and regulators to the table at five summit meetings that it has conducted at the National Housing Center in Washington, D.C.
Your Home Builders Association has also adopted policy on appraisals that calls for:
Your Home Builders Association has also developed excellent resources to help its members successfully navigate the appraisal process. These include:
Your Home Builders Association has made it a priority to enact major reforms so that appraisals reflect accurate home values and do not needlessly kill home sales.
Too often, due to faulty appraisal practices, home sales have come in below a contract sales price and brand-new homes with state-of-the art appliances and interior upgrades have been compared to distressed properties. In some cases, this has led to a new home getting appraised at less than the construction cost.
So how can builders fight back against low appraisals and win back sales?
Builder-members who have successfully navigated through the appraisal process offer the following suggestions:
Share data with the appraiser. Builders should provide all relevant data to appraisers, including plans and specifications of the property, information on how their product differs from their competitors, a list of energy-efficiency features in the home, details on materials that were chosen, and the buyers’ reaction to products selected. Builders cannot talk about the specific value of the home, but they can give the appraiser factual information that is verifiable.
Insist on a qualified appraiser. Use lending institutions that hire competent appraisers. If an appraisal assignment goes to an appraiser who you know is unfamiliar with your geographic area, insist that the lender switch to an appraiser who knows the area.
Request an appraiser who is familiar with new construction and/or energy-efficient construction.
Keep a detailed record of data provided to the appraiser (email, notes in calendar, etc.).
Engage with the lender and provide the facts. Nothing prevents a lender from ordering a second appraisal if the first appraisal appears flawed.
Be present during the appraisal. A builder can answer any questions the appraiser has during appraisal of the property and also point out added features, amenities and products that make the house stand out from others in the market.
Stage the property. Just like a buyer looking at an open house, an appraiser is likely to look more favorably on a home that exhibits curb appeal and is clean, clutter-free and move-in ready.
Employ the Tidewater Initiative. This little-known rule at the Department of Veterans Affairs states that if the appraiser determines that the value will come in lower than the sales price, he is required to halt the appraisal before it is completed and make the lender aware of the value coming in below the sales price. This allows any party to the transaction, including the builder, to provide additional information in support of the sales price. Since this is done at the VA, a builder can ask any lender to consider this policy without violating current regulations.
Valuing Green Homes for What They are Worth
Too many appraisals of homes with green features are being conducted by appraisers who simply aren’t trained to recognize the features and adjust valuations accordingly.
One builder and remodeler, Matt Belcher of Hibbs Homes in Wildwood, Mo., came up with a simple solution when he ran into this problem.
Belcher (who certifies his projects to the ICC 700 National Green Building Standard and other sustainability programs) developed relationships with several local lenders who all agreed to require that any appraiser assigned to his projects had undergone training, such as that offered by the Appraisal Institute, to become qualified to appraise high-performance homes.
Belcher also developed a sales contract clause for situations where the buyers prefer to select different lenders. The language, which has been reviewed and enhanced by the Appraisal Institute, states:
“This Home is being built/renovated/updated to nationally recognized standards above prevailing code. It is designed and constructed with unique features and materials and with high-efficient equipment and in accordance with high-efficiency standards. The Lender shall choose an Appraiser educated and knowledgeable in this type of valuation of these specialized Homes, preferably an appraiser who holds a professional appraisal designation that requires advanced education on such issues as the valuation of sustainable buildings (e.g., MAI or SRA designations from the Appraisal Institute). The appraiser shall provide verification of green valuation education of 14 hours or more from a qualified educational provider and knowledge to be permitted to conduct the appraisal for this project.”
The requirement seems to be working. After one recent episode in which Belcher thought the project was undervalued, he used the clause to request another appraisal from the lender, this time to be done by a person whose qualifications he could verify. The second appraisal came back reflecting a value that was much more appropriate.
Builders and remodelers who face green appraisal challenges are encouraged to refer to the NAHBGreen Toolbox: Overcoming Appraisal Challenges for additional ideas.
Your HBA Leads the Way
Your Home Builders Association has taken a leadership role on appraisal issues by bringing industry stakeholders and regulators to the table at five summit meetings that it has conducted at the National Housing Center in Washington, D.C.
Your Home Builders Association has also adopted policy on appraisals that calls for:
- Strengthening education, training and experience requirements for appraisers of new construction.
- Improving the quantity and quality of data for new construction.
- Developing new appraisal standards and best practices for conducting appraisals in distressed markets.
- Developing a process for expedited appeals of inaccurate or faulty appraisals.
- Strengthening oversight of appraisal activities.
- Streamline and coordinate the current regulatory framework and devote adequate resources to ensuring effective oversight and enforcement.
- Create a real estate data “superhighway” with a national real property registry and supporting networks.
- Reaffirm and streamline key appraisal principles contained in the Uniform Standards of Professional Appraisal Practice.
- Establish uniform credentialing standards specific to each area of appraisal practice.
- Enact a consistent set of rules and guidelines for appraisals.
- Consider all three valuation approaches – cost, income and sales comparison.
- Develop a dispute resolution process for expedited appeals of inaccurate or faulty appraisals.
- Establish a standard and a process to get the best appraisers for each assignment.
Your Home Builders Association has also developed excellent resources to help its members successfully navigate the appraisal process. These include:
- A two-page summary for members on how to build stronger and more productive relationships with appraisers.
- A “Builders Guide to Appraisals” webinar, which is available here. The webinar features a panel of home builder and appraisal practitioners who discuss appraisal rules and provide advice to help builders improve the accuracy of their home valuations.
- An Appraisal Primer that provides a detailed overview to help NAHB members better understand the appraiser’s role in the financing of new homes.
NAHB International Builders' Show
The NAHB International Builders’ Show (IBS) is the largest annual light construction show in the world, and this year, attendees will have access to the exhibit floors of two of the biggest tradeshows for design and construction professionals! Join us for IBS February 4-6, 2014 in Las Vegas!
Enjoy a free 3-day exhibit pass, courtesy of 2-10 Home Buyers Warranty. IBS will be co-located with The Kitchen & Bath Industry Show, launching the first annual Design & Construction Week and you won't want to miss it!
Click here to register for your free pass. For more information about the NAHB International Builders' Show, click here.
Enjoy a free 3-day exhibit pass, courtesy of 2-10 Home Buyers Warranty. IBS will be co-located with The Kitchen & Bath Industry Show, launching the first annual Design & Construction Week and you won't want to miss it!
Click here to register for your free pass. For more information about the NAHB International Builders' Show, click here.
Multifamily leads housing recovery
A large chunk of the credit for our improving economy belongs to multifamily construction. Since hitting a trough of 111,000 multifamily permits in October 2009, multifamily activity has quickly recovered. This past October there were 418,000 multifamily permits pulled, an amazing 73% of the permits pulled in March 2006, the single best month since the late 1980s. If single-family were doing that well, we'd be at 1.3 million SF permits.
Elliot F. Eisenberg, Ph.D.
GraphsandLaughs, LLC
www.econ70.com
Elliot F. Eisenberg, Ph.D.
GraphsandLaughs, LLC
www.econ70.com
Tuesday, December 3, 2013
OSHA's 2013 TOP TEN Most Frequently Cited Violations
The following is a list of the top 10 most frequently cited standards* following inspections of worksites by federal OSHA. OSHA publishes this list to alert employers about these commonly cited standards so they can take steps to find and fix recognized hazards addressed in these and other standards before OSHA shows up. Far too many preventable injuries and illnesses occur in the workplace.
- 1926.501 - Fall Protection (Construction Standard)
- 1910.1200 - Hazard Communication
- 1926.451 - Scaffolding (Construction Standard)
- 1910.134 - Respiratory Protection
- 1910.305 - Electrical, Wiring Methods
- 1910.178 - Powered Industrial Trucks
- 1926.1053 - Ladders (Construction Standard)
- 1910.147 - Lockout/Tagout
- 1910.303 - Electrical, General Requirements
- 1910.212 - Machine Guarding
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