I’ve heard from some Realtors® that it’s still somewhat challenging to find financing, particularly for modestly prices homes in their markets.
Thanks to the Dodd-Frank bill, we’ve all seen that banks have tightened their lending requirements. Financing lower-priced homes may not be as profitable for many lenders. However, there are options for these buyers, who make up a significant part of our markets. I did a little research and discovered that in the Pittsburgh region 80 percent of the listings on the West Penn Multi-List are properties priced under $100,000. That’s a pretty large percentage of the listings.
First we need to recognize that consumers have to qualify for any type of mortgage. And qualifications are more stringent than they were in the past. I think we would all agree that several years ago, qualifications were too relaxed. The pendulum swung the opposite direction and became too restrictive and now it appears that the situation is leveling off somewhat but the market is still tight.
I’ve found that working with local lenders is a better option for homebuyers looking at reasonably priced properties. Local lenders are more willing to invest in their communities and have a vested interest in helping build home ownership. They may have money that they can offer to local buyers who have good credit.
As a member of the Pennsylvania Housing Finance Agency (PHFA) Board of Directors, I know that PHFA offers some terrific options for those who qualify. Their financing programs include: the Housing Finance Agencies PreferredTM/HFA Preferred Risk SharingTM, the Keystone Home Loan and the Keystone Government Loan. PHFA programs are offered thorough local lenders, which are listed on the PHFA website. Take some time to learn about their programs and help your buyers navigate this process.
Most of us got into the real estate business because we enjoy helping families achieve the American Dream of home ownership. Since the majority of homes are valued at $100,000 and below in many of our markets, it follows that in our real estate careers, we will spend the majority of our time and effort helping consumers in this price range. That will be a major source of our fulfillment and satisfaction in our industry.