FHA Guidelines (a Cheat Sheet)

The Coyle Group - HUD LogoThis is a special announcement to all of our real estate agent friends out there.  The Philadelphia Appraisers at the Coyle Group just published “The FHA Cheat Sheet”.  It was developed in response to agents, who for years, have asked us “is there a comprehensive list of FHA requirements?”  Well, it may not be comprehensive but, The Coyle Group has compiled a list of 40 of the most frequent FHA repair items and issues that face sellers, buyers and agents.  Gain some insight on how the FHA views defective paint or cracked pavement.  See what to do about broken window and graffitti…plus a whole lot more.  We’ve even include a BONUS Tip at the end!

If you are interested in receiving a PDF copy of the FHA Cheat Sheet, please send an email with your full name and email to appraisals@coyleappraisals.com be sure to put FHA in the subject line. 

For more information be sure to visit our website at www.thecoylegroupllc.com or contact us by phone at 215.836.5500

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Inventory Levels

Inventory levels in the Philadelphia housing market are up over January 2010.  The latest data TReND MLS reports the following:

County Available Units Months of Inventory
Philadelphia 8,138 9
Montgomery 4,829 8
Bucks 3,421 8
Delaware 3,367 9
Chester 3,361 9

* Calculations based on single family dwellings as of 02/14/2011

These numbers basically tell us that if no more homes were listed for sale as of today, it would take 8 or 9 months to sell off the current inventory of homes.  This is an over-supply.  When there is an oversupply in the real estate market this puts downward pressure on pricing. 

Back when the market was on fire in 2004-2006, it was not uncommon to see inventory levels in the 2-3 month range.  In some areas, there were months that the levels went under 2 months.  Homes were selling the day that they went on the market.  This was a classic example of undersupply.  An “in balance” inventory is generally viewed as being between 3-6 months of supply.

It will be interesting to see how inventory levels are affected as the Spring Selling season begins.  Traditionally, Spring is the time when Sellers list their homes.  So we may see an uptick in inventory as new listings hit the market.  The question is, will the Spring Buyers be there to soak up the inventory?

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FHA Q&A

 

Also, take into consideration, that while the FHA may be OK with these conditions, most Buyers in the Philly region are not.  Would you be OK purchasing a property with either of these situations present?   

As more and more Buyers use FHA financing, Sellers and their Agents will have to educate themselves on the FHA repair guidelines and requirements.  This can be a daunting task.  As of today, the HUD Handbook, also known as Valuation Analysis for Single Family One-to-Four-Unit Dwellings (4150.2) is comprised of nine chapters and four appendices, totaling hundreds of pages.  And, it seems like the handbook is revised or updated on a weekly basis.  

When marketing your home, try to position it to appeal to the widest range of buyers.  If your home’s sale price is at or under the current FHA program limits for the Philadelphia region ($420,000) then you would be wise to make sure that your home is compliant with the FHA guidelines and be prepared to repair any FHA required repairs or inspections.  

If you don’t know the FHA Guidelines 4150.2 and how they apply to your situation, you may want to consider hiring an FHA Appraiser to visit your property prior to listing.  In addition to providing a Pre-Listing Appraisal, the Appraiser could point out potential FHA issues that might affect a potential Buyer’s ability to obtain funding as well as issues that could be addressed ahead of time…essentially taking them off the negotiating table and possibly speeding up the selling process.   

For answers to any other FHA related questions, please feel free to send us an email or just post to this site.   

 

Q: What do these two pictures have in common?  

A: They are both acceptable property conditions under FHA Guidelines.  Now, local laws and zoning may take issue with heaving concrete sidewalks and blood stained flooring surfaces but, not HUD/FHA.  In Mortgagee Letter 2005-ML-48, these conditions were cited along with a list of other “minimum property conditions that no longer require automatic repair.”

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