Over at the Seattle PI, Aubrey Cohen posted on April 17th that Washington State may begin giving first time home buyers a loan based on the $8,000 credit they will be receiving from the federal government.

The Washington Senate Ways and Means Committee approved the measure Wednesday, April 15th. The amendment, which still needs to be approved in both the state Senate and House as part of the state’s buget, and then signed by Governor Chris Gregoire, would create a $25 million fund to provide first time buyers a short term loan of up to $8,000. That short term loan could then be used as a down payment or help with closing costs.

Washington Realtors, who sent a letter to its members after Wednesday’s approval of the measure, is quoted as saying, “Lack of down payment is the only barrier to home ownership for up to 50 percent of qualified first time home buyers. The Washington State Treasurer’s Office, Housing Finance Commission and Washington Realtors are proposing a Tax Credit Advance Loan program that would advance the $8,000 tax credit at closing of a home sale and be repaid when the credit is received by the IRS.”

Washington Realtors bring up a good point. The $8,000 loan would help some buyers have a little more of a down payment. It could help reduce closing costs that first time buyers may not want to wrap into their home loans.  This additional boost has the potential to help increase starter  home sales across the state .

One of the commentors over at the Seattle Real Estate News brought up another valid point. She asked where the money will be coming from, since our state is facing a deficit situation.

Will the Tax Credit Advance Loan Program amendment help more first time buyers get into homes or will it cause a problem for the state? Is there potential for people to default on their loans? Where will the $25 million come from? As the budget winds its way through both the Senate and the House, this amendment will definitely be one to watch.

With the increase of short sales , along with foreclosed properties, being listed for sale in the Pacific Northwest, the Northwest Multiple Listing Service began requiring the disclosure of short sales in the remarks section of a new listing a year ago.

After fielding numerous agent requests for a check box feature on the NWMLS regarding short sales and foreclosures, the folks at the NWMLS responsed. As of April 29, 2009, when an agent lists a new property on NWMLS, there will be boxes to check to indicate if the sale requires 3rd party approval, as in a short sale, or if it is lender owned, as it would be in a foreclosure. This new feature then gives agents the ability to include, or exclude, short sales and foreclosures when searching for properties to view.

If a client is looking to invest in a rental home and is interested in short sales and foreclosed properties, the agent can use the new feature to specifically search for such homes available in the client’s target price range. If a client needs to purchase a home and close by a finite date, a short sale may not be the best home to buy because the sales are more complicated and take longer; the agent can then exclude all short sale and foreclosure property when searching for homes in the client’s price range.

It is hoped that the new search feature on the NWMLS with both save time and give agents a strong tool to help meet their clients’ buying criteria. Kudos to the people over at the NWMLS for working with the information provided by local agents and responding to meet needs relevant to the current real estate market in the Pacific Northwest.

March Highlights: Inventory up from 174 in February to 193 in March. Pending sales volume was down in March. Months of inventory increased as a result of slowing sales activity. Average sales prices are down 51.2% from March 2008, however, the significant declines are not representative of an average loss in value, but rather are a result of more sales of less expensive homes in each market segment. – Julie Nugent

Amy Hoak’s article, The Return of the Jumbo Loans,  discusses the recent growth in the availability of lower interest rate jumbo loans. Here are a couple of highlights from the article:

• Bank of America, GMAC and ING are currently offering competitive, lower interest rate jumbo loans, even on a 30-year fixed-rate mortgage

• rates on 30-year fixed-rate jumbo mortgages averaged 6.5% for the last full week in March

It is prudent to do your homework when considering a jumbo loan. First, take a look at the potential dollar amount for your purchase or refinance. Compare it to the current maximum for conforming loans in your county. The jumbo loan taken out a few years ago may be a conforming loan in your area today.

Once you determine that you are indeed in the market for a jumbo loan, you will need to compare each bank’s requirements. Be forewarned, the loan prerequisites are more stringent today and the loan process, regardless of the type, takes longer, and is more complicated, now. The details regarding jumbo loans varies greatly from bank to bank, according to Hoak’s article.  Make sure you meet all the requirements for your preferred financial institution before starting the loan process.

When compiling information to decide which bank to use,  if you have a relationship with an agent, ask for industry expert recommendations so you can discuss your lending needs with a professional. Talk with friends and family, to see if they know anyone who’s in the process of obtaining a jumbo loan. Don’t forget to look at what local credit unions or smaller, regional banks may be offering in the jumbo loan market.

The Windermere office on Mercer Island can help you with your loan research. Please give us a call at 206-232-0446; we can provide you with contacts and resources for local jumbo loan providers.