San Antonio Texas Real Estate Daily

At a time when the nation’s housing market is crashing and dragging down the stock market with it, a new report shows Texas is the strongest state in the nation for buying homes as investments, 1200 WOAI news reports.

Homevestors, the nationwide wholesale housing company, says of the ten best cities for buying homes as investments in the country, four of the top five are in Texas, Dallas, Houston, Ft. Worth, and San Antonio.

“In the seven years we’ve been doing business, this is the best time we have seen for investors to be buying properties to use as rentals,” said local Homevestors franchise owner Cindy Bartelli.

Homevestors of America, based in Dallas, is the number one home buyer in America.  Homevestors says it based its findings on the number of houses bought in each market by franchisees in the third quarter of 2008.   “It’s harder for people to get loans for their houses now, and because people are not going to be able to get loans to buy, people are going to be needing to rent properties,” Bartelli said.

She says fully one half of all housing units in San Antonio are occupied by renters.

Credits: WOAI

On Oct. 1, the U.S. Department of Housing and Urban Development ended a nearly decade-long practice that allowed sellers to provide cash gifts toward buyers’ down payments.

Now, neither the seller nor any other person who will make money off the sale — including real estate agents, brokers, builders and loan officers — can give a buyer money to cover a down payment.

However, there are still ways to get help with mortgage-related expenses. San Antonio homeowners can accept other gifts as well as aid from nonprofit organizations and government agencies. The existing assistance programs vary by income and factors such as whether one is a first-time home buyer or a military veteran, but they can provide thousands of dollars toward upfront expenses, fees, closing costs and the down payment.

Acceptable gifts

HUD banned gifts from interested parties, but buyers still can receive gifts from friends, family and any organizations as long as they have nothing to gain from the sale, according to HUD spokesman Brian Sullivan.

Gifts can be made directly to the buyer. The lender must track how much money comes from each noninterested donor and have proof the cash gift does not require the buyer to make any payments to the donor.

“This is back-to-basics lending,” he said. “When you link the gift to the deal, it increases the likelihood that the cost of the gift was just being added into the loan and provided an unx healthy link between the buyer and seller.”

Middle-class help

When Carolyn Tyler decided to buy a home, she turned to the Neighborhood Assistance Corporation of America.

NACA provides mortgages up to $200,160 in Bexar and surrounding counties but charges no down payment, closing costs, points or application or origination fees. Borrowers also get an interest rate that is 1 percent below prime market rate.

Tyler was attracted to NACA because it is one of the few programs that has no caps on income or the number of times a buyer can have owned a home. Her income as a bursar at Northwest Vista College would have exceeded most income caps. Plus, she previously owned a house in Natchez, Miss., which would have been disqualified her for down payment programs limited to first-time home buyers.

But she said also liked that NACA would cover most of the closing expenses, while letting her keep her savings.

“Why should I pay more than I have to,” she said. “It’s a really good program, and I have referred people to it.”

To get the loan, she had to pay for a credit report. She also had to show she had paid all debts on time for the last 24 months and that she could make the projected mortgage payment. Tyler kept a diary of her expenses for one month to prove she could pay the $236 a month in extra housing expenses that would come with buying her desired house.

She expects to close Oct. 15 on a new $151,000, three-bedroom, two-bathroom house.

Low-income help

In most cases, down payment assistance is limited by income. For instance, the Neighborhood Housing Services of San Antonio Inc. provides primary mortgages and up to $21,000 in a second loan to cover fees and closing costs for buyers whose income is 80 percent of the median family income in the county. That equals about $44,000 for a family of four in Bexar County.

NHS can make secondary loans of up to $15,000 to borrowers between 80 percent and 120 percent of median family income, but no loans to buyers with higher incomes.

Most NHS buyers pay about $1,200 upfront, to cover for down payment and fees, plus two months of mortgage payments. in savings.

With the tighter credit market, NHS buyers are finding they also must have a credit score of at least a 650 to get an initial mortgage. That’s up from the minimum 575 score 18 months ago, according to Robert Jodon, executive director at NHS.

His agency has partnered with Consumer Credit Counseling Services of Greater San Antonio to help potential buyers strengthen their credit scores. He is counseling buyers to spend more time improving their credit scores to get approved for loans.

“We’re back to where we were 20 to 25 years ago in terms of underwriting,” Jodon said.

Veterans help

Texas veterans long have been provided down payment assistance through the Veterans Administration and Texas Veterans Land Board’s Housing Assistance Program. However, new local aid is available as well.

Last month, the city of San Antonio began offering up to $15,000 toward down payment and closing costs to veterans who are first-time home buyers and whose incomes are 80 percent or less of the median family income in Bexar County.

“We wanted to help our veterans,” said Adolph Torres, housing loan coordinator for the city of San Antonio’s Housing and Neighborhood Services Department.

The program has no sales price limit, but the veteran’s total monthly debt payments must be less than 41 percent of the family’s monthly income.

Check around

Buyers should expect to spend time finding down payment help, real estate experts say.

Housing experts also find that potential buyers who consult multiple real estate agents, mortgage brokers and lenders for advice have better success finding help making a down payment.

That’s because companies differ on which loan assistance programs they offer. Moreover, while one broker might not be able to guide a buyer into a down payment assistance program, a different real estate expert might be able to help the buyer.

For most would-be buyers, the most accessible assistance program still is the Federal Housing Administration’s loan insurance program, It has a low down payment requirement and no income caps, accepts repeat home buyers and has lower credit score requirements than conventional loans.

A buyer must contact a lender to get an FHA-insured loan. By getting the FHA-insured loan, the buyer can make a 3 percent down payment to buy a house. The minimum down payment on FHA-insured loans will increase to 3.5 percent Jan. 1, 2009.

Credits: My San Antonio

New-home starts dipped 33 percent during the last quarter, but still were outpaced by the number of home closings, according to a new report.

Still, rising lot inventories signal that the San Antonio housing market still has a supply imbalance, experts say.

San Antonio builders started 2,330 new homes in the three-month period ended Sept. 30, down 33 percent from the same period last year, according to Residential Strategies Inc. They closed sales on about 2,600 homes during the third quarter, down 36 percent from a year earlier.

That places builders on track to sell between 10,500 and 11,000 new homes by year-end, RSI’s San Antonio representative Cassie Gibson said.

San Antonio builders have been working to reduce housing inventories since late last year. While it appears to be working, based on the number of homes sold, builders are seeing a rising level of empty lots.

The number of vacant developed lots was 39,884, up 2,000 lots from the previous quarter. That’s more than double the level considered to represent a balanced housing market.

“San Antonio’s 50.7-month supply is the highest of Austin, the DFW-corridor,” Gibson said.

Michael Moore, a partner in Ironstone Development, said housing demand is so slow that his business nearly has dried up.

“At any one time, we used to have four to five projects going; but this year, we haven’t started a new subdivision in nine months,” said Moore, president of the Greater San Antonio Builders Association.

San Antonio housing developers say inventories could continue to rise as demand dips in response to tightening credit and new federal rules that ban builder-funded cash gifts to buyers. Those gifts played a key part in sales for new homes priced under $150,000, he said.

Credits: My San Antonio

Democrats and Republicans who voted against the $700 billion bailout package braced Tuesday for pressure from party leaders anxious to reverse the bill’s dramatic defeat.

Rep. Ciro Rodriguez, D-San Antonio, acknowledged that politics played a role in his decision to vote against the bailout package, but said he might be willing to support an alternative that had more teeth and greater transparency.

A more likely target for conversion is Rep. Henry Cuellar, D-Laredo, who has a Republican opponent Nov. 4 but whose district is overwhelmingly Democratic.

“I’m open,” Cuellar said. “I just want to make sure we’ve got a bill that wasn’t rushed in and has taxpayer protection. I think we can move forward.”

Cuellar was meeting with local bankers and financial leaders in his South Texas district. A meeting with constituents in Cotulla brought angry calls for the lawmaker to vote against a bailout of Wall Street bankers in New York, he said.

Rank-and-file lawmakers returned to their home states to campaign after the bill was defeated on a 205-228 vote Monday.

Many were talking with constituents, who have flooded lawmakers’ Washington offices with phone calls and e-mails opposing the bailout.

Rodriguez, who faces a tough re-election fight with Bexar County Commissioner Lyle Larson, a Republican, said calls to his office were running 9 to 1 against the bailout.

While Democratic leaders accused Republicans who voted against the legislation of placing politics before the good of the country, Rodriguez conceded that the argument could be applied to anyone who voted against the bill, including himself.

“It applies to everybody, in all honesty,” he said.

Party leaders spent Tuesday sifting through the wreckage of the bill, seeking a compromise that could sway just 12 lawmakers needed to pass legislation that President Bush called crucial to the country’s financial well-being.

Bush was the first to apply pressure on House lawmakers, who will return to Washington later this week.

“I recognize this is a difficult vote for members of Congress,” Bush said. “But the reality is that we are in an urgent situation, and the consequences will grow worse each day if we do not act.”

Presidential nominees Sen. Barack Obama, D-Ill., and Sen. John McCain, R-Ariz., called on the public to support the bailout package. The candidates endorsed a measure to be included in the package that would raise the federal deposit insurance on bank accounts from $100,000 per account to $250,000.

House Republican Leader John Boehner, R-Ohio, called that measure “welcome news” and one that GOP lawmakers would support.

Democrats were eyeing bankruptcy provisions that would help homeowners.

Henry Cisneros and Jack Kemp, former housing secretaries under President Clinton and former President Bush, respectively, last week urged Congress to include bankruptcy provisions for homeowners in the bill.

Those provisions would allow bankruptcy judges to renegotiate mortgages for families on the brink of foreclosure.

Rep. Charlie Gonzalez, D-San Antonio, who voted in favor of the bill, said the bankruptcy provisions would bring Democratic support, specifically from the Congressional Hispanic Caucus and the Congressional Black Caucus.

“I think that is a good idea,” Gonzalez said. “The financial industry doesn’t like it, but why not give some people control over this.”

Rep. Lamar Smith, the ranking Republican on the House Judiciary Committee, said congressional leaders must now go back and take time to explain an alternate bill to the public and doubting lawmakers.

“Yesterday we had less than 24 hours to digest the bill and appreciate how it had been improved from the earlier version,” said Smith, R-San Antonio, who nevertheless voted for it.

Smith said additional provisions to protect the taxpayer would help nudge a few more Republicans to support the bill.

It was unknown when the House would reconsider the legislation.

House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., said defeat of the package resulted in “severe economic impacts both on Wall Street and Main Street.”

They said a historic drop in the stock market resulted in a loss of $1.2 trillion in savings, investments and retirement funds for American families and small businesses, although the market recovered some of those losses Tuesday.

Credits: My San Antonio