All Forum Posts by: Tyler Rowland

 The goal of the legislation was to incentivize builders to build homes that are priced $450,000 or below.

There are builders that are starting to build townhomes in that price range and below.  Average townhome prices are around $340K in Cedar City.  

For my Market in Cedar City, this will be a great one for Manufactured homes.  No rate adjustments for manufactured homes. 

As to whether wages are where they need to be for a home priced in that $450,000 range, it depends on the city in Utah.  In my city that is not the case.  You pretty much need two incomes to afford something around that price range IMO.  Ever since 2020 that has been the case.  Prices are mostly being driven by low inventory.  Hopefully this first time home buyer incentive creates more inventory and affordable housing.  But that remains to be seen.

Logan M. agreed, 

definitely a double edged sword, and no regrets really in the last 2 or 3 years on purchases.  I hesitated sharing the program on BP, because its not a really an investment loan and they really stay on top of whether you are actually living in the home as a primary residence or not.  But it can open the door to home ownership.  Which at least for me was a step in the right direction for real estate investing.  

Michael, if you are willing to live in the house you can STR rooms in most of the cities in Washington County. You can even STR a casita or mother in law suite if you live on the property. I have been seeing a more people get around the STR market by requiring 30 day minimum rentals on the various STR sites.

Iron County is still pretty free when it comes to Airbnb and others.  Hopefully it stays that way.  

Today, I wanted to highlight some of the features for the First-Time Homebuyer Assistance Program in Utah. There has been a lot of Buzz about this program and what it does for first time homebuyers and when it is appropriate to use.

Starting from the top…

1. You can use up to $20,000 that can be used for a down payment, closing costs, and/or permanent Interest Rate buydown. Assistance Program loan is a 0% interest, No-Monthly payment loan secured by a recorded deed of Trust and evidenced by a Subordinate Note.
   1. The $20,000 will need to be paid back if the recipient completes a future sale or Refinance. Which is the lesser of the amount of assistance the recipient received or 50% of the home equity amount.
2. Valid on New Construction homes priced $450,000 or below.
3. For First time home buyers (no home ownership for the last 3 years) and a resident of Utah. (Resident of Utah for at least 12 months prior to closing).

Whether legislation is good or not is not something I want to get into. But the goal was to incite more affordable housing.

Who is this loan going to be for?

This is not an investment loan in any way, and primary residence status is expected for the life of the loan. But it could be your ticket into owning your first home. Especially if down payment funds are not plentiful. Just know that if you ever want to rent it out, you will need to refinance into a different loan that does allow rentals, just remember that the amount of assistance you used for the acquisition will become due and need to be paid back to the state. The lesser of the assistance received or 50% equity amount.

As an example. If you used $20,000 in assistance and purchased the home for $450,000. If the appraised value comes in at $480,000, then 50% of your home equity is $15,000, then that is the amount that would be Due to the state. Since the assistance it was part of the acquisition, it can still considered a rate and term refinance. (this is a very rough example of how it works in principle, I know the LTV's and loan types probably wouldn't work with this specific example.)

All in all, this could be a loan to get your foot in the door, which is a step up from renting. But there are other loan programs that would make more sense to pursue first if you can qualify for them.

Today, I wanted to highlight some of the features for the First-Time Homebuyer Assistance Program in Utah. There has been a lot of Buzz about this program and what it does for first time homebuyers and when it is appropriate to use.

Starting from the top…

1. You can use up to $20,000 that can be used for a down payment, closing costs, and/or permanent Interest Rate buydown. Assistance Program loan is a 0% interest, No-Monthly payment loan secured by a recorded deed of Trust and evidenced by a Subordinate Note.
   1. The $20,000 will need to be paid back if the recipient completes a future sale or Refinance. Which is the lesser of the amount of assistance the recipient received or 50% of the home equity amount.
2. Valid on New Construction homes priced $450,000 or below.
3. For First time home buyers (no home ownership for the last 3 years) and a resident of Utah. (Resident of Utah for at least 12 months prior to closing).

Whether legislation is good or not is not something I want to get into. But the goal was to incite more affordable housing.

Who is this loan going to be for?

This is not an investment loan in any way, and primary residence status is expected for the life of the loan. But it could be your ticket into owning your first home. Especially if down payment funds are not plentiful. Just know that if you ever want to rent it out, you will need to refinance into a different loan that does allow rentals, just remember that the amount of assistance you used for the acquisition will become due and need to be paid back to the state. The lesser of the assistance received or 50% equity amount.

As an example. If you used $20,000 in assistance and purchased the home for $450,000. If the appraised value comes in at $480,000, then 50% of your home equity is $15,000, then that is the amount that would be Due to the state. Since the assistance it was part of the acquisition, it can still considered a rate and term refinance. (this is a very rough example of how it works in principle, I know the LTV's and loan types probably wouldn't work with this specific example.)

All in all, this could be a loan to get your foot in the door, which is a step up from renting. But there are other loan programs that would make more sense to pursue first if you can qualify for them.

Today, I wanted to highlight some of the features for the First-Time Homebuyer Assistance Program in Utah. There has been a lot of Buzz about this program and what it does for first time homebuyers and when it is appropriate to use.

Starting from the top…

1.  You can use up to $20,000 that can be used for a down payment, closing costs, and/or permanent Interest Rate buydown.  Assistance Program loan is a 0% interest, No-Monthly payment loan secured by a recorded deed of Trust and evidenced by a Subordinate Note.
   1. The $20,000 will need to be paid back if the recipient completes a future sale or Refinance.  Which is the lesser of the amount of assistance the recipient received or 50% of the home equity amount.
2. Valid on New Construction homes priced $450,000 or below.
3. For First time home buyers (no home ownership for the last 3 years) and a resident of Utah. (Resident of Utah for at least 12 months prior to closing).

Whether legislation is good or not is not something I want to get into.  But the goal was to incite more affordable housing. 

Who is this loan going to be for?

This is not an investment loan in any way, and primary residence status is expected for the life of the loan.  But it could be your ticket into owning your first home.  Especially if down payment funds are not plentiful.  Just know that if you ever want to rent it out, you will need to refinance into a different loan that does allow rentals, just remember that the amount of assistance you used for the acquisition will become due and need to be paid back to the state.  The lesser of the assistance received or 50% equity amount. 

As an example. If you used $20,000 in assistance and purchased the home for $450,000. If the appraised value comes in at $480,000, then 50% of your home equity is $15,000, then that is the amount that would be Due to the state. Since the assistance it was part of the acquisition, it can still considered a rate and term refinance. (this is a very rough example of how it works in principle, I know the LTV's and loan types probably wouldn't work with this specific example.)

All in all, this could be a loan to get your foot in the door, which is a step up from renting.  But there are other loan programs that would make more sense to pursue first if you can qualify for them.

@Adielle Rivera You should be fine to carry out that situation you mentioned.  I know multiple people that have.  I know one investor that recently sold off one of his long term rental investment properties that still had a USDA Direct loan on it.  Which is a subsidized loan that has a recapture payment once the home is sold or refinanced out of a USDA Direct loan.  USDA loans stay in operation and are paid for by the Guaranteed fee that is associated with every loan they issue.  It is a fee that is paid up front, and monthly for the life of the loan.  

With all that being said, USDA like every other loan program out there, can exercise the mortgage acceleration clause if you are not abiding by the terms of the contract.  Will USDA verify that you have been living in the house every year?  No.  Would I do a long term rental on a home with a USDA loan?  Yes, as long as I have fulfilled the 12 month primary residence requirement, I would certainly rent it out.  Would I do an Airbnb on a property with a USDA loan?  Probably not, because in some states would change the tax status of the property to Secondary which could be a red flag for USDA especially if they are the ones you are making the payments to, which is the case with USDA Direct loans. 

Important to know the differences between USDA Direct and USDA Guaranteed loans which are supper easy to look up.  Difference between USDA Direct loans and USDA Guaranteed

James you are correct on the investment property tax exemption.  Basically the state wants to see that it is a long term residence for someone, whether that is you or the tenant; Before they issue the primary residence tax status.  Second homes and properties with short term rentals do not enjoy the same tax break.  

Good luck jumping through those hoops Jamie!    

I think that the only way to get that done is by doing a power of attorney.  

As for the mortgage rates, the federal reserve has an influence on short term loan interests rates and loans with maturities that are less than one year, but do not have the same influence over mortgage rates.  That does not mean that the fed rate cut wont do anything to mortgage rates.  But it is anybody's guess on which way the rates will go.  Right now they are trending up.  

Lock extensions are pretty expensive, and every lending institution handles those lock extensions differently.  In this case, it looks like the lender does not allow for them.