According to Elizabeth Razzi at the Washington Post, this fall is THE time to buy especially if you're a first timer. That's exciting news for buyers, especially in these confusing times.
With the take over of Fannie Mae and Freddie Mac, you might be reluctant to throw your hat into the ring. What does that mean exactly? Nobody is sure how the government take over will effect buyers in the near future but we do know a few things:
Earlier this year, the FHA (Federal Housing Authority) boosted it's loan limits to $729,750 in expensive areas. Before this boost, FHA loan limits started at $419,000. There's a big difference between those two numbers! On Jan. 1, the loan limit drops to $625,500.
Due to the current lending market (discussed in a previous post), 10% down is now the rule of thumb for any conventional loan. But there's also the option of the FHA loan. The FHA loan allows you to put down only 3%, which is a godsend in DC where prices for a studio often start at $185,000 in desirable NW neighborhoods. But Oct. 1, the FHA raises their down payment requirement to 3.5%.
Two other things to consider as you start your home search: the expiration of the new $7500 tax credit on June 30, 2009 and the $5000 first time home buyers credit in DC. You can only take one. If your adjusted gross income is $90,000 for a single person or $130,000 for couples, take the DC tax credit! You don't have to pay it back like the new $7500 tax credit.
The inventory of homes, condos, and coops is still high in DC so take advantage! Good luck in your search!
To read Elizabeth Razzi's article, click below: