Energy Efficient Mortgages and Energy Improvement Mortgages

WASHINGTON – Jan. 31, 2012 – If a home is energy efficient and conserves energy, the monthly utility bills won’t be as high. And if the bills aren’t as high, a buyer can afford to pay more each month on the mortgage.

That’s the theory behind Energy Efficient Mortgages (EEMs). EEMs allow borrowers to qualify for a larger loan and a better, more energy-efficient home.

EEMs are typically used to purchase a new home that is already energy efficient, such as an ENERGY STAR qualified home. However, the term EEM refers to all types of energy mortgages, including Energy Improvement Mortgages (EIMs), which can be used to purchase an existing home that the buyer plans to improve with energy efficient upgrades. EIMs allow borrowers to roll the cost of the upgrades into the mortgage without increasing the downpayment.

Both EEMs and EIMs typically require that a home energy rating – an estimate of monthly energy savings – be given to the lender before the loan can be approved.

Conventional Energy Efficient Mortgages

Lenders who sell loans to Fannie Mae and Freddie Mac can offer conventional EEMs. Conventional EEMs increase the borrower’s income by a dollar amount equal to the estimated energy savings. The Fannie Mae loan also adjusts the value of the home to reflect the value of the energy efficiency measures. For more information about Fannie Mae’s EEM you can call 1-800-7FANNIE (732-6643).

FHA Energy Efficient Mortgages

The mortgage loan amount for an FHA EEM can be increased by the cost of effective energy improvements. The maximum amount of the portion of the EEM for energy efficient improvements is the lesser of 5 percent of the value of the property, or 115 percent of the median area price of a single family dwelling, or 150 percent of the conforming Freddie Mac limit.

For more information on FHA EEM loans, visit HUD.gov. Additional information is available from HUD’s Office of Single Family Housing by calling (800) 569-4287.

VA Energy Efficient Mortgages

The Veteran’s Administration (VA) EEM is available to qualified military personnel, reservists and veterans, and caps energy improvements at $3,000 – $6,000. Borrowers should ask their lender about a VA EEM at the beginning of the lending process. More information about VA EEMs can be obtained from the website for the U.S. Department of Veteran’s Affairs or by calling (800) 827-1000.

Experience, Education, or Both?

Education, Experience, or Both?

by Ken H. Johnson on October 10, 2011 · 0 comments

in Uncategorized

Today, we are again honored to have Ken H. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research as our guest blogger. To view other research from FIU, visit http://realestate.fiu.edu/. - The KCM Crew

The Research

What role does education play in producing a successful real estate agent? This question has been debated for years. However, there has been very little scientific investigation to this point into the role of education and its influence on success in the industry. Anderson, Johnson and Jordan[1] are presently investigating this link, and though the results are preliminary, their findings strongly suggest that having an undergraduate college degree increases the likelihood of an agent being successful between 40% and 160%.

In its most basic form, the research’s statistical model defines success as an agent that produces more closed volume than 50% of all other brokers. The role of a college degree increases even more dramatically, when success is defined as an agent that produces more closed volume than all but 5% of all other brokers.

Implications for Practice

The result from Anderson, Johnson and Jordan clearly indicates that having an undergraduate college degree goes a long way towards creating a successful agent. The role of education, however, does not rule out or substitute for experience. From a personal perspective, experience wins out over education when the two are pitted against one another. On the other hand, combining experience with education produces the most capable agent — an agent who brings both their wealth of experience and the analytical ability to deal with new issues as they arise in the selling process.

Today, agents no longer have to choose between experience and education. There are now a number of alternatives ranging from local colleges and universities that offer real estate programs and degrees to Realtor® University, which is presently developing a real estate curriculum, among other alternatives. As a testimonial, I most strongly recommend higher education. While still in full-time practice, I obtained an M.B.A. (concentrating in Finance). After I graduated, my business volume jumped dramatically and a world of additional opportunities opened up for me.

The Evolution of Belief in the FSBO -Simple Irony or Intergalactic Epiphany? You Decide

We all remember the ads for the "For Sale By Owner" website.. Why pay a Realtor a commission for doing what you can do yourself so easily?

Well, the founder of For Sale By Owner didn't exactly walk the walk, did he?  In fact, he ignored his own hype and hired a Realtor!

A picture is worth a 1,000 words....

In Real Estate, The Media Is A Lagging Indicator

As the saying goes,"If you get a great stock tip from the newspaper, TV, or radio, it's already too late." In financial matters, journalism is an outlet for historians. In fact, reporters can be regarded as the accountants of recent events when it comes to the markets. They give us an account of what has already taken place. Stocks, bonds, commodities and all other investment vehicles are far too dynamic for their fluctuations to be captured in real time by the press.

The same rule can be applied to real estate. While real estate is a slower moving commodity than other financial vehicles, the media is only able to report and interpret data findings that have been reported in months prior, and is therefore a historical reference source. This is not purely their fault; it takes time to compile, extrapolate and record real estate performance. By virtue of this time lapse, however, the media is simply ill equipped to accurately report what is going on at the moment in a specific market.

Moreover, the media tends to report real estate activity in very broad terms, providing national, regional, or state statistics with respect to growth, contraction, or new developments. Real estate is a localized industry and varies greatly from community to community. Just take a short drive through your own area, and in a brief period of time, you will see a variety of homes in varying price ranges with different landscapes, school districts, demographics, business communities, etc. Therefore, any attempt to capture developments or forecast trends on a broader scale by reporting national, regional or state based findings fails to give an accurate account of the market condition of a specific location or community. People live, work and play in specific communities, not in general geographical designations. As a result, the media is not only a lagging indicator, but many times misses the mark completely when it comes to providing useful information to guide their readers on the decision whether to buy or sell their homes or relocate to another community (market).

Also, there is a social dimension to real estate that distinguishes it from all other commodities. Homes and businesses are not pieces of paper that can be traded without having a profound effect on the quality of of our lives. Besides the financial considerations, real estate is where we live and play, work and rest, raise our families, make friends, worship and shape our own lives and the lives of those whom we love. We belong to communities, and those around us affect who we are. Where we live directly affects us as individuals, and the media can not even begin to grasp the nuances and particulars that this entails.

Enter the professional Realtor. As a Realtor, I am the first to admit that every local market is different. No self-respecting real estate professional can claim to be an expert in every market. We specialize in communities, and our business is about people. The only way to develop expertise in a given community is to be a part of it. In addition to having an extensive awareness of the recent sales activity, homes currently available, mortgage interest rates and other hard analytical data (all critical to the decision making process), a dedicated professional in our field must also tap into the social makeup of a community by understanding the wants and needs of the client and what the community has to offer in order to fulfill them.

Miami is known the world over. From the famous beaches and electric nightlife of South Beach to the lush backdrop and bohemian eclecticism of Coconut Grove, no other city in America offers the excitement and cultural diversity of our great city. Miami is now home to the third largest skyline in the US (behind New York and Chicago-and frankly, we have better weather). Whether you are looking for a stately Coral Gables Old Spanish residence, a majestic Pinecrest estate, a home on the water to fulfill your need for tropical breezes, or a waterfront condo to get away on South Beach, Miami offers something for everyone.

Don't be misled by media reports of gloom and doom (according to the NAR, Miami sales of single family homes surged 72% higher in May 2009 over the same month last year, and condo sales rose 51%-I guess not everyone is reading the papers!). If your thing is tracking economic activity at the macro level, the media is a great source. If, however, you're looking to buy or sell real estate in Miami. ask a Realtor.