Tag Archives: freddie mac

phx-skyline

Seeing green: Bank roles shift in real estate market

Phoenix is a city of extremes, but lenders will see some balance in the market this year. There’s more capital flowing through the system than there was a year ago and, despite a slow recovery, Phoenix investors should find it easier to get loans in the market.

James DuMars, NorthMarq Capital

James DuMars, NorthMarq Capital

“This is an exceptional time to acquire financing for real estate,” says James DuMars, managing director of NorthMarq Capital. “The majority of lenders are planning to place more than they did in 2013 and offering competitive interest rates and terms. The properties look good as income trends are up over the past couple of years as are occupancy rates. The lenders still perceive upside to many of these projects because rental rates are still below where they were at the top of the cycle. It will be a busy year.”

NorthMarq is one of the largest privately held commercial mortgage banking companies in America and represents many life insurance companies. Recent policy changes have changed how life insurance companies reserve commercial loans, which DuMars says lowers reserves set aside for each loan.

“This means real estate loans will be more attractive going forward and more profitable,” he says.

Jim Pierson, principal at Legacy Capital Advisors, recently financed a deal in less than a month’s time — an acquisition deal that would typically take 45 to 60 days to complete. What made the deal even more interesting, he says, is it was for a value-add property that was less than 50 percent leased. Finding a non-recourse loan like that would have been unavailable a year ago, he adds.

Jim Pierson, Legacy Capital Advisors

Jim Pierson, Legacy Capital Advisors

“Phoenix has higher highs and lower lows than most places … The capital markets are virtually back in full swing,” says Pierson. “Lenders are originating loans in the 75 percent loan-to-value (LTV) range for commercial projects and 80 percent LTV for multi-family. During the boom, you could get a 10-year interest-only (IO) loan. Interest-only loan periods went away in 2009, but have come back into the picture. Borrowers can get a five-year IO loan at full leverage and full term IO for lower leverage deals.”

Pierson says his clients are actively purchasing real estate with longer term interest rates due to the sense “that rates cannot stay this low for too much longer.”

“From the lender’s perspective, the Phoenix MSA is a great place to lend money again,” says DuMars. “Lots of transactions are getting done. The perception of the lending community is that we are on the upswing in the cycle. We have positive job creation, a healthy housing market (with new construction), positive net in-migration and a lower unemployment rate than the national average.”

David Lodwick, Alliance Residential

David Lodwick, Alliance Residential

Alliance Residential CFO David Lodwick says several debt and equity companies that have previously focused on larger coastal markets are coming to Phoenix.

“Financing has become more institutional in nature as Phoenix has established a stronger national brand,” Lodwick says. “There is a significant demand for high-quality apartments, and it has been ideal to be involved in financing such a strong investment sector.”

Multi-family has dominated the commercial real estate market at $2B in sales in Phoenix, making it attractive to lenders. This continues to be the case. Multi-family has seen the most active financing in new construction financing and acquisition/refinances, Pierson says, adding that the next most active sectors are retail, office and industrial.

“We compete with all asset classes for capital and are seeing that competition increase as the market recovers,” Lodwick says. “The past few years of recovery was largely focused on multi-family, which has been great, but it is also great to see other commercial asset classes rebounding, as the related job growth is a strong driver for multifamily demand.”

Office vacancy dropped from 19.5 to 18.9 percent in the 1Q and home ownership is down to 65 percent, which has pushed people into multi-family living situations. Jones Lang LaSalle Vice President of multi-family sales and leasing Charles Steele adds that Fannie Mae and Freddie Mac have started to diminish loans put into the multi-family space by 10 percent every year.

“Significant policy changes have created additional guidelines and regulations that impact construction lenders, and have increased reporting requirements,” says Lodwick.

“With great partners, we are always able to work through these changes, but it has clearly changed the perspective of lenders. The policy changes will make it tougher for sponsors who do not have a strong track record and history to obtain construction debt. In addition, the permanent financing market — which provides much of the liquidity for the multifamily asset class through government-sponsored entities such as Fannie Mae and Freddie Mac — has been subject to much discussion on housing reform. We believe the success realized by the GSE’s multifamily finance capital will provide for future expansion.”

Joe Bleyle, Enterprise Bank & Trust

Joe Bleyle, Enterprise Bank & Trust

The industry is seeing the strongest improvement in industrial and hospitality markets. Well-located, anchored retail is slowly improving, says Joe Bleyle, senior vice president of Enterprise Bank & Trust.

“After enduring a number of false starts, most of our clients are cautiously optimistic that the commercial market is recovering,” Bleyle says. “While the rebound in residential prices has certainly been a positive dynamic for the Phoenix economy, commercial developers and investors want to see that translate into stronger permit numbers and job creation.”

Job creation, Bleyle adds, will improve office vacancy in particular.

“Lender appetite is strong for multi-family and industrial projects right now and nearly any commercial building that is owner-occupied by a stable company,” Bleyle says. “Financing is fairly difficult to obtain for investor office and almost non-existent for land.”

DuMars says lending is even across the board.

“With  the full return of the CMBS market we are very busy financing retail shopping centers that were held on the sidelines by the borrowers up until now,” he says. “Many owners have decided to refinance instead of sell now that they have the ability to pay off their maturing loans.”

“We’re starting to see investor interest in more traditional suburban projects in the southeast Valley,” adds Lodwick.

This interest is garnered by the high-wage jobs announced this year — from the Apple manufacturing facility to the Intel expansion.

“You’ve seen some of the capital partners recognize that and desire to be there to take part in that cycle,” he adds.

Recent policy changes within the CMBS and life insurance industry will make it easier for both lenders to be more active in 2014, DuMars said. Life companies, for example, may see the amount of reserves they held for real estate loans cut in half.

“Real estate debt is a preferred asset class by life insurance companies and institutional investors,” says DuMars. “Fear about pending maturities between 2015 and 2017 causing defaults has greatly abated.”

Brandon Harrington, Walker and Dunlop

Brandon Harrington, Walker & Dunlop

Rates are going to stay low in 2014 as CMBS becomes more aggressive and more banks are willing to lend, predicts Walker & Dunlop’s Brandon Harrington.

“I think 2014 is going to be a great year for borrowers — at least for the first quarter, potentially lower refinances and more deals,” he says.

Though life companies and CMBS can expect a better year in 2014, their struggles have changed the climate for bank financing.

The low cost of funds and weak demand for construction and bridge loans has made the industry more competitive among banks for term loans, says Bleyle.

“During the Great Recession, in 2009 and 2010, there was so little money out there that real estate in our space could be bought very attractively,” says STORE Capital CEO Chris Volk, who owns $2B in real estate and rents to 160 companies in 43 states. “In the wake of the Great Recession, there’s a gravitation to tenant quality. There’s a lot of activity that goes on in that space. In our spaces, the individual dollars, we gravitate toward smaller properties.”

“There’s a lot of capital, it’s just a matter of finding good deals to invest in,” says Harrington.

Brookwood Apartment Homes in Tucson, Ariz.

Walker & Dunlop finances $107M in Arizona properties

Walker & Dunlop, Inc. announced that it recently provided $107,130,323 for multifamily properties in Arizona.

Brandon Harrington and Matt Steffen led the team that structured the $5.1M loan for Casa Maribela, a 191-unit fractured condominium building in Phoenix. The W&D team structured and closed the 5-year non-recourse CMBS loan 30 days after receiving the signed application from the borrower. The team also recently closed a 30-year fixed-rate fully amortizing Fannie Mae loan for The Meadows, a 165-unit multifamily property in Phoenix.

Harrington, Steffen and Jeff Burns led the team that provided the $8.256M Fannie Mae acquisition loan for Brookwood Apartment Homes, located in Tucson. Although Tucson is a Fannie Mae pre-review market, limiting loan to cost and DSCR, Walker & Dunlop was able to structure the loan at 72.25 percent loan to cost with one-year interest.

Will Baker and his team recently structured $34.954M through Freddie Mac’s Targeted Affordable Housing CME Program for 11 properties (1,211 units) located in Chandler, Phoenix, Surprise, Mesa and Prescott. The complex transactions required numerous approvals from separate municipalities for first-time GSE borrower, Atlantic Development. Walker & Dunlop structured the loans, originated by Capital Advisors Executive Vice President Shippen Browne, with 10-year terms for the properties, all originally built with Low Income Housing Tax Credits with varying levels of rent and income restrictions.

Crestone 2, CBRE, WEB

Shadow Mountain apartments sell for $27.2M

CBRE’s Capital Markets group announced today that it has secured financing on behalf of Real Estate Capital Partners (“RECP”) for the financing of Crestone at Shadow Mountain Apartments (“Crestone”). Brian Eisendrath with CBRE’s Debt and Structured Finance team arranged a 5-year, full term interest only fixed rate loan of $16,811,000 (60% LTC), which was locked in at an interest rate of 3.30% through Freddie Mac. The 248-unit asset was acquired for $27.2> ($109,677/unit) from Scottsdale-based P.B. Bell, who will remain in-place as the property’s management company, and was represented by Tyler Anderson and Sean Cunningham with CBRE in Phoenix.

RECP’s Current Income Fund (the “Fund”) provided the equity for Crestone, which will provide investors a strong current rate of return in a high quality, well located project. RECP is a U.S. real estate investment advisor, founded in 1989, whose goal is to create superior risk adjusted returns by investing in U.S. real estate. Investments have consisted of existing and to-be-built apartment, office, industrial, retail and mixed-use properties.

With the low cost of capital and the full term interest only loan, this execution will allow RECP to execute its business plan,” said Mr. Eisendrath.

Brian and his team were able to secure attractive financing at a 3.30% rate with full term interest only. The execution supports our business plan to maximize cash on cash returns,” said Stephen Henry, Vice President – Investment Management of REC.

Crestone at Shadow Mountain is a well-established community situated in the heart of North Phoenix. This community was built in 1992 and features 248 units, averaging 876 square feet, in 19 two-story buildings. The Property offers proximity to the SR 51 connecting residents to the Loop 101 through North Scottsdale as well as to all the amenities in Downtown Phoenix. Select units offer nine-foot ceilings, full size washers and dryers, and wood burning fireplaces.

housing.prices

Bill aims to create new housing-loan structure

The top Democrat on the U.S. House Financial Services Committee on Thursday introduced a draft proposal to abolish Fannie Mae and Freddie Mac and create a new lender-owned cooperative that would issue government-backed loans.

Representative Maxine Waters of California outlined a measure that challenges the more conservative approach of the panel’s chairman. Texas Republican Jeb Hensarling’s proposal would sharply reduce the government’s role in housing finance.

The counterproposal is unlikely to gain broad support in the Republican-led House.

“Fannie Mae and Freddie Mac’s return to profitability and repayment of taxpayer dollars has led some to rightly speculate whether (they) need any reform at all,” Waters said in a statement. “I am hopeful that this legislation will continue to move the conversation on housing finance reform forward.”

The House bill maintains a clear government role is needed to sustain the popular 30-year, fixed-rate mortgage. The framework takes a similar approach to bipartisan measures already introduced in the Senate.

The most significant piece of housing finance legislation was introduced earlier this month by the Democratic chairman of the Senate Banking Committee, Tim Johnson, and the panel’s top Republican, Mike Crapo.

Fannie Mae and Freddie Mac, the two leading sources of U.S. mortgage funds, were seized by the government during the financial crisis in 2008 and propped up with $187.5 billion in taxpayer funds to keep them solvent.

By the end of March the companies will have sent the Treasury $202.9 billion in dividends.

Fannie and Freddie ensure the mortgage market stays liquid by buying loans from lenders and repackaging them as securities that they sell to investors with a guarantee.

The House plan written by Waters includes a government guarantee for home loans and creates a lender-owned cooperative that will issue mortgage-backed securities eligible to receive federal insurance. This structure would replace Fannie and Freddie, which would be liquidated over a five-year period.

It creates an explicit government guarantee, paid for by the industry and used to capitalize an insurance fund that is tapped in times of financial crisis.

The plan also would give small banks direct access to the financing for their home loans and ensure they are not shut out by larger competitors. It provides sources of funding for affordable housing.

With midterm elections approaching in November, House and Senate lawmakers are expected to turn to the campaign trail within a few months, leaving little time to deal with the complex issue of revamping the U.S. housing finance system.

Clocktower, NorthMarq

NorthMarq Funds $16.64M Acquisition Financing for Clocktower Apartments

Luke Donahue, senior vice president/senior director and John Kinser, vice president of NorthMarq’s Phoenix regional office provided acquisition financing of $16.64M for Clocktower Apartments, a 195-unit multi-family apartment complex located 11600 SW 147th Terrace in Beaverton, Ore. NorthMarq Capital funded this financing for the borrower through its FHLMC seller/servicer platform.
“NorthMarq financed the adjacent property with Freddie Mac 12 months earlier,” said Kinser. “To accommodate the joining of the two properties, NorthMarq and Freddie Mac worked with the borrower to allow the joint operation and branding of both properties.”

 

green-house

Getting to know 'Green Mortgages'

The Energy Efficient Mortgage (EEM) is a relatively new home financing option that nearly every home buyer can take advantage of. Thousands of home buyers across the U.S. are recognizing the benefits that this new mortgage option provides. Recognizing the obvious benefits of having an energy efficient home, more and more home buyers are utilizing this unique financing tool in order to increase their home’s energy efficiency and lower their electric bills.

How Does an EEM Work?

An Energy Efficient Mortgage allows home buyers to qualify for larger home mortgage loans than they would have been qualified for otherwise. EEM’s provide home buyers with excess funds to install energy efficient upgrades to their new home, thus making their homes more environmentally friendly and reducing their energy bills. Getting an EEM is a terrific way for home buyers to save money month after month while doing their part to decrease their impact on the environment at the same time.

Different Kinds of EEM

There are different kinds of EEM’s to choose from and securing one is easier than many home buyers might believe. Known as “green” mortgages, most mortgage lenders offer three different types of EEM’s:

  • Conventional EEM: Most lenders who sell their loans to either Fannie Mae or Freddie Mac offer conventional EEM’s to new home buyers. This type of EEM allows homebuyers to borrow the appraised value of their home plus an additional 15% in order to make energy efficient home improvements.
  • FHA EEM: A Federal Housing Administration EEM allows home buyers to borrow the appraised value of their home plus at least an additional $4,000-$8,000 or 5% of their home’s appraisal value, whichever amount is less. This type of EEM may provide a lower mortgage than a conventional EEM, but it gives home buyers access to the FHA’s wide range of financing options.
  • VA EEM: A Veteran’s Association EEM is very similar to an FHA EEM, but only past and present military personnel may take advantage of this particular mortgage option. Unlike an FHA EEM, a VA EEM grants a fixed amount of $6,000 regardless of the home’s appraisal value.

What Does an EEM Pay For?

The additional money from an EEM is intended to be used only for energy saving improvements. Most homes lose their energy efficiency through improper insulation and cracks that allow hot or cold air to penetrate the home. Therefore, the additional funds received from an EEM usually go towards air sealing and insulation improvements.

In some instances, roof or chimney repairs, energy efficient windows, and new air conditioning systems can be covered by an EEM. In other cases, energy generation equipment, such as solar panels, can be added with EEM funds. However, these improvements usually cost more than the additional funds included in an EEM. Unfortunately, in most cases homebuyers cannot use the money from an EEM to choose what improvements they would like to undertake. All improvements made using an EEM must be suggested by the inspector in their HERS report.

Qualifying For a Green Mortgage

Most mortgage lenders work with secondary mortgage markets and insured programs like Fannie Mae and the FHA in order to provide EEM’s for their clients. Most EEM’s will differ from lender to lender, therefore prospective home buyers should talk to many lenders in order to find the EEM that is best for them. Qualifying for an EEM is simple and rarely a concern. Most homebuyers who qualify for a traditional mortgage qualify for an EEM as well. The only requirement needed to include an EEM with the traditional mortgage is making sure the improvements are cost effective. For example, if new energy efficient windows will cost $5,000 to install, then the energy savings from the new windows must be projected to at least equal the $5,000 it cost to install the windows.

This is where the HERS report becomes significant. For homebuyers of existing homes to qualify for an EEM, the energy-saving improvements must be verified by the HERS report. The report includes the current state of the home’s insulation, windows, and appliances, as well as the area’s climate and utility rates. It then details recommended improvements, the cost of the improvements, and the annual savings as a result of having the improvements done. Finally, the HERS report must state that having the improvements done will save the homebuyers money on their utility bills.

Surprisingly, buyers of new construction homes can also qualify for an EEM. The only requirement for buyers of newly constructed homes to enjoy the added benefit of an EEM is to have the builder certify that the home meets energy efficiency guidelines.

Energy Efficient Mortgages provide any home buyer the ability to have access to additional funds for making cost-saving improvements to their new home. Rather than having to use their savings, credit cards, or non-traditional funding with high interest rates, home buyers can have access to additional funds at the same low interest rate of a mortgage and make a single mortgage payment each month. With so many benefits and no apparent downside, it is not surprising that more and more home buyers are taking advantage of this wonderful opportunity.

 

Brentt Taylor writes for Mortgage Loan, which is established year 1995 and owned by Mortgageloan Directories and Information LLC. The site provides information, tools and up-to-date news about mortgage and financial-related matters. The site aims to empower consumers create smart and better financial decision for themselves and for their families. MortgageLoan has written a complete guide about Green Mortgages, for more information visit their site.

green-house

Getting to know ‘Green Mortgages’

The Energy Efficient Mortgage (EEM) is a relatively new home financing option that nearly every home buyer can take advantage of. Thousands of home buyers across the U.S. are recognizing the benefits that this new mortgage option provides. Recognizing the obvious benefits of having an energy efficient home, more and more home buyers are utilizing this unique financing tool in order to increase their home’s energy efficiency and lower their electric bills.

How Does an EEM Work?

An Energy Efficient Mortgage allows home buyers to qualify for larger home mortgage loans than they would have been qualified for otherwise. EEM’s provide home buyers with excess funds to install energy efficient upgrades to their new home, thus making their homes more environmentally friendly and reducing their energy bills. Getting an EEM is a terrific way for home buyers to save money month after month while doing their part to decrease their impact on the environment at the same time.

Different Kinds of EEM

There are different kinds of EEM’s to choose from and securing one is easier than many home buyers might believe. Known as “green” mortgages, most mortgage lenders offer three different types of EEM’s:

  • Conventional EEM: Most lenders who sell their loans to either Fannie Mae or Freddie Mac offer conventional EEM’s to new home buyers. This type of EEM allows homebuyers to borrow the appraised value of their home plus an additional 15% in order to make energy efficient home improvements.
  • FHA EEM: A Federal Housing Administration EEM allows home buyers to borrow the appraised value of their home plus at least an additional $4,000-$8,000 or 5% of their home’s appraisal value, whichever amount is less. This type of EEM may provide a lower mortgage than a conventional EEM, but it gives home buyers access to the FHA’s wide range of financing options.
  • VA EEM: A Veteran’s Association EEM is very similar to an FHA EEM, but only past and present military personnel may take advantage of this particular mortgage option. Unlike an FHA EEM, a VA EEM grants a fixed amount of $6,000 regardless of the home’s appraisal value.

What Does an EEM Pay For?

The additional money from an EEM is intended to be used only for energy saving improvements. Most homes lose their energy efficiency through improper insulation and cracks that allow hot or cold air to penetrate the home. Therefore, the additional funds received from an EEM usually go towards air sealing and insulation improvements.

In some instances, roof or chimney repairs, energy efficient windows, and new air conditioning systems can be covered by an EEM. In other cases, energy generation equipment, such as solar panels, can be added with EEM funds. However, these improvements usually cost more than the additional funds included in an EEM. Unfortunately, in most cases homebuyers cannot use the money from an EEM to choose what improvements they would like to undertake. All improvements made using an EEM must be suggested by the inspector in their HERS report.

Qualifying For a Green Mortgage

Most mortgage lenders work with secondary mortgage markets and insured programs like Fannie Mae and the FHA in order to provide EEM’s for their clients. Most EEM’s will differ from lender to lender, therefore prospective home buyers should talk to many lenders in order to find the EEM that is best for them. Qualifying for an EEM is simple and rarely a concern. Most homebuyers who qualify for a traditional mortgage qualify for an EEM as well. The only requirement needed to include an EEM with the traditional mortgage is making sure the improvements are cost effective. For example, if new energy efficient windows will cost $5,000 to install, then the energy savings from the new windows must be projected to at least equal the $5,000 it cost to install the windows.

This is where the HERS report becomes significant. For homebuyers of existing homes to qualify for an EEM, the energy-saving improvements must be verified by the HERS report. The report includes the current state of the home’s insulation, windows, and appliances, as well as the area’s climate and utility rates. It then details recommended improvements, the cost of the improvements, and the annual savings as a result of having the improvements done. Finally, the HERS report must state that having the improvements done will save the homebuyers money on their utility bills.

Surprisingly, buyers of new construction homes can also qualify for an EEM. The only requirement for buyers of newly constructed homes to enjoy the added benefit of an EEM is to have the builder certify that the home meets energy efficiency guidelines.

Energy Efficient Mortgages provide any home buyer the ability to have access to additional funds for making cost-saving improvements to their new home. Rather than having to use their savings, credit cards, or non-traditional funding with high interest rates, home buyers can have access to additional funds at the same low interest rate of a mortgage and make a single mortgage payment each month. With so many benefits and no apparent downside, it is not surprising that more and more home buyers are taking advantage of this wonderful opportunity.

 

Brentt Taylor writes for Mortgage Loan, which is established year 1995 and owned by Mortgageloan Directories and Information LLC. The site provides information, tools and up-to-date news about mortgage and financial-related matters. The site aims to empower consumers create smart and better financial decision for themselves and for their families. MortgageLoan has written a complete guide about Green Mortgages, for more information visit their site.

homebuyers - Arizona Business Magazine May/June 2012

Homebuyers Bounce Back

The rules have changed a bit, but it’s still a perfect time to purchase a home.

If you have good credit and a good job history and can put money down for a house, it’s a great time to buy, say experts in real estate and finance. In fact, the sooner the better, because it may soon turn into a seller’s market for housing.

And mortgage rates could be climbing as well. Mortgage buyer Freddie Mac recently announced that the average rate on 30-year loans had jumped to the 4 percent level for the first time in three months.

According to attorney Kevin Nelson of Tiffany & Bosco, whose practice focuses on mortgage and real estate, homebuyers can get very attractive packages if they have the solid down payments and credit. “Homeowners can also refinance if they have substantial value in their homes. But lenders are still very cautious about permitting homeowners to have lines of credit,” Nelson says. “And they probably still will be until the financial problems in Europe and unrest in the Middle East calm down.”

Both larger banks and mortgage companies say business is very good. “In the past 10 years, we have never done as many loans per month as we are doing right now,” says Tim Disbrow, regional sales manager for Wells Fargo Bank. “We are the No. 1 lender by a longshot for all mortgages across the state, including Fannie and Freddie and FHA.”

Although some in the lending industry say big banks are moving very slowly in making home loans and can’t keep up with the volume, Disbrow disputed that. “Consumers who go to banks for mortgages are just being asked to document their savings, job history and salaries, something that they weren’t asked to do in the boom years,” he says.

The same rules apply with all lenders now, he says, whether they are banks or mortgage companies. Customers everywhere have to meet the same requirements based on Fannie and Freddie guidelines.

For conventional conforming mortgages of $417,000 or less that are insured by Fannie Mae and Freddie Mac, down payments must be 5 percent or more. Down payments for FHA loans are 3.5 percent. Jumbo loans also seem to be widely available, but lenders generally do not sell them to Fannie Mae and Freddie.

“The big difference between us and mortgage companies is that customers may have to pay other loan originators more in fees,” Disbrow says.

Foreigners are helping fuel the rising demand for homes in the Phoenix area, but plenty of Americans are buying as well. Canada, New Zealand and Australia are well represented. Many foreign buyers pay cash, but some mortgage companies offer loan programs for them. Buyers are often investors attracted to the housing market by low home prices and the potential for high rents.

Eric Bowlby, president of AmeriFirst Financial in Mesa, estimated that about 40 percent of the homebuyers in Maricopa County are cash buyers, while 60 percent get mortgages.

Surprisingly, even those who lost their homes in a foreclosure or short sale can finance homes with mortgages, but they must put down fairly substantial down payments. They can even get an FHA-insured loan from three to five years after losing their previous home.

But to get a Fannie Mae-backed mortgage or one from Freddie Mac, someone who had a foreclosure has to wait from five to seven years. However, if a buyer can verify that some hardship led him or her to walk away from their property – like the loss of a job or an illness – they may get relief from the time requirements.

According to Bowlby, even if someone was upside down in their mortgage and walked away, AmeriFirst has a hard money hedge fund that will finance mortgages almost immediately for those who have the income to qualify and make a 25 percent down payment.

“Even those who are one day out of foreclosure or bankruptcy may be able to qualify,” he says, “but the interest rate is 12 percent.

The rate may be high, he says, but it’s still cheaper to buy than to rent because of the homeowner’s tax deduction and the current increases in rental rates.

ATTRACTING BUYERS

Recently, Wells Fargo announced that it is bringing a new pilot program to Phoenix in an effort to help stabilize housing markets.

The Neighborhood LIFT program, already available in Atlanta and Los Angeles, is designed to help communities attract qualified prospective homebuyers to neighborhoods that are struggling with high inventories of unsold homes.

In Phoenix, the bank has a five-year goal of making $3 billion in such loans. Prospective homebuyers can qualify for down payment assistance grants of up to $15,000, covering home and renovation financing and will also participate in home buyer seminars and tours of properties for sale. There are limits on the amount of income families can have and limits on the size of loans.

Arizona Business Magazine May/June 2012