Keller Williams Realty At The Beach participated in the Milford Halloween Parade, October 2009.

Those pictured (from left to right) Alex Rivera, Dee Hake DeMolen, May Shanaphy, Stephanie Johnson, Kimberly Rivera, Tabatha Moore and daughter Gabrielle, Dianne Richardson, John Purnell and John Shanaphy.  In the back (from left to right) Doreen Lucas, Carol Giampietro, Rich Flaim and Matthew Harvath.

Below are the guidelines for repairs and inspections if you are buying or selling a home and the loan is being funded through FHA.  Directly from the U.S. Department of Housing and Urban Development dated December 19, 2005.

MORTGAGEE LETTER 2005- ML-48

TO:                  ALL APPROVED MORTGAGEES

                        ALL APPROVED APPRAISERS

  SUBJECT:       FHA Repair and Inspection Requirements for existing properties and revisions to FHA Appraisal Protocol   

In September 2005, the Federal Housing Administration (FHA) issued Mortgagee Letter 2005-34, which announced the adoption of four of Fannie Mae’s revised appraisal reporting forms as well as the release of Revised Appendix D of Handbook 4150.2, CHG-1.  This Mortgagee Letter provides additional guidance regarding FHA’s repair and inspection requirements for existing properties and the use of the Fannie Mae appraisal reporting forms.  All appraisal guidance for new construction that serves as security for FHA-insured mortgages remains unchanged beyond the clarification in the Revised Appendix D that the appraiser may appraise a home that is under construction and that is 90% or more complete without benefit of plans and specifications.

In a continuing effort to reform and standardize its appraisal requirements, FHA has shifted from its historical emphasis on the repair of minor property deficiencies and now only requires repairs for those property conditions that rise above the level of cosmetic defects, minor defects or normal wear and tear.  FHA Roster Appraisers are reminded to report all readily observable property deficiencies, as well as any adverse conditions discovered performing the research involved in completing the appraisal, within the appraisal reporting form.  Lenders should use professional judgment and rely upon prudent underwriting practices in determining when a property condition poses a threat to the safety of an occupant and/or jeopardizes the soundness and structural integrity of the property, such that additional inspections and/or repairs are necessary. 

Revisions to the appraisal reporting guidance contained in Chapters 2 and 3 of Handbook 4150.2, CHG-1 are limited to those described in this Mortgagee Letter and Mortgagee Letter 2005-34 and Revised Appendix D. The specific areas of guidance that are rescinded by this Mortgagee Letter are delineated below.  FHA intends to retire and replace Handbook 4150.2, CHG-1 in the near future.

 Repair Requirements 

As stated in Revised Appendix D, FHA now permits an “as-is” appraisal for existing properties that serve as security for FHA-insured mortgages when minor property deficiencies, which generally result from deferred maintenance and  normal wear and tear, do not affect the safety of the occupants or the security and soundness of the property.  FHA no longer requires repairs for these types of minor cosmetic deficiencies to bring a property into compliance with FHA Minimum Property Requirements.  Specifically, the guidance provided in Handbook 4150.2, CHG-1, Chapter 3, Paragraph 3-6, A-7 referencing all-weather road surfaces; Paragraph 3-6, A-8 referencing poor workmanship; Paragraph 3-6, A-11 referencing debris and trash in crawl space; Paragraph 3-6, A-16 referencing steps without a handrail; Paragraph 3-6, C referencing bare floors, badly soiled carpeting and cracked plaster and sheetrock is no longer applicable.   Additionally, the guidance provided in Handbook 4905.1, REV-1, Chapter 2, Paragraph 2-7, A-2 referencing all weather road surfaces; Paragraph 2-8 referencing poor workmanship and Paragraph 2-14, C referencing crawl spaces with debris and trash is no longer applicable.  Any reference to the Valuation Condition form (form HUD-92564-VC) and protocol for its completion contained in Handbook 4150.2 is no longer applicable as well.  Examples of minor property conditions that no longer require automatic repair for existing properties include, but are not limited to:

·        Missing handrails

·        Cracked or damaged exit doors that are otherwise operable

·        Cracked window glass

·        Defective paint surfaces in homes constructed post 1978

·        Minor plumbing leaks (such as leaky faucets)

·        Defective floor finish or covering (worn through the finish, badly soiled carpeting)

·        Evidence of previous (non-active) Wood Destroying Insect/Organism damage where there is no evidence of unrepaired structural damage

·        Rotten or worn out counter tops

·        Damaged plaster, sheetrock or other wall and ceiling materials in homes constructed post- 1978

·        Poor workmanship

·        Trip hazards (cracked or partially heaving sidewalks, poorly installed carpeting)

·        Crawl space with debris and trash

·        Lack of an all weather driveway surface

Examples of property conditions that may represent a risk to the health and safety of the occupants or the soundness of the property for which FHA will continue to require automatic repair for existing properties include, but are not limited to:

·        Inadequate access/egress from bedrooms to exterior of home

·        Leaking or worn out roofs (if 3 or more layers of shingles on leaking or worn out roof, all existing shingles must be removed before re-roofing)

·        Evidence of structural problems (such as foundation damage caused by excessive settlement)

·        Defective paint surfaces in homes constructed pre-1978

·        Defective exterior paint surfaces in home constructed post-1978 where the finish is otherwise unprotected.

Lenders must review the appraisal to determine whether the appraiser has reported any property conditions that will affect the health and safety of the occupants or the security and the soundness of the property and must require immediate repair where the property condition poses a threat to these criteria. 

Inspection Requirements 

FHA no longer mandates automatic inspections for the following items and/or conditions in existing properties: 

·        Wood Destroying Insects/Organisms:  inspection required only if evidence of active infestation, mandated by the state or local jurisdiction, if customary to area, or at lender’s discretion

·        Well (individual water system):  test or inspection required if mandated by state or local jurisdiction; if there is knowledge that well water may be contaminated; when the water supply relies upon a water purification system due to presence of contaminants; or when there is evidence of:

Corrosion of pipes (plumbing)

Areas of intensive agriculture within ¼ mile

                              Coal mining or gas drilling operations within ¼ mile

Dump, junkyard, landfill, factory, gas station, or dry cleaning operation within ¼ mile

Unusually objectionable taste, smell or appearance of well water

(superceding the guidance in Mortgagee Letter 95-34 that requires well water testing in the absence of local or state regulations)

·        Septic:  test or inspection required only if evidence of system failure, if mandated by state or local jurisdiction, if customary to the area, or at lender’s discretion

·        Flat and/or unobservable roof

Consequently, the guidance provided in Handbook 4150.2, Chapter 3, Paragraph 3-6, A-6 referencing mandatory termite inspections for any structure that is ground level and for any structure where wood touches the ground; Paragraph 3-6, A-5 referencing mandatory well and septic tests; and Paragraph 3-6, A-12 referencing mandatory inspections for a flat roof is no longer applicable.  Additionally, the guidance provided in Handbook 4905.1, REV-1, Chapter 2, Paragraph 2-5, B-1 referencing mandatory well water tests is no longer applicable.  In cases where well tests are necessary, as described above, FHA’s existing testing standards outlined in Chapter 3, Paragraph 3-6, A-5a. of Handbook 4150.2 remain in effect and supercede Mortgagee Letter 95-34.  If the appraiser reports a potential property deficiency that may pose a threat to the safety of the occupants or the security and soundness of the property, the lender will require an inspection of the condition to determine whether repairs are necessary to mitigate or resolve the problem.  Examples of conditions that will continue to require automatic inspections include, but are not limited to: 

·        Standing water against the foundation and/or excessively damp basements

·        Hazardous materials on the site or within the improvements

·        Faulty or defective mechanical systems (electrical, plumbing, or heating)

·        Evidence of possible structural failure (e.g., settlement or bulging foundation wall)

 Additional Changes to Appendix D, Valuation Protocol 

As a result of these changes in FHA’s repair and inspection requirements for existing properties, Revised Appendix D of Handbook 4150.2, CHG-1 has been updated.  The following pages in Revised Appendix D have been updated to reflect these changes: 2, 4, 19, 23, 27, 50, 55, 60, 85, 92, 112, 116 and 120.   Revised Appendix D is attached to this Mortgagee Letter and will be available online at:

http://www.hudclips.org/cgi/index.cgi

    Conditional Commitment Form 

Mortgagee Letter 2005-34 instructed the mortgagee to provide a copy of the completed form HUD-92800.5B (Conditional Commitment Direct Endorsement Statement of Appraised Value) to the mortgagor at least five business days prior to loan closing.  The five-business day delivery date prior to loan closing of the Conditional Commitment form is hereby rescinded and lenders are instructed to ensure that the mortgagor receives either a completed copy of HUD 92800.5B, or a copy of the completed appraisal report, at or before loan closing. 

This Mortgagee Letter is effective for all appraisals performed on or after  January 1, 2006.

If you have any questions regarding this Mortgagee Letter, please contact your local Homeownership Center (HOC) in Atlanta (888) 696-4687, Denver (800) 543-9378, Philadelphia (800) 440-8647, or Santa Ana (888) 827-5605.

                                                Sincerely,

                                                            Brian D. Montgomery

                                                            Assistant Secretary for Housing-

                                                                Federal Housing Commissioner

Attachment

Delaware Today announces the best places to work in Delaware.  These are companies that didn’t lose ground with today’s economy.  They have keep or hired new employees and are projected to grow even more. They are list below by category:

Technology

EZANGA.com, HOSTMYSITE.com, Zieta Technology, Verizon and Accenture

Green Friendly Jobs

Brightfields, Inc, Guardian Environmental Services, Inc., and Tetra Tech

Health and Wellness

YMCA Delaware, Beebe Medical Center, Arbonne, Christiana Care Health System, AFLAC and Bayhealth Medical Center

The Annuals

Are companies that have made the list in past years but are still hiring, profitable and employees enjoy working there.

Barclays Bank Delaware, W.L. Gore Associates and Dover Downs Inc.

Beach Companies

Dogfish Head Brewings and Eats, Body Shop and Fitness Center and City of Rehoboth.

On October 20, 2009 the League of American Bicyclist announces its new rankings of bicycle friendly states.  Delaware was ranked #31 in 2008 but has moved up to the #9 position.  The states are ranked by their Infrastructure, Education, Enforcement, Legislation, Evaluation, Polices and Programs.  The Bicycle State Friendly program recognizes the states that support bicyclists.  States that encourage residents to bicycle for transportation and provide safe trails and pathways for cyclists. 

As of March 1, 2009, Fannie Mae changes the following financing regulations for condos:

            1.   No financing available to condos in buildings if more than 49% of all condos are investor owned.

2.      No financing for new construction unless at least 70% of the condos have been pre-sold, this is up from 51%.

3.      No financing if more than 15% of the owners are behind in their condo fees.

4.      No financing available if more than 10% of the units are owned by one investor.

Minimum down payment on condos roused to 25% down and Fannie Mae charges three quarters of a point to finance a condo in addition to their current fees.

____________________________________ 

Real estate is a very good alternative to stocks and perhaps other investments at this time, but it needs to be right for you personally as well as right for your portfolio,” says James Boykin, author of “Investing in a Vacation Home for Pleasure and Profit” and a retired professor of real estate analysis at Virginia Commonwealth University.Here’s a look at how the second home market stacks up, what to look for when selecting a property and what it takes to land a loan. “The long-term underlying demand is favorable for vacation homes because of the large number of middle-age, middle income Americans [who are the primary buyers of such properties],” says Walter Molony, spokesman for the National Association of Realtors. “In recent years, this market has been driven by the baby boomers, but there are two even larger population groups coming up right behind them. Those younger segments will continue to fuel this market for the next 10 years.” At the same time, NAR reports the housing affordability index rose 13.6 percent in January to 166.8, the highest since tracking began in 1970.The January index, the most recent month for which data are available, indicates a median-income family, earning $59,800 could afford a home costing $283,400 in January with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest. A year ago, the same family could afford a home costing $263,300. “If you have the resources and are confident about your economic future, you’re not going to find a better market than we’ve got today in terms of affordability and raw buying power,” says Molony. “It doesn’t get much better than this.”  Who’s Buying? Those who buy vacation homes overwhelmingly do so for personal enjoyment, rather than investment potential.A 2009 NAR study finds 84 percent of vacation homebuyers were most interested in owning a family retreat, while 25 percent bought with the intent to rent to others and 26 percent are looking to help diversify their investment portfolio. A smaller percentage – 30 percent – expect to use their vacation home as their principal residence in the future.  Regardless of your intent for a vacation property, however, Boykin notes it’s important to buy with resale value in mind. Look for views, proximity to amenities and established resort communities, he says, especially if you hope to rent it out part-time. It’s also best to stay within driving distance of your primary home, enabling you to enjoy your vacation retreat more often and pop in to address problems as they arise. First-hand knowledge of the market will also help you avoid buying into a community that’s on the outs. By: Shelley K. Schwartz, Special to CNBC.com | 23 Mar 2009 | 01:15 PM ET

Starting March 23, 2009 appraisers will be visiting the 1,730 local residents of Milton to determine property values.  According to Curt Riley of Virginia based Property Tax Associates/DelVal (PTA) a study will be done of the real estate market in 2008 and early 2009 and the Milton real estate sales, making adjustments to value as determined.

A recent town charter was passed in March 2008 to have property assessments performed every 10 years.  The last townwide assessment for Milton was done in 1994.  Milton collected $585,000 in property taxes last budget year. 

However, reassessments do not normally increase the tax revenue to a town.  Their purpose is to even out the distribution of the tax burden.  Only about one-third of property owners will see a raise in property taxes.  While another one-third will see a decrease in property taxes and the remaining one-third will not see a change in property tax.

The appraisers will have photo id’s and their vehicles will be clearly marked with logos on the doors.  If a homeowner is not home a door hanger will be left asking for the homeowner to give additional information.  Each property owner will receive written notice by mail about any changes in assessed value.  The apprasier will be available to meet with the homeowner to discuss the findings.

All work will be completed by the end of the summer.

City Mayor Jim Ford and City Council approved a 25% property tax increase for Lewes.  This equates to a .10 cent increase for every $100 assessed from last year.  For example, last year if a property owner’s home was assessed at $100,000 their tax would be $390 (.39 cents per $100 assessed value).  This year it would be $490 (.49 cents per assessed value).

Mayor Ford said the tax increase is necessary to help balance the budget deficit of $358,000 and to maintain common open spaces throughout Lewes.  Other measures will be taken to align the deficit.  Lifeguard hours will be cut as well as seasonal police officers and parking meter employees.  However, full-time city employees with get a pay raise of 2.75%.

Property tax bills will be mailed shortly after April 1, 2009 and are due by June 30, 2009 or a late fee will incur.

Welcome to Keller Williams Realty At The Beach’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Lewes, Rehoboth and all of Sussex County.