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10 Questions for Homebuyers Who Want to Go Green - Or Just Save on Their Utilities

For homebuyers, green is fast becoming a priority -- whether it's because they want to reduce their energy costs, minimize their carbon footprint or improve indoor air quality.

Here are 10 questions that prospective buyers or renters ought to ask to find out how green a house or apartment is.

1. How big is it?

The bigger the home, the more energy it uses. The U.S. Green Building Council considers a "neutral size" home -- basically what most people need, without what might be considered luxury space -- to be 900 square feet for a one-bedroom home, 1,400 square feet for two bedrooms and 1,900 square feet for three bedrooms. A 100% increase in the size of the home adds anywhere from 15% to 50% to energy use.

2. Where is it?

Can you walk to public transportation? Are there sidewalks or easy places to walk in the neighborhood so you don't always have to drive? How close are shopping centers and other places you would frequent? The Web sitewalkscore.com rates the walkability of cities, neighborhoods and individual addresses and shows the distances to stores, restaurants, schools and amusements.

3. How is it oriented?

South-facing windows can trim heating costs in the winter. Shade from trees to the south and west can reduce cooling costs in the summer.

4. Is it well-insulated, and are doors and windows sealed tightly against air leaks?

The U.S. Energy Star Web site, energystar.gov, features a calculator to help determine how much insulation you need, based on your location. To guard against air leaks, windows and exterior doors ideally should have an Energy Star rating, which indicates they meet a certain standard of efficiency in preventing the loss of heat in the winter and cooling in the summer. You may be able to feel air leaks, or you can hire an energy auditor to conduct a "door blower test" -- a big fan placed in a doorway sucks air out of the home, creating easily detectable drafts rushing in from outside wherever there's a leak.

5. Has the indoor air quality been tested?

Well-insulated, well-sealed homes not only hold in heat and cooling, but also can retain toxins such as formaldehyde, mold, asbestos and lead. A test will show whether any toxins are present in levels that exceed the safe maximums established by the Environmental Protection Agency. You might also ask whether the home was constructed or renovated with nontoxic building materials and furnishings, such as low- and zero-emission paints.

6. If it's an older home, have insulation, heating and cooling systems and appliances been upgraded?

Newer products are far more efficient than those bought several years ago. Also, has higher-efficiency lighting been installed?

7. How efficient is the water usage?

Are the kitchen and bathrooms equipped with water-efficient plumbing fixtures? If it's a house, does it have a water-conserving irrigation system for the grounds, and landscaping that minimizes the use of water? It may also have a rainwater collection and storage system, particularly in drier areas where water is increasingly scarce and costly.

8. What's on the roof?

A lighter-colored roof reflects more heat than a dark-colored roof, which absorbs heat, putting more strain on the cooling system. Does it have skylights that let in natural light?

9. Where did the home's materials come from?

Recycled or salvaged building materials reduce the home's impact on the environment. Also preferable are materials that are locally available, can be processed with less energy and water, are reusable or recyclable, are durable and are abundant in the environment.

10. Has it been certified green?

The U.S. Green Building Council, the Environmental Protection Agency and others offer ratings on homes, based on inspections by trained third-party professionals.

By: Sari Krieger, www.wsj.com

Are interest rates going to rise this spring?

It looks like interest rates will be on the move this summer and not in the direction we all like. Interest rates have started to slowly climb this year and will continue. To get in on these low interest rates the time to act is now.

Check out this video for some great information on how interest rates change and some insight as to why changes are on the way.

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FHA Home Improvement loans? Low Down Mortgages

Every time the U.S. Department of Housing and Urban Development makes a change or looks at its financial stability, you hear howls about its function in housing. Should the government really be involved in homes and loans?

Some members of Congress would like to see the Federal Housing Administration agency taken out of HUD and put into the private sector.

For years, "government housing" options -- specifically FHA-insured loans -- were perceived as being problematic and heavily wrapped in red tape. The favorite line for real estate salespersons became, "Of course your FHA loan is screwed up; can you spell HUD backwards?''

But, guess what? HUD also steps up. HUD tried programs that the private sector wasn't quite ready to digest. The agency first introduced and stood by the country's most popular reverse-mortgage product and also a couple of its first cousins -- low-down payment first mortgages and the purchase-rehabilitation package known as the FHA 203K loan.

In 2009, when money was tight and jumbo money became so difficult to find, FHA became the safety valve for many mortgage brokers. Some lenders report that FHA loans make up nearly 40 percent of their business, nearly double the volume of the past five years combined.

While the periodic dark side of the agency has surfaced over time -- notably investigations of former secretaries and allegations that some programs were labeled "inept, detrimental and costly'' by the Office of Inspector General -- HUD and other government agencies are a critical part of the public housing landscape, despite the calls by some critics to make the agency private.

HUD officials have expressed worries that if FHA went private, borrowers would be charged higher fees and interest rates than those currently charged, resulting in fewer homeownership options. In addition, the department points to a task force conclusion that the sale of FHA to private owners would not attract any buyers offering a reasonable price.

FHA insures loans so that if the borrower defaults, the lender is guaranteed to receive the outstanding mortgage amount. For the past 75 years, an FHA loan has been the primary low-down payment option for homebuyers. The popularity of FHA loans had dwindled in the past decade as the private market has grown more sophisticated and efficient at creating and providing mortgage money. This year, lenders returned in droves to the security that FHA provides for their borrowers in all categories.

While HUD is mostly known for its FHA low-down payment home loans, FHA has a home-improvement loan program, too, and it has come in handy for folks who need cash and can't get a home equity loan due to already high loan amounts or slumping home values.

FHA Title 1 loans of up to $25,000 are available to owner-occupants and investors who want to repair or improve their property. Up to $15,000 can be obtained regardless of home value. And, if you need $5,000 or less, no security is necessary.

Historically, when government accepted responsibility for providing low-income housing, it was at the local level, particularly by county government. With the collapse of the banking system in 1929, the federal government was forced to produce solutions to what quickly became a national housing crisis. Most home loans then were short-term, non-amortizing deals financed by local investors or local banks. Most of these loans forced homebuyers to refinance their homes every few years at the prevailing interest rate.

The Roosevelt Administration began a number of initiatives directed at stabilizing the nation's housing stock, encouraging home construction, and promoting homeownership. The first of these programs was the Federal Home Loan Bank System that established a complex system of government support for home mortgages.

The Housing Act of 1934 created the Federal Housing Administration (FHA), which served as a review committee for banks and other loan institutions to make loans to low-income families.

A prime traditional FHA target -- first-time homebuyers, many of whom are new to this country -- is pushing the housing ladder. Analysts believe that immigrants hold the keys not only to the residential building industry but also to other critical segments of the economy. That's because many newcomers pay cash, reducing the concerns of escalating consumer debt, except in big-ticket purchases like homes. Therefore, HUD is the critical player at both ends of the housing finance ladder -- first-time loans and reverse mortgages.

In 2009, the agency showed it was the go-to player for all loans in between. It now has more than 5.2 million insured single-family mortgages and 13,000 insured multi-family projects in its portfolio.

By: Tom Kelly, www.inman.com

FHA Buyers that are on the fence... It might be time to jump off

Waiting a few extra days or weeks to purchase a home this spring could cost buyers thousands of extra dollars as the office of Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA).

Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board's mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.

Here are a few reasons why:

On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.

Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these "seller concessions" can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.

There is only one way to avoid being affected by all of these costly changes that lie ahead – submit all FHA mortgage applications by the last week of March.

Arizona not following poor national Real Estate Trends

TEMPE, Ariz. - (Business Wire)Fidelity National Title, one of Arizona's largest title insurance and escrow service companies, in partnership with Cromford Report, a subscription-based online statistical resource on the Metropolitan Phoenix residential resale market, today confirmed that the top of the Arizona real estate market was in June of 2006, with the bottom hitting in April of 2009. Maximum inventory of homes on the market was in late April of 2008.

According to Michael Orr, Analyst and Author of The Cromford Report, this month's pending sales inARMLS (the Arizona Regional Multiple Listing Service) are at a record level for January, signifying an increase in demand – a critical indication of recovery for Arizona’s real estate market and a positive sign of market activity. Market recovery is likely to be shallow and slow. Steady price stability is important to prove Arizona is past the bottom and inspire market confidence in a recovery.

A keynote speaker for the recent sold-out Fidelity 2010 Real Estate Crystal Ball event, Orr stated, "...like a supertanker, once the real estate market gathers momentum, it is very slow to turn around. 2010 won't see a dramatic shift, but we can expect to see a shallow upward trend across the market. The number of homes under contract is more than double what it was last January, and sale price increases are likely to follow."

He continued on to state that while the buying frenzy has cooled at the bottom of the market, activity is warming for homes in the $250,000-$400,000 range.

While many markets are showing an upward trend, it is important to note that some areas and neighborhoods are flat or continue to decline. There may be another dip in sale prices as short sales continue to dominate the market, but the recent trend of sales price increases are a positive indication.

"The last three months of 2009 saw a 60% increase in short sale closings," stated Fidelity Senior Vice President Steve de Laveaga. "In 2010, you will see a number of lenders move to aggressive short sale programs and cash for keys for sellers."

December and January data for 2010 shows a 25 percent drop in REOs compared to last year, short sales increased by 16 percent and normal sales increased by nine percent.

Short sales are expected to dominate the market this year, with REOs declining in importance as banks/lenders are discovering that they lose less money on short sale transactions. According to de Laveaga, trustee sales by bank-owned properties result in an average of $38,000 lost per transaction compared to a short sale.

http://www.earthtimes.org/articles/show/january-hits-record-level-of,1137143.shtml

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