Are you a service member, veteran, or part of a military family seeking a safe, sound, and sanitary home through the VA home loan program? Ensuring your prospective property is termite-free is as crucial as meeting other essential homeownership requirements. Join us as we explore VA termite inspections by state, discovering where these inspections are mandatory and who bears the responsibility.

Why VA Termite Inspections Are Vital

The VA understands the significant impact termites can have on homeowners. In the United States alone, termites cause damage to over 600,000 homes each year, costing homeowners approximately $5 billion annually. As part of their commitment to veterans, the VA aims to protect those utilizing VA loan benefits from falling victim to termite-related issues prevalent in certain regions.

Understanding When VA Termite Inspections Are Required

Termites thrive in specific locations across the country; however, some areas more than others can become infested. Over 30 states mandate termite inspections before finalizing a home loan, while others grant discretion to the parties involved. In some states, individual counties enforce their own specific termite inspection requirements. To keep up with the growing termite infestation, the VA implemented changes in June 2022, making termite inspections mandatory for properties in areas classified as "Moderate to Heavy" or "Very Heavy" infestation zones.

Who Pays for VA Termite Inspections?

The cost of a termite inspection can vary, with an average range of $100-$200. Negotiations between buyers and sellers often lead to sellers covering this fee so be sure to ask your realtor about including a provision in the contract regarding who is responsible for the cost of the inspection. In the interest of ensuring a termite-free home, sellers may recognize the benefit of the inspection, and facilitating a smooth VA loan process.

VA Termite Inspection Requirements by State

After embarking on your VA home loan journey, the primary question is whether you need a termite inspection. For the following states, the answer is an unequivocal yes:

Alabama, Arkansas, Arizona, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Mississippi, Missouri, North Carolina, Nebraska, New Jersey, New Mexico, Nevada, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia, Washington, D.C.

In other states, a termite inspection is only required if an independent VA appraiser identifies possible termite related damage during the appraisal process. The need for termite inspections in these states remains discretionary:

Alaska, Colorado, Idaho, Maine, Michigan (required in counties: Allegan, Barry, Berrien, Branch, Calhoun, Cass, Hillsdale, Ionia, Jackson, Kalamazoo, Kent, Lenawee, Livingston, Macomb, Mason, Monroe, Muskegon, Oakland, Oceana, Ottawa, St. Clair, St. Joseph, VanBuren, Washtenaw, and Wayne), Minnesota, Montana, New Hampshire (required in counties: Cheshire, Sullivan, Merrimack, Rockingham, Belknap, Hillsborough, and Strafford), New York (required in counties: Bronx, Broome, Columbia, Delaware, Dutchess, Greene, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, Sullivan, Ulster, and Westchester), North Dakota, Oregon, South Dakota, Vermont (required in counties: Bennington and Windham), Washington, Wisconsin (required in counties: Columbia, Crawford, Dane, Dodge, Grant, Green, Iowa, Jefferson, Kenosha, Lafayette, Milwaukee, Ozaukee, Racine, Richland, Rock, Sauk, Vernon, Walworth, Washington, and Waukesha), and Wyoming.

The Importance of Professional Termite Inspections

To identify any signs of termite infestation, professional inspectors will diligently examine possible entry points, both inside and outside the home. While damaged wood serves as an obvious indicator, other telltale signs may warrant additional attention. Addressing any identified issues becomes imperative before finalizing your VA home loan.

VA Loan Termite Inspection Costs

In the past, VA loan borrowers were not permitted to pay for termite inspections during the home loan process. Previously, termite inspections were typically excluded from the expenses borne by VA loan borrowers during home purchases. Yet, in June 2022, the VA revised its regulations, permitting all borrowers the option to bear the cost associated with termite inspection reports, particularly when the inspection is mandatory. Additionally, VA borrowers can handle the costs of necessary repairs to meet the VA's minimum property requirements.

On February 14, 2023, the VA announced they will be revising some of their funding fees, to make it more affordable for the purchase or construction of a home. Read about the Funding Fee Charge Update here on the VA’s announcement.

Here are the Current VA funding Fees and the new VA Fees for Loans closing on or after April 7, 2023.

Want to see how this can help you? Find out how this change could affect your ability to qualify for a VA loan! Talk with one of our experienced loan originators, who will help you every step of the way!

The HUD released details of a long-anticipated plan to reduce the annual MIP (mortgage insurance premiums) that are currently charged to FHA borrowers by 30 Basis Points (0.3% of the loan balance). HUD Secretary Marcia Fudge made the announcement February 23^rd, at Bowie State University.

The premium will be reduced from 0.85 percent to 0.55 percent for most FHA borrowers, which could benefit up to 850,000 borrowers over the coming year, saving these families an average of $800 annually. “...today, we are building on the steps we’ve taken to make homeownership more affordable, and HUD is acting to ensure people feel comfortable purchasing a home as they build toward their future. As we reduce housing costs for people with FHA mortgages, we continue our work to address longstanding disparities in homeownership,” says Secretary Fudge.

Details from HUD Release:

“The 30 basis point annual MIP reduction will apply to almost all Single Family Title II forward mortgages insured by FHA. Further, the reduction applies to all eligible property types, including single family homes, condominiums, and manufactured homes, all eligible loan-to-value ratios, and all eligible base loan amounts.

The average FHA borrower purchasing a one-unit single family home with a $265,000 mortgage will save approximately $800 this year as a result of FHA’s premium reduction. For the same borrower with a mortgage of $467,700 – the national median home price as of December 2022 – FHA’s annual MIP reduction will save them more than $1,400 in the first year of their mortgage. In addition to providing overall savings to borrowers, a lower annual MIP can also help more people qualify for a mortgage.”

The annual mortgage insurance premium reductions are noted in the table below and are effective for mortgages endorsed for insurance by FHA on or after March 20, 2023.

Why this is important:

Lowering the monthly payment for MIP can help you afford a larger home or it could mean the difference between qualifying for a mortgage or not!

Get started with one of our experienced loan originators now to take advantage!

View the HUD announcement

With the mortgage market in such a volatile state, it is important to be aware of all your options for purchasing a new home.  A buydown is one such option, and uniquely applicable for the rates in today’s environment.

What is a buydown? 

A buydown is a mortgage option where the payment is reduced temporarily as if the rate was "bought" down for the first 1-3 years of the loan, depending on the type of buydown. With a buydown, homebuyers are able to purchase their homes with lower monthly mortgage payments to start.  

There are several reasons why one would use a buydown.  Sellers trying to attract potential homebuyers in this market, or a buyer expecting their annual income to increase or rates to go down, in the next few years, being the most common.

How does it work?

Let’s use the example of a 350,000 loan with a 6% rate and a 3-2-1 buydown.  The principal and interest payment for the loan will be 1798.00/mo.  Now, in the first year of the 3-2-1 buydown, the interest rate will be 3%, with a monthly payment of 1265.00/mo, while the remaining 533.00/mo will come out of the “temporary buydown” escrow account that is seller-funded at the time of closing.  This will continue into year 2 and year 3 with the amount coming from the buyer increasing and the amount coming from the escrow account decreasing. Then from year 4 to year 30, the borrower will pay the full principal and interest payment.  There is no additional charge to the buyer to take advantage of this program.

Click the link below to see what your payments could look like for the buydown period and beyond, as well as the amount that will be funded to the “temporary buydown” escrow account.  

In simplest terms, when you close your loan, funds are placed in a separate account and used to pay a portion of your monthly payment for the first 3 years of the loan.  This means you can take advantage of the savings to fix up the house you just bought, and if rates improve in the future, you are encouraged to refinance to fix a lower rate and payment.  

Is it right for me?

As with any mortgage product, it is important to understand how it works, the risks involved and if it will benefit you.  Being an informed buyer ensures that you are making the right choices for yourself.  Reach out today to find out if this or other programs we offer cab help you on your way to becoming a homeowner!

What is a 203(K) Rehab loan?

Section 203(k) insurance enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.  

Simply put, you can purchase or refinance a house that needs some help! Certain repairs are allowed through the program to modernize and improve your home and it is all contained within one FHA mortgage!

What kind of repairs and improvements are allowed?

• structural alterations and reconstruction 
• modernization and improvements to the home's function
• elimination of health and safety hazards
• changes that improve appearance and eliminate obsolescence
• reconditioning or replacing plumbing; installing a well and/or septic system
• adding or replacing roofing, gutters, and downspouts
• adding or replacing floors and/or floor treatments
• major landscape work and site improvements
• enhancing accessibility for a disabled person
• making energy conservation improvements

Need just a small renovation without any structural changes?  Check out the Limited 203(k) loan!

This program permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. Quickly and easily tap into cash to pay for property repairs or improvements, like remodeling the kitchen, painting the interior or purchasing new carpet. Homeowners using this program to refinance can make property repairs, improvements, or prepare their home for sale.  

Pros and cons of an FHA 203(K) loan

Cons

• You’ll pay higher mortgage insurance premiums and fees than a standard mortgage
• You must finance a home you intend to live in
• You may have to pay out of pocket for reserves to cover unexpected expenses
• Your loan amount will be restricted by FHA loan limits

How to get approved

To get a 203(k) loan, you must meet the requirements for a standard FHA loan.

Credit score, credit history and down payment. If you’re making the minimum 3.5% down payment, you’ll need a 580 credit score. If your score is between 500 and 579, you must put down at least 10%. At least three years must have passed since any foreclosures.

Mortgage insurance premiums. You’ll pay upfront and annual mortgage insurance premiums. The upfront insurance is 1.75% of your loan amount and the annual insurance ranges from 0.45% to 1.05% of your loan amount.

Loan limits. Keep your total loan amount below the FHA loan limit in your area. The 2022 loan limit for one-unit properties in most of the country is $420,680.

Contingency reserves. Depending on the size of your project, your lender may require that you set aside up to 20% of the cost of the improvements for unexpected costs that may arise. If you don’t have enough equity to roll them into your 203(k)loan, the lender may require proof you have the cash to cover them out of pocket.

Home value. One unique feature of renovation loans is you borrow money based on your “after-improved” value, which gives you more borrowing power than other types of home improvements loans that only consider your current “as-is” value. An approved FHA appraiser inspects your home, and considers the work plan and cost estimate to determine how much the home will be worth with the completed renovations.

Is a 203(K) loan right for you?

Exploring your options before you make a decision is always the best choice. Talk today with one of our expert loan officers who can guide you through the process toward your new home purchase!

California regulators approve plan to mandate solar panels on new home construction!

• California regulators Wednesday approved a historic plan to mandate rooftop solar panels on most new single-family homes built in the state.
• The California Energy Commission's action is expected to add on average about $9,500 to the cost of building new houses.
• The solar mandate, which goes into effect in 2020, received the support of home builder and solar trade associations as well as several large utilities.

California regulators on Wednesday unanimously approved a historic plan that will require most new homes in the state have rooftop solar panels that turn sunlight into electricity starting in 2020.

With the move, California now becomes the first state in the nation to mandate solar-energy installations on most single-family homes as well as multi-family residential buildings up to three stories, including condos and apartment complexes.

The solar mandate is expected to add on average about $9,500 to the cost of new houses but is projected to be offset by the solar system's long-term energy savings.

The mandate, approved 5-to-0 by the California Energy Commission, is part of the state's 2019 update of energy efficiency standards and ongoing efforts to help reduce greenhouse gases. The state's building sector is the second-largest source of greenhouse gas emissions when fossil fuels power plants are factored in.

"This is an undeniably historic decision for the state and the U.S.," said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, a trade association with about 1,000 member companies. "California has long been our nation's biggest solar champion, and its mass adoption of solar has generated huge economic and environmental benefits, including bringing tens of billions of dollars of investment into the state."

The commission's action on new 2019 building energy efficiency standards also apply to everything from current ventilation systems to indoor air quality. California updates its building energy efficiency standards every three years, and the state's ultimate goal is net-zero energy homes that reduces the carbon footprint of buildings and makes them effectively energy self-sufficient.

California — now the world's fifth-largest economy — already has a reputation for pushing the boundaries when it comes to going green. The state's renewable portfolio standard requires power companies to have 50 percent of total energy sources from renewable energy such as solar, wind, geothermal and hydroelectricity by 2030.

The commission estimates the solar mandate will add an average of about $9,500 to the upfront cost of single-family houses but result in about $19,000 in energy savings over a 30-year period.

"California has been a leader in solar in the U.S. for a long time and it's paid dividends both economically and to our environment here," said Sean Gallagher, vice president of state affairs for the Solar Energy Industries Association, a national trade association of manufacturers, developers and installers in the U.S. solar-energy industry. "California is taking a step further basically recognizing that solar should be as commonplace as a front door welcoming you home."

The approved standards still allow new home construction to continue with some natural gas but it looks to reduce gas need over time and facilitate a shift to high-efficiency electric appliances, such as heat pump water heaters. All-electric homes using solar are seen as having lower greenhouse gas emissions and less energy consumption than those that use natural gas.

Under the change, new homes are expected to cut energy use by more than 50 percent by having solar photovoltaic systems on rooftops. For residential homeowners, the commission estimates that the standards will add about $40 to an average monthly payment over a 30-year period but essentially save consumers $80 on monthly heating, cooling and lighting bills.

There are still significant upfront costs of requiring the solar panels on rooftops of new homes. The mandate comes at a time when California also is dealing with a housing shortage and the challenge of affordable homes statewide.

Experts suggest the cost of adding solar on new homes in areas such as the San Francisco Bay region where real estate prices are already high may not affect homebuyers as much. But it could prove to be more challenging for new homeowners in communities with lower housing costs such as Fresno in the Central Valley.

Regardless, the state estimates the proposed solar standards applying to most homes and many commercial structures could save California residents and businesses hundreds of millions of dollars in energy costs over the next decade.

Resource:

https://www.cnbc.com/2018/05/09/california-approves-plan-to-mandate-solar-panels-on-new-homes.html

Moving Across America

If you’ve ever wondered what areas people are moving out of and moving into, we have the list right here. Idaho held on to the top spot for people moving in following Washington and none other than yours truly, Nevada coming in at #3.

Here’s the full list:

MOVING IN	MOVING OUT
IDAHO	ILLINOIS
WASHINGTON	WEST VIRGINIA
NEVADA	NEBRASKA
TENNESSEE	SOUTH DAKOTA
ALASKA	HAWAII
MAINE	INDIANA
NORTH CAROLINA	DELAWARE
ALABAMA	LOUSINANA
NEW HAMPSHIRE	KANSAS

 

Affecting Your Home’s Feng Shui

Feng Shui (pronounced “fung shway”) is an idea adopted from ancient Chinese culture that describes how the placement of objects in a particular space affect the energy flow in that space. If you believe in energies, vibrations, and auras then you’ll probably want to arrange the furniture in your home in a way that will give you the most positive feelings.

The idea behind feng shui is that the inside of your home is a reflection of the inside of your soul. A clutter free home is a clutter free spirit and a clutter free mind. The feng shui of your home is affected by what you have inside of it. So if you let the trash cans pile up and allow the sink to run over with dirty dishes, you’re killing the feng shui or, the good energy in the room. Since those of us who work demanding jobs don’t always have time or the energy to just sit at home, it’s nice to have positive vibes flowing when you do get to be home. No one likes to come home to a disorganized house.

Having a good amount of light in your home also adds to the positive energy flow. The sun itself is a big ball of energy, and we’re lucky enough to have the sun shine down on us every day. It’s easy to take advantage of the sun’s positive energy by opening the blinds or drawing back the drapes. Allowing fresh sun rays in your home from day to day is sure to stimulate the feng shui in your house.

There are five basic elements of Feng Shui. They include Wood, Fire, Earth, Metal, and Water. These elements can also be expressed in colors or shapes. The Wood represents growth and creativity. Fire represents expansion and transformation. Earth is for stability. The Water represents clarity and relaxation. Metal (my favorite element) represents mental power and sharpness, it has a lot to do with intelligence. Having some form of these 5 elements in your home is thought to bring your home balance and solidity.

Though you do not need to have a deep understanding of Feng Shui to apply it to your home, it’s a great practice to put in place. There are tons of articles about Feng Shui and Chi and Chakras and how they all can affect you and your home. The point of it all is to give balance to your mind and your wellbeing. Whether you spend a lot of time or a little time at home, Feng Shui can help you to feel incredibly relaxed and peacefully organized.

 

 

 

When doing your research always be sure to consult great sources. Check out the sources for this article below!

https://www.realsimple.com/home-organizing/decorating/what-feng-shui/feng-shui-living-room.

https://www.thespruce.com/create-good-feng-shui-in-your-home-1275057

https://www.thespruce.com/feng-shui-tips-for-beginners-1274536

http://www.feng-shui-and-beyond.com/feng-shui-elements.html

 WHITNEY RUSH, VALLEY WEST MORTGAGE