Rates Increase As Stocks Rally; Townhome Complexes Do NOT Need FHA Approval

30 Year Fixed Rate Loan at a Cost of One Point: 4.375%*

Rates increased sharply yesterday afternoon, as the stock market rallied; investors pulled money from bonds and mortgages in favor of the stocks, and pushed rates upward. There was little financial news to spark the rally, but this type of volatility is typical when rates appear to have hit a trough or a low ebb. Expect more volatility; a "rate quote" remains valid for only a very short period of time, unless locked immediately.

Please remember that Town-home or PUD Complexes do NOT need a formal FHA approval in the same way that a Condo Complex does. A single PUD or town-home qualifies for FHA financing in the same way that any other SFR does; you do not need a "spot approval". This is very important b/c many buyers in need of FHA financing unnecessarily avoid PUD/town-home complexes.

A town-home can look just like a Condo, but the difference is that the owners of a town-home own the land or the lot underneath their unit. With Condos there are no individual lots; condo owners do NOT own a lot under their unit (often Condos are 2nd-story units with no access to the ground in any case). Condo owners instead own an equal and undivided portion of the entire parcel that encompasses the entire complex.

You can tell the difference between the two types complexes by looking at the preliminary title report and/or accompanying the plat map.

Jay Voorhees and Heejin Kim at (925) 855-4491