Homes MSP Real Estate Blog

Down payment assistance programs

Dakota County has a new bond program that also offers down payment assistance.  The interest rate is 4.99% and there is up to $10,000 available in down payment assistance.  The property must be in Dakota County, the maximum purchase price is $276,683 and the maximum household income is $83,900 for 1-2 person households and $92,290 for 3+ person households.  The buyer must be a first time homebuyer and the property does not have to be a foreclosure.   The down payment assistance is determined by your household income and is a zero interest deferred payment mortgage.  The down payment assistance must be paid back when the house is sold or refinanced.

Hennepin County has money available through their Neighborhood Stabilization Program.  This program is available in specific areas of Brooklyn Park, Brooklyn Center, New Hope, Crystal, Robbinsdale and Champlin.  The down payment assistance is for foreclosed vacant homes and can be used for down payment and closing costs.  The minimum amount is $1000, up to $10,000 is available  and for those under 80% of the median income, you can qualify for up to an additional $20,000.  The loan is a zero percent interest rate that is also forgiven if you live in the house long enough.  If you get up to $14,999 and live in the home for 5 years, you do not have to pay any of it back!  You are required to have 50% of the required down payment into the transaction and must contribute a minimum of $1o00.

Woodbury has down payment assistance available for foreclosed homes.  You must be a first time homebuyer and buying a foreclosed home.   The maximum purchase price is $256,500 and household income may not exceed 80% of the median income.  The maximum down payment assistance available is $25,000 and is a zero percent interest rate deferred loan that is paid back when the property is sold or paid off.

Plymouth has a program for first time homebuyers to receive up to $25,000 in down payment assistance.    It is a zero percent deferred payment loan that is paid back when the home is sold or paid off.  You must contribute at least 50% of the required down payment and the assistance can be used for the remaining down payment and closing costs, plus mortgage principal reduction.

Minnesota has a program that is statewide for first time homebuyers with down payment assistance available.  The interest rate varies and down payment assistance is up to $5000.  The Home Help program through CASA offers additional down payment assistance.

City Living is a program in Minneapolis and St Paul that offers down payment assistance.  The down payment assistance is up to 2% of the mortgage amount.

These are just a few of the programs that are available to homebuyers.  Most require that you are a first time homebuyer and several require that you purchase a foreclosed home.  Most also required that you attend a Home Stretch first time homebuyer class.  Some of the loan are forgiven after you live in the home for a certain amount of time and some must be paid back.

Don't forget that if you write a purchase agreement by April 30th and close by June 30th, you can qualify for the Federal tax stimulus of up to $8000!!  I recently had a buyer use the Hennepin County NSP program, he received $14,000 in down payment assistance plus he is getting the $8000 tax credit - if he stays in the home for 5 years, he doesn't have to pay any of it back!  That's $22,000 that he got for buying a home!!

Leslie Vanderwerf, Advisors Mortgage - Email - Website

Wednesdays Unplugged - French and Blue Cheese Salad Dressings

NOTE: I spend my Wednesdays Unplugged from appointments. It's my day to stay home, enjoy cooking and welcome our kids and grandkids for dinner in the evening. We end our meal with quotes from the Norwegian 'Quote Cup' passed on to me from my grandmother. I share a quote and a recipe here each week, and sometimes some photos of family fun. I love trying new recipes...and love getting recipes you would like to share!

QUOTE OF THE WEEK

"We all live under the same sky, but we don't all have the same horizon." ~ Konrad Adenaur

We are in the midst of our winter birthday marathon in our family. Whoever has a birthday gets to choose the menu for the week, and last week was the start of three weeks in a row. We celebrated our daughter's birthday last week and she chose fondue... beef and shrimp, pineapple, with chocolate fondue for dessert.

RECIPE OF THE WEEK

Her favorite salad has always been iceberg lettuce with French and blue cheese dressings. This week's salad dressing recipes both come from www.FoodNetwork.com, with the French dressing from Rachel Ray and the blue cheese dressing from Ina Garten... both absolutely delicious!

FRENCH DRESSING

• 3 tablespoons white wine vinegar
• 3 tablespoons sugar
• 1/4 cup ketchup
• 1/4 cup extra-virgin olive oil
• 1 teaspoon garlic powder
• 2 teaspoons Worcestershire sauce
• Salt and white pepper

Mix in blender on high until dressing is combined.

BLUE CHEESE DRESSING

• 4 ounces good Roquefort cheese, chopped
• 1 cup mayonnaise
• 1 cup heavy cream
• 2 tablespoons tarragon vinegar
• 1 teaspoon kosher salt
• 1/2 teaspoon freshly ground black pepper

Mix in food processor with steel blade to desired consistency.

Sharlene Hensrud, RE/MAX Results - Email - HomesMSP.com

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Electric Baseboard Heaters - The Flipper Favorite

When I inspect a home in Minneapolis or Saint Paul that has electric baseboard heat, it's usually a dead giveaway that someone did some remodeling, or someone flipped the house.  In fact, the only houses that I run across in the Twin Cities metro area with all electric baseboard heaters are houses that have been 'flipped'.   Why?  I'll get there.

The times when electric baseboard heaters make the most sense to install are when someone wants to add heat to a room that won't be used frequently, and they don't need air conditioning.  One common place for Minneapolis and Saint Paul houses would be basement bedrooms that get added as guest bedrooms.  Another would be additions that just don't stay as warm as they should.   I added a couple baseboard heaters to a sun room at my own house that doesn't get very good air flow from the furnace, and I turn the heaters on when the temperature drops below zero outside. 

The nice thing about electric baseboard heaters is that they're easy to install, they don't cost much, and there isn't a lot that can go wrong with them.  The only failure I've found during home inspections is that the thermostats have gone bad, and this isn't a difficult fix.  Most of the problems that I write up during home inspections deal with improper installations.  I've listed the two most common offenders below.

Outlets Installed Above The Heater All manufacturers of electric baseboard heaters prohibit the installation of electrical outlets above the heaters.  Electric baseboard heaters work by turning a heating element on and off; it's either hot or it's not, nothing in-between.  Because they get so hot, an electric wire draped in front of a baseboard heater could potential melt or start a fire.

 

Improper Clearances Electric baseboard heaters require certain clearances above and in front of the units to anything combustible, such as drapes.  Again, the reason for this is to prevent a potential fire.   The clearance requirements vary - just check out the two diagrams below from two different manufacturers.  One says twelve inches, the other says six.

   

These clearance requirements shouldn't be taken lightly.  The photo below came from a recent inspection where the drapes looked like they were about to burst in to flames.

 

So why are baseboard heaters a favorite of the fix-n-flipper?  They're cheap and easy to install.  On the downside, electric baseboard heaters cost far more to operate than a gas fired furnace... but why would the person flipping the house care?  They won't be paying the heating bills. For homes in rural areas where power companies offer off-peak discount rates for electricity, electric baseboard heaters might make sense as the primary source of heat, but not here in the heart of the Twin Cities. 

Reuben Saltzman, Structure Tech Home Inspections - Email - Home Inspector Twin Cities

    

Do I have to call the listing agent to see a house I found?

Good question. The answer is yes... and no. I frequently get calls from buyers who saw one of my listings online or driving by and would like to schedule an appointment to see it. Before scheduling the appointment I always ask if they are already working with a Realtor.

If you already have a relationship with a Realtor you should call him or her to schedule a showing... Realtors can show any property listed in the MLS, regardless of what real estate company or agent is representing it.

If you are not already represented by a real estate agent, by all means call the listing agent to see the property. Keep in mind that since we can show everything in the MLS it can save you a lot of time and hassle by choosing one agent to show you multiple properties at one time rather than setting up multiple showings with as many different agents. I always recommend that you see several properties in the same area for comparison.

It's a good idea to pick one agent to help you find and buy a property, then channel everything through her or him... so much easier, and your buyer's agent is legally obligated to keep your best interests in mind.

Buyers sometimes fear they will have to pay a commission to have an agent represent them, but most Realtor fees are covered by the seller... MLS listings already include commission to be paid by the seller to your buyer's agent on your behalf!

Sharlene Hensrud, RE/MAX Results - Email - HomesMSP.com

• I found a home I like online...now what???
• FAQ about Realtors
• Buying a Home
• Free GPS Home Search App... works on any Smartphone!

Sunday's Site - Main Street, Maple Grove

Named for its large stands of maple trees, Maple Grove was a quiet, largely overlooked suburb until development escalated in the 1990's making it one of the area's most populated cities. Located at the northwest corner of the Interstate loop around the Twin Cities metro area, Maple Grove has become a retail hub for communities extending far beyond its borders. It is home to more retail than any other Minnesota city except Bloomington, home of the Mall of America.

A 2,000 acre gravel mining area has been slowly developed into a residential and commercial "downtown", starting with the storefronts on Main Street. Although more typical suburban retail areas surround it, Main Street is a collection of smaller-scale buildings with storefronts and many local shops and restaurants, giving it a home town feel. When I stopped at lunch time yesterday, the streets were filled with cars and the restaurants filled with people out enjoying the warm, sunny day.

Main Street was the smaller first phase of the Arbor Lakes three-phase development, which also includes more than 65 stores and restaurants in The Shoppes of Arbor Lakes, Minnesota's first lifestyle center designed in the spirit of a mid-century American village.

One of the fastest growing communities in the metro area, more than 1,000 homes were sold in the Maple Grove area last year.

Click here to see homes currently for sale in the Maple Grove area of Minneapolis-St. Paul, Minnesota. Please be patient while the link searches for the most current listings... click on the map to zoom in until you see icons on the dots, then pass your cursor over them for property information, click for property details. 

Sharlene Hensrud, RE/MAX Results - Email - HomesMSP.com

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It's Not Empty Anymore and It Sold!!!

Last week I showed you "before" pictures of an empty house we were staging.  It turned out so well! This is a great home and a little furniture really helped.....the home sold 5 days after staging!

Here are the before and after pictures:

 
You can see what a difference furniture and accessories make.  Rooms typically look larger and the whole house is more inviting.  So whether you hire a stager or do it yourself, make sure you show your home furnished!  It WILL sell faster!

Jeri Pischke, Tender Heart Transitions - Email - Website 

Who knew a sofa and bed would make the difference?

This is a pretty impressive staging story about a house that had been on the market about a month with tons of showings but no offers. It's a really cute house in great move-in condition... first-time homebuyer price range. The seller had moved out and left it in super clean, move-in condition. Feedback was very positive... but everyone said it was just too small to be liveable.

The current owner lived there with 3 kids... cozy, yes... but comfortable. We decided it was time to bring in Jeri to do some staging to show how furniture could fit. It's amazing how much bigger it looks with furniture! As counter-intuitive as it seems, rooms tend to look smaller when empty.

Who would have thought a sofa and a bed (plus...) could have made such a difference. It transformed this house from a clean property in good condition, but too small to live in... into a cozy home with multiple interested buyers. (Check back tomorrow for Jeri's post with more before and after photos.)

This happy seller just accepted an offer... only five days after staging!

Sharlene Hensrud, RE/MAX Results - Email - HomesMSP.com

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FHA update

Back in January I mentioned that there are going to be some significant changes on FHA mortgages.  The first one that is going to happen is the increase of the upfront mortgage insurance premium from 1.75% to 2.25%.  That change is effective with all case numbers that are ordered on or after April 5, 2010.  If you are buying a home with an FHA mortgage in the next month or two, you may want to try and get the purchase agreement written before April 5th, so a case number can be ordered right away.

The other major change is the amount of allowable seller paid closing costs is going to be reduced from 6% to 3%.  That change doesn't have an effective date yet, but is suppose to be early in the summer.

FHA also is looking at increasing the monthly mortgage insurance premiums, but has said if that is approved, they would lower the upfront mortgage insurance premium.

The last major change that affected buyers was that FHA now requires a credit score of 580 to have a 3.5% down payment.  Anyone with a credit score of less than 580 will need 10% down.  That doesn't affect too many people in this area as most lenders are requiring a 620 minimum credit score for any mortgage.

We are also seeing some investors capping the debt to income ratios on FHA loans at 50% which makes sense.  Most people are not going over that any more, but it has happened - especially if only one person was on the mortgage but there was more household income available to make payments than was used in qualifying.

As we hear more changes, I'll let you know!!

Leslie Vanderwerf, Advisors Mortgage - Email - Website

Wednesdays Unplugged - Minnesota Style Chili

NOTE: I spend my Wednesdays Unplugged from appointments. It's my day to stay home, enjoy cooking and welcome our kids and grandkids for dinner in the evening. We end our meal with quotes from the Norwegian 'Quote Cup' passed on to me from my grandmother. I share a quote and a recipe here each week, and sometimes some photos of family fun. I love trying new recipes...and love getting recipes you would like to share!

QUOTE OF THE WEEK

"What a wonderful life I've had. I only wish I'd realized it sooner." ~ Colette

We had grandkids sleep over last weekend and they wanted to make chocolate chip cookies... they helped both bake and eat them! When I printed out the recipe for baked cinnamon circle French toast from a blog post for breakfast our grandson recognized the photo of our 'quote cup' right away. I would guess that carved wooden vessel that came from Norway as a gift to my grandmother more than a half century ago will hold special meaning and memories for our children and grandchildren... we are now into our fourth year of pulling weekly quotes from it to share.

RECIPE OF THE WEEK

This week's recipe comes from Lunds and Byerly's... seems appropriate to use one of their recipes this week, as 'our' nearby Byerly's celebrates its grand opening after a major remodel. I would hardly call this chili, it's very mild and seems more like a hearty soup, but it combines two Minnesota favorites, wild rice and turkey. Great lunch leftovers!

MINNESOTA STYLE CHILI

• 1 cup chopped onion
• 1 teaspoon minced garlic
• 1 tablespoon olive oil
• 3 cups cooked, cubed turkey
• 2 cups cooked wild rice
• 1 (48 ounce) package chicken broth
• 1 (19 ounce) can cannellini beans, drained
• 1 (9 ounce) package frozen shoe-peg white corn
• 2 (4 ounce) cans diced green chiles, undrained
• 1 teaspoon ground cumin
• 3 tablespoons chopped fresh cilantro
• 1/8 teaspoon Tabasco
• 1 (8 ounce) package 4 cheese Mexican blend shredded cheese

In large Dutch oven, saute onion and garlic in oil until onion is tender. Stir in turkey, wild rice, chicken broth, beans, corn, green chilies and cumin.

Simmer, covered, over medium heat for 30 minutes. Stir in cilantro and Tabasco. Ladle into bowls; sprinkle with cheese.

Sharlene Hensrud, RE/MAX Results - Email - HomesMSP.com

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How Serious Is A Cracked Heat Exchanger?

It's an industry standard: if a furnace has a cracked heat exchanger, it gets replaced.  The American Gas Association has even put this in writing - they say "Any visible crack or hole is reason for requiring replacement of the heat exchanger or furnace."  When I inspect a furnace and I find a cracked heat exchanger (and I find a lot of them), I always say to replace it.

So what's the big deal with cracks or holes?  The concern is that a cracked heat exchanger could allow exhaust gas from the furnace to contaminate the household air with carbon monoxide.   In order for this to happen, the furnace must be producing high levels of carbon monoxide AND the exhaust gas must be mixing with the household air.  For a good example of a hazardous heat exchanger, check out the photo below showing a large rust hole in the heat exchanger of this high-efficiency furnace that was only ten years old.

 

Cracks, on the other hand, I'm not so sure about.  With the majority of the cracked heat exchangers that I've seen, I've always been curious how the exhaust gas from the furnace could possibly leak out of those tiny cracks enough to contaminate the househouse air.  Of course, what I'm curious about doesn't matter... but sometimes my curiosity gets the best of me, and I have to find out for myself. 

So I did.  I took home a furnace that had a cracked heat exchanger, and I removed the heat exchanger cell that had the largest cracks.  You can see the cracks for yourself below - click on any of the photos for a larger version.  This first photo shows the cracks as seen from inside the heat exchanger cell - this is what we saw during our inspection.

These next two photos show the cracks from the exterior, or blower side of the heat exchanger cell.  This part of the heat exchanger is usually not visible during the course of a home inspection.

I wanted to see if water would leak through these cracks, so I doused the outside of the heat exchanger and looked inside for any signs of leakage.  Nothing.

I've heard that penetrating oil, such as WD40, will get through the cracks, so I tried that next.  Nothing. 

Feeling pretty disappointed at this point and determined to get some results, I filled the heat exchanger with water.  I laughed like a mad scientist at what happened next.

 
 
Water began to leak out of the factory seam in about ten different places, but the crack never leaked.  

Why does this tiny crack mean the furnace should be replaced?  I've heard that when heat exchangers get very hot, the metal expands and the cracks open up, allowing air to leak in to or out of the heat exchanger.  Just because my test didn't allow any water to leak doesn't mean that this furnace was safe, and it doesn't mean that a different furnace will behave the same way... but I sure found it amusing. 

Maybe I need to get out more.

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Reuben Saltzman, Structure Tech Home Inspections - Email - Twin Cities Home Inspector