Oro Gets FHA Approval
Everybody wants in on this FHA thing! And who can blame ’em: It’s a heck of a lot easier to sell condos when you only need to require buyers to put down 3.5% of the purchase price. Already this week, we’ve had news of The Edge getting approved by the FHA and The Toren getting…
Everybody wants in on this FHA thing! And who can blame ’em: It’s a heck of a lot easier to sell condos when you only need to require buyers to put down 3.5% of the purchase price. Already this week, we’ve had news of The Edge getting approved by the FHA and The Toren getting in its application. Then yesterday the flacks for The Oro sent out a press release heralding the Downtown Brooklyn tower’s admission to the club. With buildings going into foreclosure recently, buyers are reluctant to commit, said Robert Scaglion, Senior Managing Director of Residential Marketing for Rose Associates. The FHA approval is very reassuring to the marketplace. Well, to buyers at least. The rest of us haven’t forgotten the downside to low down payments and easy money.
Oro Now Approved to Throw Money at Buyers [Curbed]
The Toren Holds First Closing, Wants in on FHA Program [Brownstoner]
The Edge Gets FHA Approval [Brownstoner]
Interesting point, Ditto. I wonder what home prices would look like in ‘tony’ parts of Brooklyn if it were 100% or bust.
If you’re getting a mortgage then you can’t afford to buy, you’re borrowing.
100% downpayments for all.
NSR, how would house prices adjust automatically under that scenario? Would it not just leave the home buying to the rich? Or am I missing something (quite likely! I’m no expert!).
If you require 20% downpayments, the market will adjust home prices accordingly.
Letting people put 3.5% down inflates housing prices and punishes people who are bad at math.
Agreed Snappy. Homes prices have reflected the average income for most of the past 100 years. I’m happy to wait for the bubble to deflate and rent as my rental is doing a much better job of keeping in line with incomes.
Requiring a 20% downpayment sounds great…but then you have to address home prices. As someone said earlier, for far too many people, 20% is impossible without making a withdrawal from the Bank of Mom and Dad. Home ownership should not be limited to those with the luck of intergenerational wealth. 20% would be very reasonable if and when home prices start reflecting the average income of the average person.
“i guess my point is that if you can afford your monthly mortgage, then it shouldn’t matter if you’re underwater.”
I completely agree. Then walking away becomes a choice rather than a necessity.
“the one thing that i like about the property that i bought my mom is that they require owners to put down 20% of the purchase price.”
Exactly. I would like to see those kinds of down payments again for the majority of transactions. Then I would consider buying again.
CG, you said it better than I could. Yes, it’s about buying more house than one can afford. Relying on programs designed to prop up an artificially high market without having saved appropriately is a recipe for disaster. When the shit falls in on you, you have no one to blame but yourself.
“But joe, that 100% uptick is possible.”
Again, it depends on your time frame. If I think that I am going to move in 5 years and my home has lost 50% of it’s value since I bought it, I’m out. I see now way for a 100% uptick in that time-frame.
If I bought a house, it has lost 50% of it’s value and I can rent one for EVEN LESS than what I would be paying if I bought today… then I will also walk away.
Both of those situations are, of course, dependent on my income. If I’m making a million bucks a year and my $400,000 house is now $200,000 than who cares. An extreme example to make a point…