MReport March 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

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40 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T ORIGINATION THE LATEST More Help Available for Homebuyers in 2016 The number of down payment assistance programs is on the rise. D own Payment Resource, a nationwide databank for homebuyer pro- grams, released its Q 4 2016 Homeownership Program Index (HPI). The HPI revealed that the number of total down payment assistance programs increased to 2,463, which is a 2.8 percent increase from Q 3 2016. Down payments remain a con - cern among many potential home- buyers, and to stop homeowners from tapping into retirement funds, down payment programs have provided relief for those who are in need of assistance. The press release sources the National Association of Realtors Profile of Home Buyers and Sellers, which stated that 14 percent of first-time homeowners either used loans or disbursements from their 401k or IRA accounts for down payments last year. However, approximately 3 percent of homeowners are uti - lizing resources available to them, such as down payment assistance programs. Rob Chrane, CEO of Down Payment Resource, commented on the future of down payment programs and the significance they hold for first-time homebuy - ers. "Homeownership program availability and funding remain strong in 2017. With recent increases in the mortgage interest rate and no reduction of the FHA mortgage insurance premium, entry level homebuyers will need access to important down payment programs that can help them save," he said. The HPI also experienced an increase in Mortgage Credit Certificates (MCCs) across the na - tion, which represents more than 8 percent of all programs. Data from National Council of State Housing Agencies (NCSHA) shows that state housing finance agencies increased MCC issuances to home - buyers by more than 400 percent between 2010 and 2015, according to the report. Currently, there are 200 different MCCs available in the United States, which is up from 190 in the previous quarter. The report also stated that 93 of the MCCs are available statewide and 107 are available in a defined local market, while 37 states contain either a statewide MCC or another type of local MCC. Chrane encouraged homeown - ers to become aware of MCCs and the impact they have on their financial status. "The mortgage interest rate tax deduction has long been a core homebuyer benefit, but most homebuyers are unaware of Mortgage Credit Certificates. This credit directly impacts a homebuyer's bottom line by reducing their annual tax bill," he said. "We see more lend - ers adding MCCs to their product offerings." The report stated that Texas, California, and Florida contain the greatest number of MCCs. Putting Off Home Purchases Nonhomeowners increasingly thought it was not a good time to buy a home over the course of 2016. A survey indicated that 2016 was perceived as a poor time to buy a home, with large numbers of individuals stating that they wanted a home but believed it was not the best time to buy. The 2017 National Association of Realtors Aspiring Home Buyers Profile, released in February, showed that each quarterly survey in 2016 received increas - ingly negative results in regards to whether it was a good time to buy a home. Sixty-three percent of non - homeowners, defined as those individuals who rent or live with friends or family rent free, said in Q1 2016 that it was a good time to buy a home. By the fourth quar - ter, 55 percent of nonhomeowners thought it was a good time to buy a home. This did not cause non- homeowners' desires of eventu- ally owning a home to diminish, as an average of 86.5 percent of respondents said they planned on owning a home in the future. Homeowners viewed the situ - ation quite differently, with 82 percent of respondents indicating that they thought Q1 2016 was a good time to buy a home. That figure dropped to 78 percent by the end of the year. Both groups firmly believed that owning a home was part of the American Dream. An annual average of 80 percent of nonhomeowners said in 2016 they thought owning a home was part of the American Dream, while 92 percent of homeowners on average said that they thought the same. But if 86.5 percent of nonhome - owners stated they wanted to buy a home in the future, what was holding them back from actually purchasing a home? An average of 53 percent of nonhomeowners stated in 2016 that the largest barrier preventing them from buying a home was simply that they could not afford it. The next highest reason, with an average of 21 percent citing this as the cause of their lack of home - ownership, was that they needed the relative flexibility of renting rather than being burdened with owning a home.

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