The Housing Headline
Government agencies waive additional mortgage guidelines to keep approvals flowing for home buyers.
The News Behind The Housing Headline
Housing is the centerpiece of the economy so in March, the federal government deployed practical intervention programs to support U.S. housing.
In early-March, the Federal Reserve announced $800 billion to support functioning mortgage and bond markets, then increased its commitment to “as much as needed” mid-month.
The group also lowered the Fed Funds Rate to near zero percent, which reduces credit card payments for U.S. consumers by $583 million monthly.
Also, mid-month, the Treasury stepped in to help mortgage lenders fund more home loans during a period of tight cash flow.
Meanwhile, in response to national shelter-in-place and work-from-home mandates, the federal mortgage agencies have relaxed or waived a host of “standard” mortgage guidelines.
- Income tax transcript can be waived in some instances
- Employment verifications can be conducted via email
- Many home appraisals can be conducted via video
State legislatures are also involved, passing a flurry of “remote closing” legislation that lets buyers close curbside or from their homes using a camera-equipped computer.
Why This Housing News Matters To You
The government is doing whatever it takes to keep U.S. housing flowing.
One month ago, a virtual home appraisal would have been prohibited. Today, it’s standard. Three weeks ago, an emailed verification about your employment would have been rejected. Today, it’s commonplace.
Last week, waiving IRS tax transcripts to verify a buyer’a income would have been laughed at. Today, it’s the normal. The government is taking calculated risks to keep the housing market healthy.
You still need income to qualify for a loan, and you still need a job to be mortgage-approved.
The difference today is that there are fewer steps required to get to a closing and, when you get to it, your closing can be faster, easier, and less expensive.
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When home buyers ask “How much house can I afford?”, they’re asking a misdirected question.