Trump Nation suspends FHA rate cuts

Accountant · San Francisco, CA · Member since 2016 · 41 posts · 17 votes

Today was President Trump's inauguration. The administration wasted no time and has halted one of Obama's last minute legislations to cute PMI rates. Correct me if I'm wrong, but I thought Trump is pro-real estate? Isn't this hurtful towards (prospective) real estate investors?

http://money.cnn.com/2017/01/20/real_estate/trump-...

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Michael Hayworth

Contractor · Fort Worth, TX · Member since 2015 · 379 posts · 740 votes

Originally posted by @Garmeon Y.:

@Mike Reynolds Not familiar with those places, but I keep hearing how Texas is such a great place to invest. I have a couple friends down there. I get the impression y'all Texans don't appreciate us Californians migrating there in droves.

Garmeon, it's not that we mind all you Californians, New Yorkers, Illini & such moving down here. (I interview several folks every month from those states.) It's that when most of you get here, you start voting for the same big-government crap that f-ed up your own economies in the first place.

No, we don't have a state income tax.
No, you don't need a license to be a painter.
No, you don't even need a license to be a GC. Yes, our construction quality is just fine, thanks. And yes, we've seen some of the rickety **** built by y'all's licensed GCs.
No, most small construction companies don't carry workers' comp. No, there's not an epidemic of people dying or being maimed on jobs.
Yeah, you do require a permit to remodel a bathroom, but no, we generally don't get too bent out of shape if somebody does it without one. Just don't be obnoxious about it so the city or the local inspector feels like he has to roll up on your job.
Yes, we have big job growth here. Yes, there are reasons for that.

Texas works really well. We'd like to keep it that way. All y'all are welcome here, just understand we don't want to be California. :)

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Mike ReynoldsPro Member
construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
9y
@Garmeon Y. I saw that too. I don't do FHA so I cant say how that will affect those loans.
0 Reply
Garmeon Y.
OP
Accountant · San Francisco, CA · Member since 2016 · 41 posts · 17 votes
9y
@Mike Reynolds why not FHA? Isn't that where the magic happens?
1 Reply
Christian Street
Investor · Columbus, OH · Member since 2016 · 1 post · 8 votes
9y
I saw the likely same article making its rounds today as well. As I understand it Trump did not target the PMI rate adjustment directly. Rather he halted all pending federal regulations so that they may be reviewed. I believe this is common practice during a transition. I would not be surprised to see the adjustment proceed once it has been reviewed.
8 Reply
Mike ReynoldsPro Member
construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
9y
@Garmeon Y. There is that I know. The house I live in me and my father built. I was a teenager.
I know, you are not supposed to be romantic about a house but I will probably die in this one. I will probably even build some more cabinets this summer in my shop. Thinking quarter sawn white oak for being impervious to water and just.....different on the grains.
Is there any way to do an FHA and not live there? I would do it in a heartbeat. Otherwise I will have to plug away the hard way lol.
Didn't the rate drops never really come into effect yet that were cancelled? I looked a bit and that what I saw but I don't believe everything I read online. I would much rather believe an accountant than a reporter.
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Garmeon Y.
OP
Accountant · San Francisco, CA · Member since 2016 · 41 posts · 17 votes
9y
@Mike Reynolds Sounds dreamy and morbid at the same time. Die with or die in the house?
My understanding is you don't have to permanently live in a home that's FHA financed.
And yes, the rate cuts never went into effect.
1 Reply
Mike ReynoldsPro Member
construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
9y
@Garmeon Y. LOL...understood but I hit my finger with a hammer many time on this house. Doesn't that count for something?
My wife and I are in disagreement with our retirement house. I want Panama and she wants Corpus.
Don't tell her but if its Corpus I would prefer Rockport instead and maybe I will sway her but I will try for Panama first and work backwards.
Otherwise my son will get this one and do with it what he will. There will be no restrictions on him.
0 Reply
Garmeon Y.
OP
Accountant · San Francisco, CA · Member since 2016 · 41 posts · 17 votes
9y
@Mike Reynolds Not familiar with those places, but I keep hearing how Texas is such a great place to invest. I have a couple friends down there. I get the impression y'all Texans don't appreciate us Californians migrating there in droves.
0 Reply
Garmeon Y.
OP
Accountant · San Francisco, CA · Member since 2016 · 41 posts · 17 votes
9y
@Christian Street Definitely. Trump doesn't want Obama to get one by him. The President thinks the former President gave him a difficult transition.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Garmeon Y. good place to invest is TExas as long as you live there.. you get the benefit of no income tax to supplement your sky high property tax's in Texas.. buy and hold can be challenge there if you are not a resident... prop taxs shifting foundations.. etc etc..
But the prez just raised military pay so more vets will be able to buy better houses and or more houses.
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Mike ReynoldsPro Member
construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
9y
Originally posted by @Mike Reynolds:

@Garmeon Y. LOL...understood but I hit my finger with a hammer many time on this house. Doesn't that count for something?
My wife and I are in disagreement with our retirement house. I want Panama and she wants Corpus.
Don't tell her but if its Corpus I would prefer Rockport instead and maybe I will sway her but I will try for Panama first and work backwards.
Otherwise my son will get this one and do with it what he will. There will be no restrictions on him.
There are some like that for sure. Most of the ones I have met are really nice neighbors. its kinda funny to watch them at first. They are all in a hurry like there is no tomorrow. After about a year or so they slow down and even start to get an accent.
0 Reply
Account Closed
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
9y
@Garmeon Y. Texas can be a great place to invest. Many Texans do not like the people from California moving here. They tend to find common ground when they figure out the person from California does not like the people from New York moving here.
When I was a child my grandmother would say... "The difference between a Yankee and a damn Yankee is simple... a Yankee is someone born North of the Red River and a damn Yankee is someone born North of the Red River that comes here."
2 Reply
Michael Hayworth
Contractor · Fort Worth, TX · Member since 2015 · 379 posts · 740 votes
9y
Originally posted by @Garmeon Y.:
@Mike Reynolds Not familiar with those places, but I keep hearing how Texas is such a great place to invest. I have a couple friends down there. I get the impression y'all Texans don't appreciate us Californians migrating there in droves.
Garmeon, it's not that we mind all you Californians, New Yorkers, Illini & such moving down here. (I interview several folks every month from those states.) It's that when most of you get here, you start voting for the same big-government crap that f-ed up your own economies in the first place.
- No, we don't have a state income tax.
- No, you don't need a license to be a painter.
- No, you don't even need a license to be a GC. Yes, our construction quality is just fine, thanks. And yes, we've seen some of the rickety **** built by y'all's licensed GCs.
- No, most small construction companies don't carry workers' comp. No, there's not an epidemic of people dying or being maimed on jobs.
- Yeah, you do require a permit to remodel a bathroom, but no, we generally don't get too bent out of shape if somebody does it without one. Just don't be obnoxious about it so the city or the local inspector feels like he has to roll up on your job.
- Yes, we have big job growth here. Yes, there are reasons for that.
Texas works really well. We'd like to keep it that way. All y'all are welcome here, just understand we don't want to be California. :)
13 Reply
Darren Budahn
Investor · Milwaukee, WI · Member since 2014 · 811 posts · 420 votes
9y
Yeah that California economy which by itself would be the 6th largest in the world is really struggling now. Lol. Compare what happened in CA with increased taxes and spending with what's happened in Kansas since they drastically cut spending and taxes.
1 Reply
Andrew Auger
Real Estate Investor · Framingham, MA · Member since 2014 · 44 posts · 21 votes
9y
Halting of the rate cuts is a huge blow to me personally and to first time home buyers everywhere who are close to purchase. In my case it's an additional $105 per month. We are closing on our first multifamily home and would have benefitted from the reduction, now not so much. Add to the fact Trump wants to limit mortgage interest deduction and remove 1031 exchange, both huge reasons to be involved in real estate, his presidency is already looking grim, and that doesn't even consider his social policies, just what's relevant to this community.
2 Reply
David Krulac
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
9y
@Garmeon Y.
FHA is for owner occupants exclusively, so its not a program fro real estate investors and even for owner occupants only applies to 1-4 units, more than that don't qualify.
1 Reply
Bart H.
Dallas, TX · Member since 2016 · 1k+ posts · 745 votes
9y
Originally posted by @Darren Budahn:

Yeah that California economy which by itself would be the 6th largest in the world is really struggling now. Lol. Compare what happened in CA with increased taxes and spending with what's happened in Kansas since they drastically cut spending and taxes.
Or we could compare it to Illinois who is easily the leading loser of population in the country.
2 Reply
Andrey Y.
Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Jay Hinrichs:

@Garmeon Y. good place to invest is TExas as long as you live there.. you get the benefit of no income tax to supplement your sky high property tax's in Texas.. buy and hold can be challenge there if you are not a resident... prop taxs shifting foundations.. etc etc..
But the prez just raised military pay so more vets will be able to buy better houses and or more houses.
He raised military pay? Could you elaborate on the specifics of this.
1 Reply
Paul Sofia
Lender · Charlotte, NC · Member since 2016 · 372 posts · 172 votes
9y
I believe these are blanket actions to stop all of Obama's 12th hours orders. Trump's team will review them all and decide if good or bad for the US. I don't think this is specifically targeted, every single one of Obama's 12th hours Ex orders are being rescinded. Trump team said they had to make this public and do it as BHO is leaving land mines for Trump. Take a deep breath and let the man settle in.
5 Reply
Amy A.
Portland, ME · Member since 2012 · 616 posts · 550 votes
9y
According to recent articles in the Wall St. Journal, FHA loans are much more likely to default and cost taxpayers money. They should pay for that additional risk. Heck, some people approved for FHA loans have lower credit scores than I'd accept for a tenant! It's also absurd to give people loans who have such little skin in the game. As a flipper, I love FHA loans. As a taxpayer, not so much.
3 Reply
Sam Shueh
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
9y
the impact is minimum 0.25% of 417000=$28 bucks a month.....what is the big deal?
1 Reply
Elbert D.
Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
9y
Wait.....so Trump is going reduce the FHA loan rates??? If he is did he say to what rates? I also thought Trump was pro real estate.....well I hope he brings out some kind of business loans for investors. By the way did someone say he is also taking away the 1031?????? Why??????? He as as well as others have benefit from the 1031.
0 Reply
Shaun Sullivan
Keedysville, MD · Member since 2017 · 24 posts · 10 votes
9y
Originally posted by @Sam Shueh:

the impact is minimum 0.25% of 417000=$28 bucks a month.....what is the big deal?
might want to check your math on that. I'm happy the rate decrease has been suspended, but you're way understating the impact on a $417K loan... $87/month.
2 Reply
Chris Martin
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
9y
@Elbert D. What the person posted about 1031 elimination is fiction, as is his multi-family FHA loan. And this action has nothing to do with FHA loan rates, per se. It has to do with PMI (Private Mortgage Insurance) rates.
1 Reply
Elbert D.
Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
9y
ohhhh lol thanks for clarifying that. @Chris Martin
0 Reply
Paul Sofia
Lender · Charlotte, NC · Member since 2016 · 372 posts · 172 votes
9y
Originally posted by @Elbert D.:

Wait.....so Trump is going reduce the FHA loan rates??? If he is did he say to what rates?
I also thought Trump was pro real estate.....well I hope he brings out some kind of business loans for investors.
By the way did someone say he is also taking away the 1031?????? Why??????? He as as well as others have benefit from the 1031.
The Prez does not dictate interest rates.
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