Orlando Real Estate News

The FHA (Federal Housing Administration) has helped millions of Americans to get their dream homes in Central Florida, since 1934. The FHA does not provide home loans or set interest rates. It only provides mortgage insurance on loans from FHA-approved lenders, against defaults. And in case you didn't know...it's not just for first time homebuyers!

An FHA loan can be used to buy or refinance a new or existing single family house, a condo unit, or a manufactured or mobile home, provided that it is on a permanent foundation.  

What benefits does the FHA Loan Program offer to those buying a home in Orlando Florida?

The FHA Loan Program offers many benefits, including competitive interest rates, and a smaller down payment. It also offers easier qualification, and there is no need to have perfect credit. Greater Orlando area home buyers get more protection, helping them to keep their homes.

The FHA Loan Program is ideal for first-time home buyers in Central Florida, who are worried about qualifying for home loans. It is also suitable for non U.S. citizens, those who don't have perfect credit, and those who want to keep their monthly mortgage payment as low as possible.

People who are concerned about being able to pay their monthly installments, and are worried that they may go up, can also opt for the FHA Loan Program.

Need more information about Orlando Real Estate, the home buying process or the FHA loan program?  Contact your local Seminole and Orange County Realtor today for a consultation.

You need to work with a Professional who understands these differences and how your home compares to the current Real Estate Market, how best to present your home, and who guide you on the road to a successful home sale.

For information on great real estate buys in Orlando and nearby suburbs,
contact the Orlando Property Group, your short sale and luxury home specialists.

Or Search Now for Real Estate & Homes in the Orlando Florida Area

Looking for specific information regarding Orlando Florida real estate prices and communities? Get Your Free Market Snapshot

SOLD:  How to attract more Orlando Florida home buyers with seller financing

Like honey draws bees, creative financing can draw home buyers in Orlando Florida to the doorstep of your home for sale. Many Orlando area home buyers are motivated to buy but need help meeting mortgage-qualification rules, especially today. You can help a prospective home buyer finance the purchase of your house (and speed your sale) in several creative ways. 

Seller holds first mortgage.

When selling a home in Orlando Florida, you can lend the home buyer the money, pocket the interest payments, and hold the mortgage on the property, as long as there is no current mortgage. The tax benefits are you may be able to pay income tax only on a percentage of the principal and interest that you get each year. You probably will want a 20% down payment (to discourage default on the loan), and you'll need an attorney to draw up a deed of trust and promissory note.

Seller holds second mortgage

You can help fill the gap between other sources of financing and the sales price of the house. The second mortgage is usually for a smaller amount than a first mortgage but is riskier since it could be wiped out by defaulting on the first mortgage. Real Estate financing can be tricky, so be sure to have your interests legally protected by your attorney.

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If you've found your Orlando dream home, but don't have the money for a down payment, you may want to consider using a Central Florida down-payment assistance program to help make that dream come true.

What is down-payment assistance?

Down-Payment assistance is a program provided by non-profit organizations to help low-income families acquire the down payment, closing costs and other up-front expenses required to purchase a home. It may surprise you to know that almost one fifth of borrowers with an FHA mortgage utilize a down-payment assistance program.

The three most recognized non-profits offering down-payment assistance are AmeriDream Inc., Partners In Charity, and Nehemiah.

For first-time homebuyers, I should start at the beginning by explaining what a down payment is and why it is often required.  A down payment is money a home buyer must come up with out of his or her own pocket in order to qualify for a mortgage.  It is typically anywhere from 3% to 20% of the home's purchase price.  In the past, 20% was most commonly required, but to make home ownership more accessible, requirements have been relaxed.  Today with an FHA loan, the down payment can be as low as three percent.

Lenders require a down payment in order to reduce their risk of the borrower defaulting on the loan.  The more money someone has invested in their home, out of their own pocket, the less likely they are to just walk away.  Also, as we're currently seeing prices fall in many areas of Orlando, Central Florida and around the country, lenders want a down payment to ensure they are not lending more than what the home will be worth in 6 months.

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If you want to buy a home for the first time in Orlando or Central Florida, down payment assistance can make it possible for you to get the keys to your dream home right now! Many people searching for real estate in Orlando Florida want to buy a home to take advantage of the low interest rates that are prevailing now, but cannot save enough money to make the down payment.  

 Your lender, broker, banker, or Real Estate Agent will help you determine whether you qualify for government assistance in Orange, Seminole or other Central Florida counties, and to choose a suitable down payment assistance program.

Even if you have bad credit, you can still qualify for down payment assistance through special real estate loan programs. You can apply for these assistance programs, if you qualify for a loan, and can find a willing home seller.

When buying a home, you may not be able to qualify for government down payment assistance programs, due to bad credit, but you may still be able to get government assistance in the Orlando Florida area, if you have qualified for a low-interest fixed-rate loan.

Beware of the IRS If Your Creditor Writes Off or Settles a Debt

As more and more people throughout Orlando Florida are finding their sub-prime mortgage rates rise rapidly, a record number of foreclosures and short sales are occurring. A short sale is a great tool for many people experiencing hardship, however most people don't realize there are tax implications.  Here in Orlando, many people don't even know what a short sale is or how it can helm, so we like to prepare our clients for everything they may encounter, so they can be fully prepared. 

For more information on how a short sale can be conducted, or what other options are available, please feel free to visit our website at www.OrlandoPropertyGroup.com and contact us directly. We advise all of our clients to consult with their accountant or tax attorney to fully understand how saving their credit through a short sale will impact their tax liability.

Does Your Orlando Realtor Understand Short Sales

Many Orlando Florida real estate agents don't know the nuances of negotiating a short sale with the bank.  Make sure you use a Realtor that know's what they're doing.

The IRS may count a debt written off or settled by your creditor as income to you. An IRS regulation could cost you money if you settle a debt with a creditor. This rule may also shrink your wallet if a creditor writes off money you owe -- that is, ceases collection efforts, declares the debt uncollectible and reports it as a tax loss to the IRS. (26 U.S.C. § 108.) Debts subject to this regulation include money owed after foreclosure, property repossession or on a credit card bill you don't pay.

Under the IRS regulation, any financial institution that forgives or writes off $600 or more of a debt's principal (the amount not attributable interest or fees) must send you and the IRS a Form 1099-C at the end of the tax year. These forms are for the report of income, which means that when you file your tax return for the tax year in which your debt was settled or written off, the IRS will make sure that you report the amount on the Form 1099-C as income.

There are five exceptions stated in the Internal Revenue Code, three of which apply to consumers. So even if the financial institution issues a Form 1099-C, you do not have to report the income on your tax return if:

• the cancellation or write off of the debt is intended as a gift (this would be unusual)
• you discharge the debt in bankruptcy, or
• you were insolvent before the creditor agreed to settle or write off the debt.

The Internal Revenue Code does not define what is meant by insolvent. Generally, it means that your debts exceed the value of your assets. Therefore, to figure out whether or not you are insolvent, you will have to total up your assets and your debts, including the debt that was settled or written off.

If you conclude that your debts exceed the value of your assets, include IRS Form 982 with your tax return. You can download the form off the IRS's website. Completing it is simple.

If your debts are enormous and your bank or other financial institution is willing to settle for less than you owe, it could cost you a lot in the end. Before accepting what sounds like a deal, have a tax preparer calculate your tax liability. If your tax bill will be too high and you cannot prove you are insolvent, you may be better off filing for bankruptcy and discharging the entire debt, if possible.

If you plan to file for bankruptcy and want to include a debt that a creditor has settled or written off, talk to a bankruptcy lawyer -- preferably one who knows tax law. Some lawyers have concluded that on the day the creditor settles or writes off a debt, a "taxable event" occurs. This means that if you file for bankruptcy after that date, you cannot wipe out the debt unless your tax debt could be wiped out in bankruptcy. Other lawyers feel that the taxable event occurs on April 15, when your taxes are due, and that you can file for bankruptcy and wipe out the debt before that date, assuming it otherwise qualifies to be eliminated in bankruptcy.

Finally, bear in mind this fact: even if you don't get a Form 1099-C from a creditor, the creditor may very well have submitted one to the IRS. You can take the risk that the creditor did not pass the information on to the IRS and "forget" to list the income when you file your tax return. But if the IRS has the information, it will send you a tax bill, or worse, an audit notice, which could end up costing you more -- because of IRS interest and penalties -- in the long run.

Worried that you can't afford this tax liability?  Thinking that foreclosure may be a better option?  Think again!  Your tax liability from foreclosure would likely be much higher if the bank forecloses.