Aug. 15, 2017

3 ways to make counteroffers easier

COCONUT CREEK, Fla. – Aug. 14, 2017 – No matter if your client is buying or selling, counteroffers can pose sticky negotiations from both sides. Here are three tips for successfully responding to counteroffers from Desare Kohn-Laski, broker-owner of Skye Louis Realty in Coconut Creek, Fla.

1. Ask for something in return
Sellers and buyers alike should remember that counteroffers are made because the other party wants something very specific they want in the transaction, Kohn-Laski says. For example, if your buyers find that appliances are not included in the seller's counteroffer, then your buyers might want to offer more money to include the appliances in their second offer.

2. Offer incentives
If you're on the seller side, your client could offer to pay the buyer's homeowners association fees for a specific period. "Capitalize on the primary truth that most buyers will need extra cash after the big purchase," Kohn-Laski says. Incentive ideas for buyers include interior repainting or a year of free lawn services. For sellers, covering moving costs or repair costs from an issue found during inspection could also be useful incentives.

3. Know when to split the difference
Meeting the other side halfway is usually a winning solution – an art that leads to closing deals, Kohn-Laski says. When a few thousand or few hundred dollars appear to be the hurdle, you can counter by offering to split the difference. For instance, if the list price is $435,000 and your buyer wants it for $430,000, split the $5,000 difference to achieve $432,500.

Source: Skye Louis Realty

© Copyright 2017 INFORMATION INC., Bethesda, MD (301) 215-4688

July 31, 2017

Bill would allow Canadian snowbirds to stay longer

WASHINGTON – July 28, 2017 – U.S. Rep. Ted Deutch (D-Florida) and Rep. Elise Stefanik (R-New York) introduced the "Canadian Snowbird Visa Act" into the U.S. House.

Under the bill – which would need to be passed by Congress and signed by the president to be law – Canadians would be allowed to stay an extra two months in the United States if they own or lease a home.

Deutch says the bipartisan measure would be good for business because Canadians visiting Florida add about $4.5 billion annually to the state's economy.

"If our chilly neighbors to the north want to spend more time on our warm Florida beaches, we should welcome them with open arms," Deutch says.

Canada is the top source of international visitors to Florida, but the numbers have been falling, according to Visit Florida, the state's tourism organization. Approximately 3.2 million Canadians visited Florida in 2016, down 15 percent from the previous year.

Existing law limits the amount of time a Canadian visitor may spend in the U.S. to 182 days per year – about six months. Deutch's bill would permit Canadians over the age of 50 who own or rent a U.S. residence to stay in the U.S. for an additional two months each year. They would be prohibited from working for a U.S. employer or collecting public assistance, and they would still be subject to the vetting process required by law.

Source: Fort Lauderdale Sun-Sentinel (07/28/17) Swisher, Skyler

July 24, 2017

NAR says it supports latest national flood insurance proposal

WASHINGTON – July 21, 2017 – The National Association of Realtors® (NAR) says that it now endorses the "21st Century Flood Reform Act" (H.R.2874) working its way through Congress.

NAR says that "significant improvements" in the legislation aimed at strengthening and reauthorizing the National Flood Insurance Program (NFIP) cleared the way for its endorsement.

Among the changes Realtors support is a commitment by the House Financial Services Committee to retain "grandfathering" – a policy that would protect homeowners from significant rate increases if flood maps change.

The latest draft of the bill also limits proposed increases to fees and rate hikes that policyholders faced under earlier versions of the legislation that included more dramatic cost increases for homeowners and eliminated grandfathering protections beginning in 2021.

NAR President William E. Brown thanked the House committee for working with Realtors to strengthen the bill and he announced NAR's support for it

"House Financial Services Committee Chairman Jeb Hensarling (R-Texas), as well as Subcommittee on Housing and Insurance Chairman Sean Duffy (R-Wis.), deserve high praise for working with Realtors to improve this legislation," Brown says. "The changes to the 21st Century Flood Reform Act will help give certainty to homeowners who have brought their property to code and have done their part to protect it against flood risk."

Brown called it a "fair and reasonable approach" that takes us one step closer towards reauthorization.

"This legislation protects taxpayers, as well as homeowners, which is no easy task," Brown adds. "The Sept. 30 reauthorization deadline still looms in front of us, and Realtors are eager to see this legislation progress quickly. Leaders on both sides of the aisle are well aware that this issue touches 22,000 communities – in every state, both coastal and inland. We're grateful for the committee's support and look forward to their continued efforts on behalf of homeowners."

© 2017 Florida Realtors

July 21, 2017

Florida's foreclosures down 56% in two years

IRVINE, Calif. – July 20, 2017 – According to ATTOM Data Solutions' Midyear 2017 U.S. Foreclosure Market Report, Florida's status as one of the nation's top foreclosure states has improved, and the foreclosure crisis continues to heal.

The Florida foreclosure rate dropped 34 percent in the first half of 2017 year-to-year, and it declined 56% since 2015. Florida, once the No. 1 foreclosure state, now ranks seventh.

Florida continues to have a lengthy foreclosure process, however, with only three other states –New Jersey, Indiana and New York – taking longer. Overall, it takes 3.3 years (1,203 days) to foreclose in Florida, the time between a first notice and a final foreclosure sale.

Nationally, foreclosures were down 20 percent year-to-year, and down 28 percent from the same time period two years ago, and the number of foreclosures in June alone dropped to the nation's lowest level since. November 2005.

"With a few local market exceptions, foreclosures have become the unicorns of the housing market: hard to find but highly sought after," says Daren Blomquist, senior vice president with ATTOM Data Solutions.

In addition, banks are buying fewer of the foreclosures that go to auction. "More than 38 percent of properties sold at foreclosure auction in the first half of this year went to third-party buyers rather than back to the bank – the highest share we've ever seen going back as far as 2000, the earliest this data is available," adds Blomquist.

The timeline for a U.S. foreclosure hit an all-time high, ATTOM reports. In the second quarter, it took an average 883 days from the first public foreclosure notice to complete the foreclosure process, up from 814 days in the previous quarter and up from 631 days in the second quarter of 2016. It's the longest timeline since ATTOM started tracking the data in 2007.

States with the longest average foreclosure timelines completed in Q2 2017 were New Jersey (1,347), Indiana (1,259), New York (1,255), Florida (1,203), and Illinois (1,059). States with the shortest average foreclosure timelines for foreclosures were Virginia (176 days), Alabama (295 days), Arkansas (301 days), Oregon (347 days), and North Carolina (374 days).

"Although foreclosures are fading overall, there has been a notable uptick in foreclosures completed by some nonbank entities – counter to the sharp downward foreclosure trend among big banks and government-backed loans," Blomquist notes. He says those "divergent foreclosure trends are likely the result of the big banks and government agencies selling off distressed loans over the past few years to nonbank entities that are now foreclosing on an increasing volume of that deferred distress."

June 29, 2017

NAR: 71% of owners say it’s a good time to sell

WASHINGTON – June 28, 2017 – Existing housing inventory has declined year over year each month for two straight years, but new consumer findings from the National Association of Realtors® (NAR) offer hope that the growing number of homeowners who think now is a good time to sell will eventually lead to more listings.

NAR's latest quarterly Housing Opportunities and Market Experience (HOME) survey also found that fewer renters think it's a good time to buy a home, however, and respondents are less confident about the economy and their financial situation than earlier this year despite continuous job gains.

The homeowner trend is gaining steam in the HOME survey, however. This quarter, 71 percent of homeowners think it's a good time to sell, which is up from last quarter (69 percent) and considerably more than a year ago (61 percent). Respondents in the Midwest (76 percent) surpassed the West (72 percent) for the first time to be the most likely to think now is a good time to sell.

There's an apparent mismatch between homeowners' confidence in selling and actually following through and listing their home for sale, says Lawrence Yun, NAR chief economist.

"There are just not enough homeowners deciding to sell because they're either content where they are, holding off until they build more equity, or hesitant, seeing as it will be difficult to find an affordable home to buy," Yun says. "As a result, inventory conditions have worsened and are restricting sales from breaking out while contributing to price appreciation that remains far above income growth.

"Perhaps this notable uptick in seller confidence will translate to more added inventory later this year," Yun adds. "Low housing turnover is one of the roots of the ongoing supply and affordability problems plaguing many markets."

On the decline: Renter morale

Confidence among renters that now is a good time to buy a home continues to retreat. Fifty-two percent of renters think it's a good time to buy, which is down both from last quarter (56 percent) and a year ago (62 percent). Conversely, 80 percent of homeowners (unchanged from last quarter and a year ago) think now is a good time to make a home purchase. Younger households and those living in urban areas and in the costlier West region are the least optimistic.

The surge in economic optimism seen in the first quarter of the year appears to have been short lived. The share of households believing the economy is improving fell to 54 percent in the second quarter after soaring to a survey high of 62 percent last quarter. Homeowners, and those living in the Midwest and in rural and suburban areas, are the most optimistic about the economy. Only 42 percent of urban respondents believe the economy is improving, which is a drastic decrease from the 58 percent a year ago.

Dimming confidence about the economy's direction is also leading households to dampen previously strong feelings about their financial situation. The HOME survey's monthly Personal Financial Outlook Index on respondents' confidence that their financial situation will be better in six months fell to 57.2 in June after jumping in March to its highest reading in the survey. A year ago, the index was 57.7.

"It should come as little surprise that the confidence reading among renters has fallen every month since January (64.8) and currently sits at its lowest level (53.8) since tracking began in March 2015 (65.7)," says Yun. "Paying more in rent each year and seeing home prices outpace their incomes is discouraging, and it's unfortunately pushing homeownership further away – especially for those living in expensive metro areas on the East and West Coast."

Fewer respondents believe homes are affordable; 1 in 5 would consider moving

In this quarter's survey, respondents were also asked about the affordability of homes in their communities. Overall, only 42 percent of respondents believe they are affordable for almost all buyers, with those living in the Midwest being the most likely to believe homes are affordable (55 percent) and West respondents (29 percent) being least likely to think homes are affordable.

Additionally, 20 percent of respondents would consider moving to another more affordable community. Those earning under $50,000 annually (27 percent) and those age 34 and under (29 percent) were the most likely to indicate they would consider moving.

"Areas with strong job markets but high home prices risk a migration of middle-class households to other parts of the country if rising housing costs in those areas are not contained through a significant ramp-up in new home construction," says Yun.

© 2017 Florida Realtors

June 23, 2017

Long-term mortgage rates down slightly this week

WASHINGTON (AP) – June 22, 2017 – Long-term U.S. mortgage rates dropped slightly this week.

Mortgage buyer Freddie Mac says the benchmark 30-year, fixed-rate mortgage averaged 3.90 percent, down from 3.91 percent last week. The rate stood at 3.56 percent a year ago and averaged a record low 3.65 percent in 2016.

The 15-year, fixed-rate home loan, popular with homeowners seeking to refinance their mortgages, also blipped lower – to 3.17 percent from 3.18 percent. A year ago, the 15-year rate was 2.83 percent.

The rate on five-year, adjustable-rate mortgages decreased to 3.14 percent from 3.15 percent. It was 2.74 percent a year ago.

Mortgage rates have remained low even though the Federal Reserve has been raising short-term rates: The Fed last week ratcheted rates higher for the third time in six months.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fees on 30-year, 15-year and five-year adjustable mortgages were unchanged at 0.5 point.

June 19, 2017

The zero-down loan? It’s making a comeback

NEW YORK – June 16, 2017 – Buyers may soon be able to bring less to closing. They were blamed for precipitating the housing crisis years ago, but major lenders are giving no- and low-downpayment loans another shot.

Several major lenders are reportedly offering loans with just 1 percent down. Navy Federal, the nation's largest credit union, offers its members zero-down mortgages in amounts up to $1 million. NASA Federal Credit Union markets zero-down mortgages as well.

Quicken Loans, the third highest volume lender, offers 1 percent downpayment options, as does United Wholesale Mortgage. And the Department of Veterans Affairs has offered zero-down loans to eligible borrowers for many years.

Also, Movement Mortgage, a large national lender, has introduced a financing option that provides eligible first-time buyers with a non-repayable grant of up to 3 percent. As such, applicants can qualify for a 97 percent loan-to-value ratio conventional mortgage, which is basically zero from the buyers and 3 percent from Movement. For example, on a $300,000 home purchase, a borrower could invest zero personal funds with Movement providing $9,000 down. The loan also allows sellers to contribute toward the buyer's closing costs.

So far, the delinquency rates on these low- to zero-down payment loans have been minimal, according to lenders. Quicken Loans says its 1 percent down loans have a delinquency rate of less than one-quarter of 1 percent. United Wholesale Mortgages told The Washington Post that it has had zero delinquencies from the borrowers on its 1-percent down loan since debuting it last summer.

For Movement's new loan product, the lender will originate the loans and then sell them to Fannie Mae, which remains under federal conservatorship. Fannie officials released the following a statement:

"(We're) committed to working with our customers to increase affordable, sustainable lending to creditworthy borrowers. We continue to work with a number of lenders to launch (test programs) that require 97 percent loan-to-value ratios for all loans we acquire." They add that there "is no commitment beyond the pilots," which are "focused on reaching more low- to-moderate income borrowers through responsible yet creative solutions."

During the housing crisis, zero-down loans were among the biggest losses for lenders, investors and borrowers. However, housing experts say the latest versions are different from years ago. Applicants must now demonstrate an ability to repay what's owed. They also must have stellar credit histories and scores, and lenders require a lot more documentation to prove borrowers are in good standing.

Also, many of the programs are charging higher interest rates. For example, Movement's rate for its zero-down payment option in mid-June was 4.5 percent to 4.625 percent, compared with 4 percent for its standard fixed-rate mortgages.

Some critics say that the borrowers who really could benefit from such options aren't able to qualify for them. Paul Skeens, president of Colonial Mortgage Corp. in Waldorf, Md., told The Washington Post that "it seems like people without excellent credit scores and three months of [bank] reserves don't qualify."

June 16, 2017

The Craigslist scam: Still around, still a problem

ST. AUGUSTINE, Fla. – June 15, 2017 – An apparent scam that has been making the rounds on Craigslist recently could catch people who are looking for a cheap place to rent, but officials and industry professionals say there are plenty of red flags that should warn them off.

"It's just this crazy scam where people take our listings from online and use our photos," Endless Summer Realty broker Robin Arnold said.

A property he has listed was a subject in one of two email conversations provided to the St. Augustine Record in which a potential renter responded to an ad on Craigslist and got a suspicious response. In both cases, the homes advertised on the popular listing site turned out to be for sale and the emailed answer to the initial inquiry was written by someone posing as the legal owner with a story about why he or she was out of town and would have to conduct any transaction over email.

The ads, though, contained pictures and well-written descriptions of the homes.

Noah Bailey, an agent with RE/MAX who was the listing agent on the other house, said those things are pretty easy to get from online listings.

"They basically just take your verbiage, take your pictures," he said. "It's something that's pretty common."

Both men said they were aware that their listings had become subjects of the scam and had either reported it to the owner of the property or to Craigslist.

"Typically, we are the first person to get the heads up," Bailey said.

Arnold said this is the only one of his properties that has been used in the scam recently, though he recalled a rash of them a couple of years back. Bailey said his listings seem to get used about two to three times a year.

This month, Arnold had received about 25 calls on his current listing from people interested in renting the home.

"They'll pull it up and go do a drive-by and see my sign in the yard," he said, adding that he lets the callers know the ad was a potential scam and tries to educate them about what to watch for.

Though the email chains provided to The Record never progressed to discussion about an exchange of money, Bailey said the scammer will likely promise to mail keys in exchange for a wired deposit.

The emailed answers both contained the legal property owners' names, though they appeared to be copied and pasted from online tax records because they were inserted into the email, by way of introduction, in all capital letters with the last names appearing first.

Both men said things like that are among the many warning signs on the path to an exchange of money that should scare people off.

The to-good-to-to-be-true, advertised rates are too, they said. In both cases, the homes listed had three bedrooms and were in desirable neighborhoods and carried advertised rates of under $1,000, with one as low as $750.

Bailey said he wasn't aware of anyone actually falling for the scam and that the people he interacts with typically catch on once they realize the house is actually for sale when they see his sign.

"Most people, I think, kind of wise up when they see something like that," he said.

But St. Johns County Sheriff's Office spokesman Cmdr. Chuck Mulligan said some people have fallen for similar ads. Though he had no recent example of long-term rental scams, he said he could recall about three or four instances in the past two years where someone lost money after paying a deposit or advance rent when responding to a fake vacation rental ad. Those homes are typically advertised for shorter stays for people coming from out of town.

"And then they get here and find out that the homeowners are there and the homeowners are not the ones that advertised the property," Mulligan said.

Another variation that was common, he said, were scams involving foreclosed-on properties during the recession.

Mulligan said people that are looking for rentals on Craigslist or any e-commerce site should always look for warning signs and take steps to protect themselves. First, he said, Florida has very open public records laws, and it is easy for people to determine who the legal property owner is.

"They should do some of that research," he said, and suggested they search for the address online and see if it is listed for sale.

Mulligan also warned that any transaction in which the person asks that money be wired via Western Union or any other service, or asks for payments in an unusual form, like a gift card, should also raise suspicions.

Another warning sign can be the tone of the email.

Most of the scams, Mulligan said, originate from outside the country and the person composing the response is usually not a native English speaker, and they often give themselves away with awkward word usage.

If any of those things pop up throughout the course of a transaction, Mulligan said, people should think twice before they part with their money. "They should pause and then do some more research to ensure they are actually dealing with the homeowner," he said.

Though Craigslist does provide a way for users to flag ads as spam or "prohibited" no one at the organization responded to an email requesting information about how that process works and how ads get taken down.

June 9, 2017

86 Millennials may see a 2017 home-buying turnaround

WASHINGTON – June 8, 2017 – Housing advocates have been wringing their hands as they watch the nation's homeownership rate slowly slip during the Great Recession from 70% to less than 64% today.

Homeownership in America dipped to 63.6% in the first quarter of 2017, virtually unchanged from 63.7% the fourth quarter of 2016. The homeownership rate was 63.5% in 2015, according to the U.S. Census Bureau's recent Quarterly Housing Vacancies and Homeownership report.

However, the future growth of homeownership potentially lies in a different statistic buried in the sea of housing data gathered by Uncle Sam, experts say.

An analysis of the Census report by Trulia determined that owner households formed at double the rate of renter households in the first quarter of 2017. This is a clue that points to the possibility of a Millennial homeownership turnaround this year after a decade of gradual decline, Trulia concluded.

"Strong renter formation is one of the reasons why the homeownership rate has continued to drop since the onset of the housing crisis, so any sign this trend is reversing is something to take note of," said Ralph McLaughlin, chief economist at Trulia.

One of the major impediments to homeownership is the inability for young Millennial renters to afford a down payment.

Seventy percent of renters recently surveyed by Zillow said saving for a down payment is more of an issue than debt on the path to becoming a homeowner. Millennial home buyers are typically buried in college loan debt.

The Midwest held the highest homeownership rate in the first quarter, at 67.6%, while the West held the lowest at 59%, the Census report shows.

Homeownership rates in the first quarter were also highest among homeowners aged 65 and older, at 78.6%, and lowest for homeowners aged 35 and younger, at 34.3%.

Here are other findings of the Census report:

  • Non-Hispanic White Alone homeowners, as defined by the Census, held the highest homeownership rate in the first quarter, as well: 71.8%. (The concept "race alone" includes people who reported a single race alone-for example, Asian-as opposed to more than one race.)
  • Asian, Native Hawaiian and Pacific Islander Alone homeowners held the second-highest homeownership rate at 56.8%.
  • The Hispanic homeownership rate in the first quarter was 46.6%, according to the report. In 2016, the Hispanic rate markedly rose for the second straight year-a new emerging trend.
  • African-American homeowners held the lowest rate at 42.7%, though still higher than the year prior.

The homeowner vacancy rate was 1.7% in the first quarter, while the renter vacancy rate hit seven percent, the Census report shows.

Homeowner vacancy rates were highest outside metropolitan statistical areas (MSAs) and inside principal cities at 2.2%, followed by in suburbs at 1.3%.

Renter vacancy rates were also highest outside MSAs at 8.7%, followed by inside principal cities at seven percent and in suburbs at 6.5%.

According to the report, 87.3% of the nation's housing was occupied in the first quarter, with 55.5% owner-occupied and 31.8% renter-occupied.

The median asking sales price for vacant for sale housing in the first quarter was $176,900. The median asking rent for vacant for rent housing, over the same period, was $864.

Regardless of the Census data, a survey by the National Association of Realtors (NAR), reported that nearly eight out of 10 Americans still believe that buying a house makes good financial sense.

Here's why:

″ Long-term wealth. Owning a home is one of the best ways to build long-term wealth. Historically, a homeowner's net worth has ranged from 31 to 46 times that of a renter, reports the Federal Reserve Survey of Consumer Finances. Homeownership today still represents a family's primary means of financial advancement.

″ Freedom. Homeowners are free to renovate, redecorate and modify their homes as they wish. If you want to paint the walls or make a simple landscaping change, there isn't a landlord to stop you.

″ A family investment. For many, homeownership is a lifestyle choice-a place to raise a family, build memories and be part of a larger community.

Breakout: Finding out more about millennials

Want to know how to reach millennials as potential clients? Be sure to attend the ed session, "Delighting Our Millennial Customers," on Aug. 16 at Florida Realtors 2017 Convention & Trade Expo.

June 5, 2017

Homebuyers: How to win the downpayment challenge

LOS ANGELES – June 2, 2017 – Saving up for a downpayment is the biggest hurdle for many would-be homebuyers, particularly those looking to make the leap from renting to owning.

More than two-thirds of renters consider setting aside money for a downpayment the No. 1 obstacle to buying a home, according to a recent survey by real estate data provider Zillow. That edged out other concerns, including job security and a thin supply of homes on the market.

While there are home loans that require as little as 3 percent down, rising home prices, especially in expensive coastal states, keep driving up the amount of money buyers need to come up with for a downpayment.

Even so, many first-time buyers are managing to save enough on their own. Some 76 percent used their savings to fund their downpayment last year, according to the National Association of Realtors.

Here are some tips to consider when working toward that downpayment on a home:

Start soon
Begin saving now. Renters may want to calculate what their extra monthly costs would be as a homeowner and then set aside that amount, minus rent and utilities. This accomplishes two goals: Saving money for a downpayment and getting you accustomed to the financial constraints of living with the costs of homeownership.

Another strategy that may help: open a separate savings account just for your downpayment. That will help lessen the temptation of using the funds for something else.

You'll also have to set aside money for closing costs, which can run into the hundreds or thousands of dollars.

Weigh loan options
The type of home loan you get may determine how much of a downpayment you need. For many years, buyers sought to put down 20 percent of the purchase price. That would lower their monthly mortgage payment and allow them to avoid having to pay for private mortgage insurance, or PMI. But as home prices have risen, that trend has waned. Loans that require as little as 3 percent up front have become more common. As a result, the median U.S. downpayment has declined to 10 percent the past four years, according to the NAR.

"The housing market is not a matter of 20 percent downpayment or bust," said Greg McBride, chief financial analyst at Bankrate.com. "You can get into a house with a low downpayment, but you're going to have to come up with the money for closing costs."

Lenders offer loans backed by government mortgage companies Fannie Mae and Freddie Mac that require only a 3 percent downpayment. Borrowers can ask to have their PMI waived once the equity in their home reaches 20 percent.

Borrowers with less-than-sterling credit may have a better shot qualifying for loans backed by the Federal Housing Administration. The FHA's program requires 3.5 percent down, but borrowers have to refinance once their equity grows above 20 percent in order to get out of paying PMI. Until then, PMI is tax-deductible.

Buyers may not need to save for a downpayment at all if they are U.S. military veterans, service members or residents of certain rural areas. The Department of Veterans Affairs and the U.S. Department of Agriculture have zero-downpayment loan programs for qualified borrowers.

Explore other options
Saving for a downpayment sometimes takes more than cutting back on dining out or travel. A quarter of first-time homebuyers in 2016 used gift money from relatives or friends to round out their downpayment, according to the NAR. And more than 10 percent tapped their retirement savings without the usual hefty penalties for an early withdrawal. Of course, before withdrawing money from your 401(k) or IRA accounts consider that a big withdrawal will mean your retirement savings won't grow as swiftly.

Borrowers with low or moderate income, and teachers, firefighters or other public service job holders, may also qualify for downpayment assistance through thousands of federal, state or local programs aimed at helping homebuyers.

There are more than 2,100 funded programs, many of which help cover the downpayment and closing costs through loans that can sometimes be forgiven over time, or paid back only once the buyer sells the home, according to Downpayment Resource, a tracker of homebuyer assistance programs.

Consider using home equity
A newer approach to coming up with a downpayment involves letting investors put up some of the money in exchange for a slice of the potential value in the home.

San Francisco-based Unison now has a program available in 12 states and the District of Columbia that offers to match up to half of a 20 percent downpayment on a home. The match isn't a loan, in that the buyer doesn't have to make payments, but still benefits from the lower cost of making a 20 percent downpayment.

There are several payback scenarios, but essentially the company collects a 35 percent share of the gain, if any, in the sale of the home. Should the home decline in value, the company also shares in the loss, potentially receiving less money back on its original investment.

If the homeowner hasn't sold the home after 30 years, a property appraisal is used to determine how much Unison gets paid. The homeowner also has the option to buy out Unison any time after their third year in the home. Unison also doesn't share in the equity that the homebuyer builds as they pay down their mortgage or from investments, like a kitchen remodel.

"There's a very clear trade off here in that you are surrendering future equity," said McBride, noting that home equity is increasingly becoming Americans' principal way to fund their retirement. "So, look yourself in the mirror and make sure that you're not potentially shortchanging your future financial security just to get into a slightly more expensive home now."

The possibility of losing a big slice of her home's future value didn't put off Courtney DeAnda from using Unison to double the $52,000 downpayment on a home this month.

She and her husband, James, who have three kids, recently entered escrow on a five-bedroom, three-bath house in Vacaville, California, for $468,000. The couple expects to save $417 a month on their mortgage payment by using the Unison program.

"It's a price to pay to help us get into a home that we really love," said DeAnda, 28. "We really don't see much of a negative with using it."