Archive for the ‘Legislation’ Category

What does the Lender need?

Tuesday, November 10th, 2015

loanapprovalWith the October 3 implementation of the Consumer Financial Protection Bureau’s regulations governing mortgages and lending, additional requirements fall upon the lender. Serious buyer generally are pre-approved before they look at property. Most professional agents will insure their buyer has met with a lender so the buyer will not be disappointed down the line if he/she cannot qualify for the house wanted.
The Arizona Association of Realtors® Pre-Qualification Form has basic information required by the lender. This includes whether the buyer has consulted with a lender and if not, the buyer must declare  he has not consulted with a lender yet by checking the appropriate box.   If this is the case, chances are the seller will not take any offer submitted by the buyer very seriously, or will require that the buyer talk with a lender before considering the offer.
The lender declares his company,his/her name plus the Arizona License and NMLS number,along with the address, e mail, phone and fax numbers, signature and  date. The buyer must also sign and date the Pre-Qualification form and the buyer’s  legal name must appear in the first lines of the Pre-Qual form.
The lender must indicate the buyer marital position; married, unmarried, or legally separated and note whether the buyer is relying upon the sale or lease of a property in order to qualify for the loan,  and/or  whether the buyer is relying upon seller concessions to close the loan.
The type of loan and whether it is a loan a primary or secondary residence, or a non-owner occupied residence such as a rental is necessary plus the type of property; Single Family Residence, Condo, Townhome, Manufactured Home, or Mobile Home.
The lender must provide any FHA loan buyer with the pamphlet, “For Your Protection: Get a Home Inspection” as well as discussing assets, liabilities, and income, then obtaine a Tri-Merged Residential Credit Report.
After these discussions, the lender will calculate how much loan the buyer can pre-qualify, and make an assumption of the monthly principal and interest plus mortgage insurance, property taxes, insurance, HOA due, and flood insurance.  The lender will stipulate that the monthly loan amount not exceed x dollars with an interest rate not to exceed a specified percentage and must indicate whethert the interest rate is fixed, adjustable, and if there is a pre-payment penalty.
The buyer will have to provide specific documentation and the lender will check off if this documentation has been received. Buyers should bring to the lender, the last two paystubs, W-2 forms, tax returns for the past two years, corporate tax returns if applicable, documentation of the down payment and any reserves required, documentation for all sources of gift funds, documentation of credit and liability, and any other paperwork the lender may require.
Once this is done, the lender will provide a loan status update to the Seller and the brokers within ten days of mutual acceptance of the contract.

Tell Me About Your Agent…

Monday, December 8th, 2014

Ask anyone to describe their image of a real estate agent and what do you hear?  I laugh when I hear big hair – the 1980’s; Cadillac, Realtor® car, Country Club lunches…because of course, the Realtor® belongs to a country club!  Oh and money… overflowing the pockets!

Real estate agents are not Realtors® but Realtors® are real estate agents.  Realtors® subscribe to the Code of Ethics of the National Association of Realtors® (NAR Code of Ethics ) and real estate agents do not.  There is a higher standard of care for clients when using a Realtor®.  Make sure your agent subscribes to a local Board of Realtors® because it offers you, the consumer, a higher standard of care.

When buying or selling what is probably your greatest asset, be sure you are dealing with a reputable person.  Generally that person will be a Realtor®.  He/she can guide you through the morass of paperwork and explain all that you are signing and why.  If that person shoves paper at you and doesn’t explain what you are signing, then you should not sign!  Ask to see the Code of Ethics.

Advanced designations are one way to cull Realtors®.  Beyond the normal continuing education units your agent must attend, that person understands the importance of knowledge which he/she can impart to the client and use to represent the client in a more professional manner.

Usually these designations are classes the agent must pay for out of his/her own pocket, take time to attend, and usually pass a test at the completion.   If your agent has a group of alphabets after his name, those are the designations.  Some are more prestigious than others.  Ask what these letters mean.

As the market begins to heat up, more and more people will go into real estate.  There is a perception that real estate is an easy career and the agent can make a huge income and just look at houses all day with people.  This is a myth!  Ask any successful Realtor®, the reality is far different!

So ask too, how long have you been in the market?  Remember, you are the employer and the Realtor is your employee.®

NAR President Guest of Arizona CRS Chapter…

Tuesday, January 12th, 2010
Vicki Cox Golder, National Association Realtors President in Tucson
Vicki Cox Golder, National Association Realtors President in Tucson

Vicki Cox Golder, President of the National Association of Realtors (NAR) told Realtors and guests NAR is providing resources for consumers as well as Realtors with the launching of  The resource gives consumers information about property ownership, information about such varied topics as installing new windows, becoming more energy efficient, to contractor scams and how to detect them.  The website, more than 20 pages, is a tool for Realtors and consumers alike and is a timely source of information.

Cox Golder spoke to members of the Arizona Council of Residential Specialists (CRS) and guests at the installation breakfast of the CRS 2010 officers in Tucson.  

Much of her time, Cox Golder  said, is spent testifying on the Hill, informing Congress of the importance of FHA, extending the tax credit, and positioning for higher conforming loan limits for areas of the country where property values are extremely high.  At present NAR is trying to make sure that the mortgage interest deduction on properties more than $250,000 will not be eliminated.  “Taxes in general are on the radar screen” she said, and the tax credits now expire April 30.

“Right Tools Right Now” is another new program NAR has launched, for Realtors and like a toolbox, it has a variety of “tools” which Realtors can use immediately.  These include the President’s weekly podcast, webinairs, as well as pamphlets and brochures which can be downloaded and used in presentation kits.

“NAR is listening to what you, the Realtors need, and especially now to stay in business,” the President said. She emphasized the need for advanced designations and continuing education.  In that vein,  there is Realtor University, on line classes designed to increase the standards and professionalism of the Realtor community.

NAR has also established a Realtor Credit Union where a $100 deposit will open an account.  Small loans can be taken from the credit union which may help some Realtors stay in business.

Cox Golder is the Owner of the Vicki L. Cox and Associates here in Tucson located on Golder Ranch Road.  Tucson is proud that she has become President of the National Association of Realtors.


NAR website

House Logic

Right Tools Right Now:

Arizona CRS:


MDIA Not Much Change For Ethical Lenders…

Wednesday, August 5th, 2009

   The new Mortgage Disclosure Improvement Act (MDIA) promulgated by the federal government is not much of a change for lenders who were ethical and disclosed costs initially;  but for those unscrupulous lenders who performed “bait and switch” during the home buying heyday, lamentations are rampant.

   “The purpose of the new Mortgage Disclosure Improvement Act is to insure buyers are fully aware of closing costs and interest rates which they will be charged on their mortgage loan,” said Courtney Walker, Vice President of Nova Home Loans.  “They don’t get to the closing table and are surprised by the numbers”, Walker continued.

   Within three days of applying for a loan, a full cost disclosure must be given to the applicant.  The cost disclosure must be given before any fees are collected, with the exception of any fee charged for pulling the consumer’s credit report, according to the amendment to Regulation Z, Truth in Lending.  Closing cannot take place for seven days unless specifically requested for an emergency.

   In the heyday, reputable lenders provided cost estimate sheets for their clients with the closing costs and loan costs spelled out, including the interest rate.  Good Realtors helped clients by providing clients with names of honest lenders and kept an eye on closing costs, making sure there were no pre payment penalties or other charges unless the client understood the terms of the loan. 

   This legislation comes as a result of the numbers of people who said they did not understand the terms of their loan and the loan costs, such as the option arm loans or the first 80% fixed rate loan with an adjustable rate for the second loan. 

    “The point of the MDIA is that whenever closing costs or interest rates change, the APR reflects these changes in the closing costs and interest rate.”  Walker gave the following example:  A person is offered a fixed rate and the APR is stated, and then offered a 2% rate with a $10,000 up front charge.  How does that person know which loan to choose?  “How are they going to compare an apple with an orange?  The APR will help do that”, Walker said.

   Under the new legislation, if the APR moves 1/8 of a point either up or down, the lender must redisclose to the client “to insure that the buyer is fully aware”.  The borrower must be given a reasonable amount of time to review the new numbers.   “The buyer must receive, review and acknowledge in writing the new disclosure”  and if the new numbers are not approved, then the buyer must change courses. 

    Escrow fees are included in the APR so it is important that the Title Company named in the buyer contract documents is not changed.  Title companies in the Phoenix area charge different rates than the title companies here in Tucson.  For people purchasing foreclosure or short sale properties, any costs the buyer pays, such as allowable seller closing costs, must be included in the APR. 

    If the market moves tremendously, and interest rates go down, redisclosure is mandated, even if to the borrower’s advantage.  Lenders cannot collect upfront fees from borrowers at the time of application.   These include appraisal fees and lock in fees. 

    Lock in fees are relatively new and are similar to earnest money, Walker said.  The purpose of up front lock in fees is because investors (of the loans which the borrower is applying) are beginning to penalize lenders for not delivering on loans for which borrowers apply.  This is often due to borrowers shopping rates.  “Time, money, and effort is put into getting a loan approved” Walker said, and the lock in fee shows good faith on the part of the borrower.  The fee is remitted at the close of escrow as a credit on the closing statement.

    The new requirements do not add time to the loan process, Walker said.  “Nova underwrites locally, draws the docs locally, and funds from its own money,” she added.  “Even with FHA and VA loans, we have basically a 30 day turn around time”.

    Some lenders are recommending a 45 day closing time, so that if a contract is written August 1, closing should be stated September 15.    A Realtor who works closely with the lender is your best advisor, knowing the turn around times of lenders is even more important, and it underscores the need to use local lenders.


Nova Home Loans

Federal Reserve Board Press Release

Federal Register:

H.R. 3044 … Call to Action…

Monday, July 27th, 2009

    U.S. Representative Travis Chiders from Mississippi has sponsored with 37 co sponsors House Bill  3044 which calls for an 18 month moratorium on  the Home Valuation Code of Conduct.   The bill, sucinctly states:


During the 18-month period beginning on the date of the enactment of this Act, the Home Valuation Code of Conduct announced by the Federal Housing Finance Agency on December 23, 2008, shall have no force or effect.

No one from Arizona has co sponsored the bill.   The bill effectively puts a moratorium on Andrew Cuomo’s call for Appraisal Management Companies (AMC) and allows time to develop rules and regulations governing the appraisal industry.

As well as lenders, Realtors, and Wall Street, the appraisal industry has also been cited as a cause of the economic melt down.  It is alleged that appraisers were given a “target price” to meet by lenders which over valued the property and contributed to “loan fraud”.   Ironically, many of the large Appraisal Management Companies are subsidiaries or sister companies of the large banks which are currently underwriting Fannie Mae and Freddie Mac loans.  These are the types of loans governed by the Home Valuation Code of Conduct.

Tom Heath, in his blog post Saturday, takes the Federal Housing Finance Agency to task and its Director, James Lockhart, for knowing little about the Home Valuation Code of Conduct.  Heath is President elect of the Southern Arizona  Mortgage Lenders Assocation and was guest blogger at this site last week.  With his permission, I am reposting Heath’s comments.

Anyone concerned with real estate should take time to read this post and contact state representatives to support House Bill 3044 calling for the mortatorium on the Home Valuation Code of Conduct. 


AAR Requests Review of Issues Resulting for SB 1271 ‘s Passage…Anti Deficiency Legislation

Thursday, July 23rd, 2009

The path taken by people trying to get out from under negative equity or mounting bills is littered once again with potential legal problems for Realtors, buyers, and sellers.  The passage of the Arizona Senate Bill 1271 emphasizes the need for people to seek legal counsel when contemplating a foreclosure or short sale.


The Arizona Association of Realtors  (AAR) requested that Governor Jan Brewer amend the call for a Special Session of the Legislature to review the issues resulting from the passage of Senate Bill 1271, otherwise known as the Anti Deficiency legislation.


This bill states that within 90 days of the sale of property under a trust deed, “an action may be maintained to recover a deficiency judgment against any person directly, indirectly, or contingently liable on the contract for which the trust deed was given as security…”


This does not apply to any property 2 ½ acres or less used as a one family or single two family dwelling by the trustor  for at least six months and for which has a certificate of occupancy was issued


The legislation continues that the deficiency judgment will be for an amount equal to the amount owned to the beneficiary as of the date of the sale, as determined by a court.  This can be for the difference in the fair market value, less the amount of liens owed, and includes any interest which may be incurred. 


The party seeking remediation must act within the 90 day period, and if no action is pursued, the proceeds of the sale are considered full payment of debt.


In the letter to Governor Brewer, Tom Farley, CEO and Cheif Lobbyist for the AAR,  points out this bill applies people with second homes, rental property, and family owned property.  Developers, Farley said, are not protected . The statute points to the “subtle difference” in the property “being utilized as a one or two family dwelling”  which is how the existing statute reads, rather than the amended version which specifies “the focus is on the trustor themselves utililizing the property instead of the property being utilized”.


Farley’s letter came as a result of researching case law and the consequences of this bill.  He substantiates the letter with case law from various jurisdictions.  Lenders receiving Troubled Asset Relief Funds (TARP) are authorized to seek deficiency judgments against property owners after foreclosure.  Deficiency judgments allow for the judgment creditor to garnish the wages of the judgment debtor, employ collection agencies, garnish non earnings such as bank deposits, take non-exempt property and sell it at a public auction to satisfy the debt, and place a judgment lien on real property owned or later acquired by the judgment debtor.


The legislation came as a result of lobbying from the Arizona Bankers Association.  Arizona is one of the highest foreclosure/short sale states and Arizona bankers would like to recover some portion of the millions of dollars lost.  The bill, as of this writing, is scheduled to go into effect September 30, 2009.  Unless rewritten in the special session, the courts may be filled with lenders seeking deficiency judgments against former homeowners, which will create another series of problems including a rush to file for Bankruptcy on the part of judgment debtor.



Text of SB 1271:


Arizona Association Realtors: 


Other Blogs about SB 1271:








The Home Valuation Code of Conduct…Another Perspetive by Tom Heath

Wednesday, July 22nd, 2009

    The Home Valuation Code of Conduct and how it impacts Tucson real estate is also a concern of Tom Health, Vice President of Advocacy for the Southern Arizona Mortgage Lenders Association, Legislative Chair for the Arizona Mortgage Lenders Assocation and Director of the Arizona Association of Mortgage Brokers.   Tom is guest blogger today and what follows are his comments about the HVCC.

Thanks for taking the time to shed more light on the Home Valuation Code of Conduct (HVCC).  You touched upon several issues that are critical in understanding why we have to recall this policy and put in place a more meaningful method of ensuring quality appraisals.

You mention this is a “de facto regulation,” which is the perfect description.  HVCC was not implemented by an agency as a regulation, or by Congress as legislation; it was an agreement between one man and two, at the time, privately held companies.  The policy of HVCC circumvented standard public commenting periods and debate that would have been required if this were an actual regulation or law.  The Attorney General of New York, Andrew Cuomo, threatened Fannie Mae and Freddie Mac with massive lawsuits if they did not comply with this code.  The weak companies feared “tobacco type” lawsuits across the country and succumbed to the AG’s demands.

The foundation for this agreement was an investigation launched by the AG into alleged appraisal fraud resulting in values that were unrealistic, but led to huge earnings for a large national lender and their partially owned subsidiary appraisal management company (AMC).  Whether the attorney general had a foundation for his threats is not known, because as part of the agreement was to keep the results of the investigation undisclosed.

Due to the implementation of the HVCC, most lenders now work with an AMC, which is an unregulated entity and is often owned, in part or in totality, by the bank for which it performs appraisals.  Ironically, Cuomo’s code has led to the dominance of the very structure that prompted the investigation that led to the code.

What was intended to protect consumers from unscrupulous originators and appraisers has created a more expensive process for the borrower and created a lower quality and less reliable product.  You accurately point out that the cost of a report has increased, but the compensation to an appraiser has decreased.  Quality appraisers are unable to work for the reduced income and therefore, orders go to less experienced practitioners.  Many times, the appraiser is brought in from areas outside of the market and is unfamiliar with trends and characteristics of the property being inspected.

While many are focusing on the inaccurate values being returned, the emphasis should be placed on the poor methodology of those reports rather than the value itself.  Anecdotal evidence is pouring in that, appraisers are brought in from areas outside of the market and are unfamiliar with trends and characteristics of the property being inspected.  Two reports were forwarded to me from a listing agent representing a property in a historic part of Tucson.  The first report was well below the agreed upon sales price and used comps that were not representative of the property’s historical characteristics.  The sale fell through.  Seller reduced price, a new buyer was found, a new lender was used, and a new appraisal was performed.  This report used comps more akin to the property being inspected and value came in 10% above ORIGINAL sales price.

In addition to cost and quality, the code has presented a “portability” issue.  Consumers typically pay for the appraisal at or prior to time of inspection.  While the code allows the report to be transferred to another lender if the borrower so wishes and the appraisal is HVCC compliant, the reality is much different.  One large national lender has a written policy that it will only accept reports completed by its wholly owned, subsidiary AMC.  Any borrower wishing to switch to this lender would likely have to have to bear the cost of another appraisal.  This same lender also stipulates that it will only release its reports to other lenders if the borrower is declined or counter offered on the terms of the loan they requested.  In other words, if that lender wants the loan, they will not release the report even though the consumer has paid for it.

The only vocal supporter of HVCC is a professional group, Title/Appraiser Vendor Management Association (TAVMA), whose members are large AMC’s.  The Appraisal Institute has supported the HVCC mission of appraiser independence, but has asked for changes.  Fannie Mae and Freddie Mac are noticeably silent on the code.

There is, however, loud opposition to the bill from the National Association of Realtors, the National Association of Home Builders, the National Association of Mortgage Brokers, and many independent appraisers.

The prevention of appraisal fraud and coercion has to be eliminated, but HVCC is a poorly planned and improper tool for the job.  Congress has introduced HR 3044 that would place an 18-month moratorium on HVCC and allow regulators to create a workable solution that takes the good intentions of HVCC and melds them with practical procedures that can strengthen the industry and protect consumers.


Tom is with Consolidated Lenders, The Heath Team  

 House Bill 3044:











Back to Blogging…

Sunday, July 12th, 2009

    I’ve had a bit of a hiatus from blogging, and if truth be told, I miss it.  But I stopped blogging in January/February.  I became paralyzed and found myself unable to do much of anything …  oh I took real estate classes, and was not literally paralyzed, but I was in a real blue funk, as if something had sucked the joie de vivre from my innards.  

   Needing to get out of this melancholy, I finally realized the root and the extent of my problem.  Congress was trying to get the stimlus bill passed … that bill which was suppose to be a panacea to the problems of the economy…but seems to be ladened with pork…GM and Chrysler were in the throes of financial crisis. Much had been made of the bonuses to AIG, and then the powers that be gave Fannie Mae and Freddie Mac bonuses far in excess of those to AIG…and everyplace there was news, there was a comparision to the Great Depression.  Barney Frank and Chis Dodd paraded pompously in front of the cameras with their “just so”  hair, seemingly oblivious to the true impact of what they had orchestrated years earlier.  Connect the dots and cause and effect are not a part of their thought processes.

  The sound bites were inane…the people writing about the Great Depression did not have much of a background in economics, they seemed to parrot what the members of the House and Senate desired.  The kicker was the more than 1200 page stimulus bill which no members of Congress read…but upon which they voted.   I didn’t think that this was democracy as I believed…I didn’t think it was responsible government. 

     It was pandering to the whims of lobbyism and I understand that lobbyism will go on ad infinitum…as soon as people get elected to the House or the Senate, they begin filling their war chest for the next run…and so we don’t necessarily have thoughtful government…we have goverment based upon what interest group  can pony up the most cash…or so it seems to me. 

   And so I did the only sane thing I could…I stopped reading the newspaper and I turned off the news.  Alas, it saddens me but at every instance, I will tell people, look beyond the sound bites…the press releases, and think for yourself.  Don’t believe everything you read or hear…not that I did.  But I suddenly realized what an impact the news has upon people…and how important little gestures are in getting to the truth…and so I am blogging again…about Tucson, about real estate…and maybe once and a while, a tangent like this!

The Old Is New…The New is Old…

Thursday, December 18th, 2008

 ” What’s old is new and what’s new is old.”  That adage stands today.   As we all know, no more NINJA loans, no income, no jobs, no assets.  And sometimes the old fashioned way is the best. 

      Putting 3.5% down on an FHA loan after January 1 is prudent.  And conventional loans with 5% or more down, is also prudent.  Where else could you purchase something costing $350,000 with no money down?  It makes no sense.

     But in 1999 Congress repealed Glass Steagall through the passage of the Gramm-Leach-Bliley Act.  This permitted commercial banks and investment banks to compete. 

   Congress deserves to take it’s lumps.  The repeal of the Glass Steagall Act at the end of the Clinton administration combined with the loosening of terms and government encouragement to banks to make  unworthy loans through the Community Revnvestment Act, lead us to this debacle. 

    Money was loose and abundant.  And builders took advantage of this free for all, as did lenders, Realtors, investors in housing stocks, investors in property… anyone who thought they might make a buck. If you could fog a mirror, you could buy a house!

    But now, returning to saner times, people are lamenting the lack of easy money.  But in the 1990’s, people needed a down payment, and they needed closing costs to purchase a house.  In some areas of the country, there are 40 and 50 year mortgages…years ago, a 20 year mortgage was considered long. 

    If people have a vested interest in their home, chances are they will work hard to keep it and they will make their purchasing priorities accordingly.  But if I have no vested interest in my home, why should I deprive myself of something I want in order to make a mortgage payment? 

    That simplifies the problem, I know.  We have 80-20 loans out there with adjustable rates…there are rates resetting at much higher rates…and I know the forclosure rates are at their peaks.  There is plenty of blame everyplace…some of which should be laid at the doorstep of Congress. 

     Let’s hope this financial mess ushers in a period of stability where people begin to count their pennies again before making huge purchases.  And maybe some reflection for all those people who tried to make a fast buck…and some consideration of business ethics and the fact we are dealing with people’s lives and the lives of their families…and maybe…just maybe…some reflection about self responsiblity. 

    It’s a blame game alright, but ultimately, the person responsible is oneself.  



Sunday, September 28th, 2008

     I picked up the Arizona Daily Star this morning and read the headline “Tucson May Charge Fee on New Home Sales”,  had a gut reaction, hastily poured my cup of coffee, then sat down to read the article so as not to prejudge.

    A 1% (One Per Cent) transfer fee on all new home sales is being proposed by  two city Council  members, Regina Romero and Karin Uhlich.   The purpose is that the city’s housing trust fund,  be “used to pay for such things as home repairs and down payment assistance for low-income residents”, according to Rob O’Dell, who wrote the front page article.  

                      ” The new fee, recommended for approval by a council subcommittee on Sept. 15, would apply to any house or condomium unit where a builder has entered into a development agreement with the city.”

according to O’Dell’s article.

    (I would like to provide a link to this story so you, the reader, can have the opportunity to read it verbatim.  The Star, however, now requires a person to register in order to read the article.  If you want to read the article, register at:  and then pull up the article).

       This would not apply, as I read it, to development in Pima County.  

       My reaction was/is visceral.  I haven’t had such a physical reaction in months to anything.  This is being proposed by our elected officials in Tucson. 

     The Arizona Association of Realtors is working to get Proposition 100 passed by the citizens of Arizona which will prohibit, by Constitutional Amendment, a real estate transfer tax at the state level.  To do this, voters must vote YES on the Proposition.  A  copy of the proposition is at Jan Brewer’s website, Arizona Secretary of State.     


        Arizona, like many states, is in a budget crisis, as is the City of Tucson. Were Arizona to pass a 2% transfer tax on the sale of real property, and the City of Tucson were to pass the 1% tax, and the average price of a home in August was $238,504, the total transfer tax would amount to an additional $7155.  I think that is a lot of money!   There is nothing to prohibit the city from passing a transfer tax even if the state has a transfer tax.  

       (My cynical question is, do we mark up the price of the house by that amount so that the 3% fees can then apply to the more than $7,000 added,   and then house then becomes priced at $245,659 – and the tax is an additional $200.+.!   Does this make housing more affordable for the Average Joe?  Granted this is worse case scenario but I remember when Social Security was paid on the first $32,000 of a person’s income!)

     I understand this is not called a tax, it is called a “fee” – but it is not voluntary and therefore it is a tax!  

    Two other issues galled me when I read the proposal by Romero and Ulrich.  The huge bailout, okayed at midnight by Congressional leaders for which taxpayers are now on the hook, was partially necessitated by the lax standards and no money down mentality which had it’s origins in Lyndon Johnson’s New Society.   The guidelines of the Community Reinvestment Act, over the years, became looser and looser. Congress embraced the idea that the American Dream of homeownership should  apply to all Americans, regardless of ability to pay.   Both sides of the aisle are equally responsible.  Where else could you purchase something for $300,000 with zero down?

    The second source of irritation is the amount of money which was approved by Congress in the much touted Housing Bill which was supposed to help people in distress to prevent foreclosures.  That bill gave millions of dollars to towns and cities for the expressed purpose of low income housing, to buy up abandoned or foreclosed houses, or to build new low income housing for people within the low income, extremely low income, and very low income brackets.   I have read the nearly 700 pages of the Federal Housing Bill and have written extensively about it in this blog.  I suggest both Council people wade through that document and ask the federal government for what is Tucson’s just due.

     Affordable housing is an issue, to be sure.  Adding fees onto those people who are struggling to save ten percent to purchase a home in order to provide down payment assistance to low income residents just doesn’t resonate.  A family of four earning $60,000 and purchasing a property at the average price of a home in Tucson in August, with a 3% transfer fee -(assuming both city and state) would then fall into the low income category after than transfer fee is paid.   Other sources of revenue are proposed and listed below and I have provided resources below regarding low income housing and the income points.


Tucson Housing Fund:

 From the Report of the Tucson Housing Fund Trust – January 2008

Revenue Recommendations:

The current sources of funding are not sufficient to support an ongoing meaningful effort to address housing issues in Tucson. The CAC has prepared some preliminary recommendations to the subcommittee for future funding sources to support the THTF. We are prepared to work with the Mayor and Council to obtain other community input toward successful adoption of these or other sources of revenue the Mayor and Council wish to consider more closely.

1. Increase the Bed Tax by $1.00 per night. Dedicate this new revenue, estimated at $2 million a year, to the Trust Fund. There is a compelling argument in using revenues from visitors to support housing for Tucsonans. The employees of the hospitality industry are among many families that would benefit from the availability of more affordable housing options.

2. Pursue a change to the Model Cities Tax Code that would allow the City to implement a Residential Rental Tax on units that rent for $1,000 or more to support the THTF.

3. Request a voluntary contribution to the Trust Fund from all housing disciplines (Builders, Realtors, Lenders, Title Companies, etc.) at the closing of every home sold within the City.

4. Support state legislation that would dedicate interest earned on rental Security Deposits and earned interest on Escrow Funds from home sales within city limits to the City of Tucson Housing Trust Fund.


Program Criteria and Evaluation Considerations:

— Housing must be within the City limits
— THTF is limited to households that earn under 100% of the area income (see chart)
— Housing can be in the form of ownership or rental
— Proximity of proposed housing to employment or mass transit
— Leverage ratio of THTF funding to that of the employer’s
— Recapture policy
— Homebuyer Education/Counseling component

Household Size

Income limit