Gardens start to come alive this month, and if the weather cooperates, it’s a time to plant, water everything and take care of the lawn.

By Sally Anderson of MSN Real Estate

In some areas, April brings the first signs of winter’s end; in others, it’s the gateway to hot, summery weather. But in most climates, it’s the magical month when gardens start to come to life.

Remember to adjust gardening tips to fit your own growing season — but most important of all, wait until the last frost date to put tender plants in the ground.

Greenhouses
Here comes the sun, which means that greenhouses are starting to heat up. On warm days, be sure your greenhouse is well-ventilated. Give more regular care to greenhouse plants by stepping up your watering and fertilizing schedule. Also make sure to check your greenhouse thoroughly for pests.

Container gardens
Even beginning gardeners can brighten up a terrace, patio, deck or windowsill with containers tumbling with flowers.

• Use hanging baskets, pots of all sizes and planter boxes — or ask the kids to help you paint old pails or coffee cans — for clusters of color.
• Fill containers with bulbs and bedding plants to be transplanted in warmer weather, or make permanent plantings.
• Spark up potted shrubs and trees by surrounding them with dashes of perennial color.
• Group cactus plants of different heights and shapes, or try your hand at a container bonsai garden.
• Apartment dwellers, if you haven’t made a windowsill herb garden, what are you waiting for?

Watering
Don’t let your garden dry out before it even hits full stride. Get into the rhythm of watering regularly early in the season to ensure happy, healthy plants.

• Set up a watering system to minimize the work of regularly watering your garden beds. Make sure a hose or watering can is accessible in areas that you will water often throughout the growing season.
• In container gardens, make sure that your geraniums, pansies and other container plants are getting enough water.
• This is an ideal time to check on the moisture of plantings at the base of evergreens or under eaves. These are often left parched, even in rainy climates.

Weekend projects
Carpenters and carpenter wannabes: Lots of garden projects are easy enough for beginners.

Try to devote one weekend of each spring month to building projects, and beautify your garden with simple or elaborate embellishments.

• Make a simple entry trellis to frame your walkway with a shower of climbing roses.
• Garden paths, from basic steppingstones to brick or timber steps to colorful flagstones, can meander cottage-style or lead directly to a meditation pond.
• Add benches to frame your deck or patio, or build a bench to encircle a large tree for dappled shade in summer.
• For vertical variety in your container garden, make a pot trellis for creepers or climbers to cling to — you’ll even have time to spare for building raised vegetable beds or a wall trellis for clematis.

Lawn care
Want the greenest lawn on the block? Well, start now or forever hold your peace with a less-than-lush lawn.

• Between now and May, after grass is well-established, give the lawn a light raking before fertilizing.
• Choose a spring fertilizer that contains moss killer if moss is a problem.
• You can now overseed your lawn (using about one pound per 300 square feet) to help fill in bald patches and fight the return of weeds and moss.
• If your lawn has begun growing in earnest, you can also aerate it now, making it more absorbent and reducing summer water needs.
• Start cranking up your mowing schedule and put those grass clippings to work! Adjust your mower to cut only 1/3 the length of its blades, then leave the clippings on the lawn. They’ll feed the growing grass much-needed nitrogen as they break down.
• Make sure newly sown grass is getting enough moisture.

Planting trees and flowers
In some areas, the time has passed for transplanting large shrubs and trees, but in many climates you can still plant deciduous and evergreen trees, shrubs, perennials, hardy annuals and rock-garden perennials such as yarrow, rock jasmine and small dianthus.

• Geraniums and fuchsias that have spent the winter in hiding should be repotted for a fresh start.
• Midspring is also a good time for planting dahlias, most lilies and gladioluses for summer blooms, but hold off a bit longer on sensitive canna lilies and tuberous begonias.
• If you haven’t planted or set out berries yet — blueberries, raspberries, blackberries and strawberries — now’s your chance! Just be sure they have plenty of water.

Vegetables
In most areas, April is the real start of the outdoor vegetable garden, especially perennials such as asparagus, although it’s probably still not warm enough to plant heat-loving crops such as tomatoes, cucumbers and squash.

• Wait until the end of the month to plant corn and beans, but you can put potatoes, onions, radishes and other root crops in the ground now — or anytime. Before transplanting, start hardening off cool-loving greens and root-crop seedlings such as cabbage and lettuces, carrots, chard, spinach, broccoli and cauliflower.
• Place planters of root vegetables in a shady, wind-protected area, moving them daily for more sun exposure.
• Until a few days before planting time, bring the planters back indoors at night.
• If it’s warm enough at the end of the month, start sowing seeds directly into the soil.

Shearing, pruning and grooming
From now until late spring, the time is ripe for shearing and pruning evergreens of all kinds.

• Cut only in the green foliage areas to ensure that branches will regrow, and maintain that nice draped evergreen shape by keeping the top smaller so that bottom branches will receive needed sunlight.
• Stop pruning roses and buddleias, and prune fuchsias late in the month.
• After rhododendrons bloom, remove the spent flower clusters with clippers or snap them off by hand.

Mulch and compost
Don’t neglect the soil in which your garden grows. Mulch and compost add valuable nutrients, as well as protection from heat and drying out.

• Even in areas you haven’t yet planted, but especially around shrubs and perennials, add a light layer of mulch to help summer water absorption.
• Mature trees, climbers and roses (now that you’ve stopped pruning) should also be mulched now.
• Start turning your compost regularly, and mix old and new compost together with a high-nitrogen fertilizer.

Pests
Don’t let pests enjoy the fruits — or vegetables for that matter — of your gardening labors. Take precautions early and throughout the growing season to keep your plants healthy and edible.

• Treat newly planted fruit trees for pests after the first buds appear on branches.
• Keep protecting new shrubs and fruit trees from unexpected night frosts.
• Especially now, after planting tender seedlings, make a slug-and-snail tour armed with a saltshaker, or bait slugs with shallow bowls of stale beer.

Houseplants
Give a little love to your houseplants, and they may give back to you. For example, did you know spider plants help to purify the air by removing carbon monoxide?

• Give houseplants a boost after their dreary winter: Gently remove topsoil and replace it with a top-dressing of compost.
• Repot plants that have outgrown their winter containers. Use the next size up, and cover the drainage hole with screen mesh or a pot shard to prevent soil from washing through.

Some people love negotiating and others hate it. Regardless of which side of the sold sign you fall on, the best possible deal is what both buyer and seller want. Arriving at that price can be a lesson in frustration or even cause a complete shut-out.

So what’s the X factor? In real estate, many buyers will shop around, find the home they really like, and then, rather than make an offer based on the value of the home to them (taking into consideration comp prices too), they’ll say, "How much less should we offer off the asking price?" That’s the X factor.

It’s as though there’s a magical X percentage that should automatically come off the listing price, regardless of what the asking price is. Many times the home is priced realistically––right in line with the comps. Buyers still want a deal and may want to start with a low-ball offer. Doing this can slow the process and not necessarily result in the outcome the buyer wants–the seller, feeling insulted, may halt any negotiation. If you’re a serious buyer looking to purchase a home, it’s a good idea to really heed the comps, and consider the value of the home to you–especially if the home you found meets your needs and desires.

Arriving at a purchase price for a home is very personal. What one buyer would pay, another might not for the very same home. Of course, there are appraisals to make sure that the home’s price is in line with how much the bank is willing to lend the buyers. But the buyers’ needs, the home’s location, amenities, and its overall appeal, significantly factor into its value. On the other side, the need to sell, the timeline, and the pressures of needing the money out of the home to purchase another property affect the sellers’ decision to accept an offer.

All kinds of negotiations begin when it comes to buying a home. Art, drapes, dishes, timelines… many different things are thrown into the negotiating process. If there’s something you absolutely must have, of course, negotiate to get it. Just understand that negotiation means compromise, so both sides will give a little and ideally both sides will win–not by a winner takes all stance but rather by each side getting their specific needs met through a compromise process.

If as a buyer you have a list of your top priorities jotted down before the process begins, it will be easier to keep them straight and ensure that those items are secured when the negotiating begins. Then, if suddenly, a non-top priority pops up and is causing the process to stall or come to a halt, you can re-evaluate your top priorities to see if this is truly a must-have or if, perhaps, you’ve fallen into the "winner must-take all" syndrome of negotiating. A lot of times emotions get ignited and sometimes the negotiation process becomes more about winning than really getting what the party needs or wants. In the end, that will create an unsatisfactory sale or no sale at all.

Meeting in the middle can often be a good tool for buyers and sellers who can’t come to an agreement on things like who will pay for the recording fee or certain cosmetic repairs. Splitting the costs can be less expensive than haggling for weeks, losing time, money, and maybe even the deal.

If you reach a really sticking point in negotiations, table it for a bit. Move on to other negotiations and see how many areas there are that both parties can come to agreement. Often the issue that was holding things up will then appear in a different light to both buyer and seller once the bigger items are resolved.
Written by Phoebe Chongchua

By Kiplinger’s

With winter approaching, try these 10 do-it-yourself weekend projects. They cost from $10 to about $250, money you should recoup with improved energy efficiency or when you sell your home.

You’ll be saving cash and going green at the same time.

Replace your shower head

• Estimated time: 15 minutes
• Estimated cost: $10 to $60

Install a new WaterSense-labeled showerhead and you could save more than 2,300 gallons of water annually, according to the Environmental Protection Agency. Using less hot water will cut your energy bills, and your local utilities may offer a rebate, too. The EPA says that models labeled WaterSense still provide a satisfying shower.

Your shower head is a water-waster if it fills a gallon bucket in 20 seconds or less. To find out how much water and money you could save in your home with water-saving improvements, use the calculator at EPA.gov.

Add aerators to your faucets

• Estimated time: About five minutes per faucet
• Estimated cost: $2 to $10

You can save an additional 500 gallons of water annually simply by replacing a standard aerator, which delivers more than 2.5 gallons per minute, with a low-flow one, with a flow of 0.5 to 1 gallon per minute.

Low-flow aerators will cut water and energy usage while maintaining adequate water pressure.

Unsure whether your faucets are water-wasters? Put a quart container under the sink faucet and let ‘er flow. If the container fills in less than five seconds, get busy.

In the kitchen, you might want greater flow — say, 2 to 4 gallons per minute — for filling a pot or the sink.

Install a water-efficient toilet

• Estimated time: One hour
• Estimated cost: $200 or more

The EPA estimates that a family of four replacing a home’s older toilets with WaterSense-labeled models average $90 in annual savings on their water bill and $2,000 in the toilet’s lifetime.

Concerned about performance? Reviews of the American Standard Cadet 3 high-efficiency toilet say it is "easy to install and flushes like no tomorrow. You hit that handle, your problems disappear."

If you don’t feel comfortable installing it yourself, you can hire a contractor for about $150.

Switch to fluorescent light bulbs

• Estimated time: 15 minutes
• Estimated cost: $2 to $15 for specialty bulbs

As the days get shorter, you’ll keep the lights on more. Now is a good time to switch from traditional, incandescent light bulbs to compact fluorescent bulbs. Energy Star-qualified CFLs use 75% less energy and last as much as 10 times longer than incandescents.

Start with your five most-used light fixtures, and you can save more than $65 annually. Don’t forget about your hard-to-reach locations, too.

Install a programmable thermostat

• Estimated time: 30 minutes
• Estimated cost: $25 to $250

With a programmable thermostat, you can preset temperatures for your home and automatically reduce heating and cooling when you don’t need them as much. Energy Star says an average household can save about $180 annually on its energy bills by properly setting its programmable thermostat and maintaining those settings.

This is a low-voltage wiring installation that will involve two to 10 wires. If you don’t feel comfortable following the instructions, a contractor will probably charge $75 to $150 for installation.

Build or install an insulated attic hatch

• Estimated time: Several hours
• Estimated cost: $30 if DIY; $30 to $240 for ready-made models

If your attic entry is not insulated, your home gains heat in summer and loses it in winter, jacking up your energy bills.

You have your choice of several ready-made products, as well.

Stop chimney drafts

• Estimated time: 15 minutes
• Estimated cost: $55 for ready-made draft-stopper

Even with the damper closed, your home’s heated air goes up the chimney in winter and hot outdoor air comes down in the summer. When you’re not using it your fireplace, plug the flue with a chimney balloon like the Draftstopper from Battic Door Energy Conservation Products.

For a really cheap alternative, you can make a stopper out of an old seat cushion or a pillow placed in a heavy plastic bag. Stuff the cushion into the flue and tie a long tail to it, so you don’t forget about it the next time you make a fire.

Drain sediment from your water heater

• Estimated time: 15 minutes
• Estimated cost: Free

To ensure your water heater’s performance and longevity, drain it annually to get rid of accumulated sediment — sand, minerals andr other nonsoluble stuff that settles at the bottom of the tank.

A good tipoff that you should do this? The heater sounds like a coffee pot, making bubbling or burping noises.

The basic strategy: Attach a garden hose to the drain valve at the bottom of the tank and run it outdoors or to a utility tub.

Replace your washing-machine hoses

• Estimated time: 10 minutes
• Estimated cost: $10 to $20

Washing-machine hoses don’t last forever, regardless of the material they’re made from — reinforced rubber or stainless steel, even those touted as "burst-proof." A broken hose can deluge your home with hundreds of gallons of water per hour, and your homeowners insurance probably won’t cover the flood.

Check the hoses frequently for rusting, bulging, cracking, fraying and leaks. All are signs that you should replace the hoses now. Otherwise, State Farm recommends that you replace them every three to five years. While you’re at it, check the hoses leading to water heaters, dishwashers and refrigerator icemakers.

Add insulating window treatments

• Estimated time: One hour for drapes; 30 minutes per blind
• Estimated cost: $30 to $200 or more

You can increase your comfort and cut your energy bills this winter with thermal window coverings. Duette Architella honeycomb shades, by Hunter Douglas, are the only window covering qualifying for the federal energy-efficiency tax credit of 30% of the cost, up to a maximum of $1,500, if you install them before Dec. 31. The shade more than doubles the insulating value of a double-paned, low-emittance window, when “inside mounted” and fully recessed within the window casement.

Country Curtains also sells foam-backed thermal curtains and insulated liners that you can hang behind your existing curtains with heavy-duty double rods that hold the curtain and liner.

By Tara Struyk of Investopedia

The proliferation of services that help homebuyers and sellers complete their own real-estate transactions is relatively recent, and it may have you wondering whether using a real-estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commissions that many real-estate agents command, for many, flying solo may not be the way to go — and could end up being more costly than a commission in the long run. Buying or selling a home is a major financial and emotional undertaking. Find out why you shouldn’t discard the notion of hiring an agent just yet.

1. Better access/more convenience
A real-estate agent’s full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents and will know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real-estate agent will track down homes that meet your criteria, get in touch with sellers’ agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you’re shopping for homes that are for sale by owner.

Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don’t respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.

2. Negotiating is tricky business
Many people don’t like the idea of doing a real-estate deal through an agent and think that direct negotiation between buyers and sellers is more transparent and allows the parties to look after their own interests better. This is probably true — assuming that both the buyer and seller are reasonable people who are able to get along. Unfortunately, this isn’t always an easy relationship.

What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner’s decorating skills and rant about how much it’ll cost you to upgrade the home without insulting the owner. For all you know, the owner’s late mother may have lovingly chosen the décor. Your real-estate agent can convey your concerns to the seller’s agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner’s feathers.

A real-estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that sellers can reject a potential buyer’s offer for any reason — including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real-estate agent who will represent his or her interests without turning off potential buyers who want to niggle about the price.

3. Contracts can be hard to handle
If you decide to buy or sell a home, the offer-to-purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren’t met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale — and you aren’t approved for the mortgage — you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract. (Keep in mind that the details of any contract may vary based on state law.)

An experienced real-estate agent deals with the same contracts and conditions on a regular basis and is familiar with which conditions should be used, when they can be removed safely and how to use the contract to protect you, whether you’re buying or selling your home.

4. Real-estate agents can’t lie
Well, OK, actually they can. But because they are licensed professionals, there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real-estate agent under an agency agreement, such as a conventional, full-service commission agreement in which the agent agrees to represent you, your agent will be bound by law to a fiduciary relationship. In other words, the agent is bound by law to act in his clients’ best interest, not his own.

In addition, most real-estate agents rely on referrals and repeat business to build the kind of client base they’ll need to survive in the business. This means that doing what’s best for their clients should be as important to them as any individual sale.

Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent’s broker or professional association or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.

When a buyer and seller work together directly, they can — and should — seek legal counsel, but because each is expected to act in his or her best interest, there isn’t much you can do if you find out later that you’ve been duped about multiple offers or the home’s condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent’s commissions by the time the transaction is complete.

5.  Not everyone can save money
Many people eschew using a real-estate agent in order to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets to keep the percentage of the home’s sale price that might otherwise be paid to the real-estate agent.

However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can’t both save the commission.

The bottom line
While there are certainly people who are qualified to sell their own homes, taking a quick look at the long list of frequently asked questions on most “for sale by owner” websites suggests the process isn’t as simple as many people assume. And when you get into a difficult situation, it can really pay to have a professional on your side.

By Marcie Geffner of Bankrate.com

Homebuyers and sellers who expect an appraisal to sail through to closing without a hitch may be surprised to discover that home appraisals today can be problematic. The reasons for the change are complex, but there’s no question that mortgage lenders have started to demand more reviews and do-overs.

Rob Johnson, vice president of lending at San Diego Funding, a mortgage company in San Diego, attributes the increase in home appraisal reviews to lender-specific requirements imposed because of past problems with certain types of home loans. For example, a mortgage lender might demand more scrutiny of an appraisal if the borrower has a marginal credit score or high debt level relative to income or if the property was a foreclosure that was fixed up and flipped by an investor.

Appraisals may lag home prices
Home prices are also a factor. When prices are on the rise, perhaps because buyers have bid more in a multiple-offer situation, appraised values might still be lower. The reverse is also the case.

“Any time you have a market in transition, appraisals aren’t going to keep up because the appraisal is based on historical data,” Johnson says.

Inadequate “comps” can present problems as well. (“Comps” are recent sales of nearby homes that are similar, or comparable, to the home that’s the subject of the appraisal.) The mortgage lender may deem the comps inadequate if the homes were too far away or were sold in such nontraditional circumstances as a short sale or foreclosure or if the sales occurred too long ago. If the comps aren’t sufficient, the lender may order a review or second home appraisal to verify that they were chosen correctly.

“If (the appraiser) can’t find three comps within that area and has to expand, that is where you start to get appraisal reviews or secondary appraisal requirements to make sure the appraisal was valid or that (the lender) was comfortable,” Johnson says.

The term “second appraisal” generally refers to a new, start-from-scratch valuation. An appraisal review could be a “desk review,” in which the appraisal gets a second look by an office-bound person, or a “field review,” in which the appraisal is subject to another drive-by or in-person inspection of the property. A review is more common than a second appraisal.

New guidelines distance lenders from appraisers
Leslie Sellers, president of the Appraisal Institute in Chicago, says a lender might order a new home appraisal if the first one was based on factual errors or the appraiser wasn’t competent in the area.

Some second appraisals, he adds, result from a misunderstanding of the Home Valuation Code of Conduct, guidelines that were meant to prevent undue pressure being placed on appraisers to inflate home valuations, but that may have caused some lenders to cut off communication with appraisers.

“The banks are thinking they can’t even talk to the appraiser,” he says.

Sellers can offer comps to appraiser
An appraisal review can cost several hundred dollars while a second appraisal generally involves a second full fee, says Sara Schwarzentraub, owner of Inter-State Appraisal Service in San Diego. These costs usually are paid by the buyer.

“It’s commendable that the lenders are being cautious and having stricter criteria to protect themselves, because in the long term that protects everybody, but it does make it more costly,” she says.

Home sellers can offer the appraiser information that might affect the appraiser’s opinion of the home’s value. This information is best handed over before the appraisal is prepared.

“If you know of a sale that’s similar to your house and it was a foreclosure, short sale, divorce or anything of that nature, make the appraiser aware of that,” Sellers says.

Real-estate brokers can help buyers and sellers find comps to offer the appraiser, Johnson says. If the broker believes comps may present a problem, the buyer and seller can plan accordingly.

“A good real-estate agent is aware of these issues. Many times, an agent will call us and say, ‘I know we are going to have problems with comps on this,” he says.

Neither the buyer nor seller can choose the appraiser, but Sellers says buyers can insist on a minimum competency, which he defines as having local market knowledge and being certified as well as licensed.

Buyers and sellers also can agree on longer time frames for the home appraisal contingency and closing date. Schwarzentraub says that asking for a 45- or 60-day closing, rather than 30 days, is not unreasonable.

Buyers are entitled by federal law to a copy of any appraisal for which they’ve paid a fee. Buyers should look over the appraisal and notify the lender of any errors that could have affected the appraiser’s opinion of the home’s value.

Homebuyers with little money for a down payment are finding more home loans available for a low down payment or even no down payment.

These mortgages are becoming more commonplace even as the country recovers from a housing bust made worse by the popularity of low-down-payment mortgages during the housing boom.

The Federal Housing Administration insures loans with small down payments. And private mortgage insurers have lowered their down payment requirements.

It’s even possible to get a mortgage today with no money down. The nation’s biggest credit union offers “zero-down” mortgages. The Veterans Administration and the Department of Agriculture guarantee home loans with no down payments.

Following are a few options for borrowers seeking low-down-payment and zero-down-payment home mortgages:

No down payment: VA loan

Veterans Affairs (formerly the Veterans Administration) guarantees no-down purchase mortgages for qualified veterans. Private lenders originate VA loans, which the VA guarantees. There is no mortgage insurance. The borrower pays a funding fee, which can be rolled into the loan amount.

The VA funding fee varies, depending on whether the veteran served in the regular military or in the Reserves or National Guard, and whether it’s the veteran’s first VA loan or a subsequent one. The funding fee can be as low as 2.15 percent or as high as 3.3 percent.

No down payment: Navy Federal

Navy Federal Credit Union, the nation’s largest in assets and membership, offers 100 percent financing (up to $650,000) to qualified members for buying primary homes. Credit union eligibility is restricted to members of the military, some civilian employees of the military and U.S. Department of Defense, and family members.

Navy Federal resumed zero-down financing this year after a hiatus of a couple of years. Barbara Sheehan, Navy Federal’s assistant vice president for mortgage products, says when members of the military are transferred, they sometimes own houses whose values have fallen, wiping out equity.

“Some people had to take losses to sell their houses, so to have to start over and save the money again for a down payment is really difficult,” she says.

The credit union’s zero-down program is similar to the VA’s. One difference is cost: Navy Federal’s funding fee of 1.75 percent is less than the VA’s funding fees.

No down payment: Department of Agriculture

The Department of Agriculture’s Rural Development mortgage guarantee program is so popular that it ran out of money this spring. Congress is expected to cough up more in time for summer homebuying season.

“That’s the cat’s meow, my favorite loan program,” says Jeff Tufford, mortgage consultant for Monarch Mortgage Consulting, in Grand Blanc, Mich.

Some borrowers are surprised to find that Rural Development loans aren’t confined to farmland.

“It’s not all rural,” Tufford says.

Grand Blanc is a suburb of Flint. There are nearby towns, such as Fenton and Davison, where “no one would walk there and say this is a rural area, but the USDA can do loans there.”

The USDA has maps on its website that highlight eligible areas. In addition to geographical limits, the USDA program has restrictions on household income, and it’s intended for first-time buyers, although there are exceptions.

The USDA mortgage comes from a bank, and there is no mortgage insurance. Instead, the USDA levies a 2 percent guarantee fee, which can be rolled into the loan amount.

Low down payment: Federal Housing Administration

The zero-down options listed above are restricted to limited groups of buyers. With a minimum down payment of 3.5 percent, the Federal Housing Administration is the low-down option that’s available to the most people.

Today, about 30 percent of all home loan borrowers get FHA-insured loans, up from 3 percent during the housing boom. The FHA gained market share after many other low-down-payment options (such as piggyback loans) evaporated in the housing bust.

Losses to the insurance fund compelled the FHA to hike rates. The FHA charges an upfront premium of 2.25 percent of the mortgage amount. On a loan with the minimum down payment, there’s an annual premium of 0.55 percent of the mortgage amount, or $550 a year for each $100,000 borrowed.

Another low-down-payment option

There is one more option for borrowers in the “low-down-payment” camp: A standard home loan with private mortgage insurance.

A number of companies offer private mortgage insurance for home loans with down payments of less than 20 percent. PMI is not the same thing as FHA insurance, a form of public mortgage insurance.

Typically, monthly private mortgage insurance costs more than FHA insurance for borrowers who put down 5 percent. However, PMI costs less than FHA for loans with down payments of 10 percent or more.

Private mortgage insurance has another edge over FHA: Under certain conditions, you can cancel PMI earlier — as soon as two years after you get the loan, compared to a wait of at least five years to cancel FHA insurance.

PMI has become easier to get. From the start of the housing bust until just recently, mortgage insurers slapped a “declining market” label on the worst-hit housing markets and required minimum down payments of 10 percent or more, instead of the traditional minimum of 5 percent.

Now, at least some of the insurers have relaxed the requirements, even in hard-hit states such as Arizona, California, Florida, Nevada and Michigan.

“We’ll do 5 percent down across the country,” says Chris Antonello, senior vice president of marketing for Genworth, a mortgage insurer based in Raleigh, N.C.

The streamlined rules are intended to help borrowers avoid foreclosure.

By Michele Lerner of Bankrate.com

Homeowners struggling to sell their homes in a short sale are getting some relief, thanks to the federal government’s Home Affordable Foreclosure Alternatives (HAFA) program.

Up to now, many short sales — in which the lender accepts a sale of the property for less than the full amount owed — have taken months to complete. Sometimes, the complex and lengthy process has failed, resulting in foreclosure.

HAFA establishes streamlined short-sale rules and provides incentives for borrowers and lenders to work together to avoid foreclosure. The rules — in effect between April 5, 2010, and Dec. 31, 2012 — also are intended to speed up the short-sale process.

“The streamlined short-sales process will definitely help homeowners,” says David Liniger, Re/Max International chairman and co-founder.

Before HAFA, homeowners often listed their home for sale without an idea of what the lender would accept.

“A lot of sellers and their Realtors have not been able to sort out the problems with short sales and have given up on the process because, even after sending in the correct paperwork, they have sometimes waited three or four months for their lender to respond,” Liniger says.

Under HAFA, borrowers receive pre-approved short-sale terms from the lender before putting the home on the market.

Lisa Matykiewicz, a Realtor and certified distressed property expert in Gilbert, Ariz., says the updated short-sale rules establish an easy-to-understand process with defined steps that “make it easier for everyone to understand.”

Eligibility requirements
The HAFA guidelines apply to lenders that voluntarily participate in the Home Affordable Modification Program (HAMP). The Department of Housing and Urban Development says more than 100 servicers have signed up to participate in HAMP, covering more than 89% of mortgage debt outstanding in the country.

To be eligible for HAFA, homeowners must first apply for a loan modification through HAMP. Owners who do not qualify for a loan modification or miss payments during the initial loan-modification period qualify for HAFA.

Other HAFA requirements include:

• Property is principal residence.
• Mortgage originated before Jan. 1, 2009.
• Mortgage is owned or guaranteed by Fannie Mae or Freddie Mac.
• Borrower is delinquent or default is foreseeable.
• Homeowner demonstrates hardship.
• Borrower’s total monthly housing payment exceeds 31% of gross income.
• Unpaid principal does not exceed $729,750.

According to HAFA rules, lenders now must offer a short sale in writing to the borrower within 30 days if the borrower does not qualify for or complete a loan modification. Borrowers then must respond within 14 days to the lender’s short-sale agreement.

“I think it’s great that the lenders in this program have to offer a short sale before going to foreclosure,” Matykiewicz says.

When a purchase offer is made, borrowers must submit the sales contract to the lender within three days, along with the buyers’ mortgage pre-approval and the status of negotiations with other lien holders on the seller’s property.

Finally, lenders must approve or deny the contract within 10 days.

HAFA rules also state that lenders must release borrowers from the obligation to repay the difference between the sales price and the loan amount. No deficiency judgments are allowed for a first or second loan.

Other incentives
In the past, short sales were especially difficult for homeowners with more than one loan on their home, since the home sale typically repaid only the first mortgage. HAFA’s financial incentives include a payment of up to $3,000 for second mortgage holders.

“Second trust lien holders are often owed five or 10 times that $3,000 payment,” Liniger says. “But if the property goes to foreclosure, the second trust holder is not likely to get any money at all. This at least guarantees they get something.”

Other HAFA financial incentives include $1,000 to loan servicers to cover administrative fees, up to $1,000 for mortgage investors who agree to share short-sale proceeds with second lien holders and $1,500 to the homeowners for relocation.

“The moving expense allocation acts as an incentive for them to stay in the property until the short sale goes through,” Liniger says. “Owner-occupied properties are usually in better condition than vacant homes.”