Local home loan opportunities available for qualified buyers | SierraSun.com

Local home loan opportunities available for qualified buyers

Nick Cruit
Sierra Sun

Emma Garrard/Sierra Sun

The tightening of lending restrictions following the subprime mortgage crisis is dampening the sales of luxury homes in Truckee and Tahoe much more than modestly priced homes, local real estate officials say.

For people who are looking to buy a home under $580,000 and are qualified to finance the loan, opportunity abounds in the Tahoe-Truckee area, Realtors and lenders say.

Lenders are offering good terms on jumbo conforming loans and FHA loans that would cover a significant percentage of the purchase price for prospective homeowners with a 680 credit score and a 20 percent down payment, said Dave Giacomini, the president of Sierra Mountain Mortgage in Truckee.

“If you meet these criteria, you can get a 6-percent, 30-year fixed loan in Placer County for up to $580,000,” said Giacomini.

In the Tahoe-Truckee area, these stable rates afford home hunters a great opportunity in the lower end market.

According to Intero Real Estate Services owner Anita Noble, this end of the market is “seeing more inventory and more affordability,” adding, “there are a lot of opportunities under $400,000.”

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While the accessibility of conforming loans should make these houses under $400,000 accessible and in high demand, buyers might still be gun shy.

“The demand is there, consumer confidence is not,” said Noble. “When buyer confidence turns around, we’re going to be busy.”

With all the opportunities in the lower end market, the luxury market faces more challenges. Prospective buyers need jumbo loans and significant down payments to acquire homes in the million dollar range.

At rates such as 9 7/8 percent, Giacomini says these non-conforming jumbo loans are so expensive no one even wants them. And while home prices are generally down around Lake Tahoe, many exceed what a conforming loan would cover, requiring jumbo loans with steep rates.

Despite the year-to-date average Lake Tahoe home price dropping 27 percent, the average Tahoe home sale still registers at $1,051,509 according to Chase International’s third quarter report. In Truckee the average home price is $825,312 while Tahoe City’s is $1,222,665, both up 2 and 3 percent against falling prices around the lake.

Taking Tahoe City and Truckee’s location into account, Realtors cite their proximity to resorts and stabilized growth as reasons for high average home prices.

“Areas that have expansive growth are feeling the credit crunch much more than areas that growth has stabilized,” said John Falk, Tahoe Sierra Board of Realtors Legislative Advocate. “The more recent the construction or purchase of an existing home, the more likely that property is to be tenuous.”

“We are in a resort community market,” said Falk. “Property here has always been a stable commodity; it’s not a feast and famine type of environment.”

Despite recent market polarization, Giacomini says this is a great market for younger people looking to buy homes. If they meet the criteria, “they will get a chance to buy property at prices unheard a year ago.”

Whether a house requires a jumbo conforming, non-conforming or FHA loan, being able to afford monthly payments is paramount when deciding on a home, an issue many lenders disregarded when handing out 100 percent loans to people with bad credit and no verifiable income, a major cause of the subprime loan crisis.

As a general rule, Giacomini suggests house payments should not exceed 33 percent of your gross income, total cost including taxes for financing the home.