You don’t have to turn very far to see firsthand and understand the housing challenges we face in Northern Nevada.  I still remember words my father once told me: “Opportunities arise and exist from challenges and difficult times.  Count the blessings you have, not the ones don’t have.”
   

    As one of the states hardest hit by the housing crisis, we have been forced to cope with tougher and tougher lending standards.  We have seen elimination of many products that used to provide flexibility, and are currently able to originate the standard “vanilla” products.  The most popular product is the 3.5 percent down FHA loan that continues to be the leader in home ownership financing. 
   Mortgage investors now require a minimum mid-credit score of 620 and full income and asset documentation on ALL loans.  Borrowers now must document complete job histories, current and potential income earnings, cash reserves, and overall stability to ensure home financing.  VA, USDA and Nevada Housing loans are becoming an excellent source of financing for those good buyers who just don’t have any real money to put on the table as a down payment; however, these programs follow stricter guidelines.  Due to our ongoing housing challenges, the program that is hardest hit is conventional financing. 
   In the state of Nevada, the private mortgage insurance providers are requiring a 10 percent down payment minimum and must have a credit score of 720, otherwise the buyer will be required to put 20 percent down.  Second homes and investment properties also require a minimum of 20 percent down.  With these tougher standards, it makes speculative investment purchases almost impossible.  Investors generally carry a total of 9 financial properties, with a few investors allowing up to 10 properties on a case-by-case basis.
   The current market, made up primarily of short sales and foreclosures, has been unfriendly to the local building contractors.  We have seen the average price of homes in Norhtern Nevada increase slightly in the past 4 months, which is a good indicator for builders to prepare to enter the market with new inventory and provide needed jobs to our economy.  Although Nevada ranks #1 in foreclosures, we in the northern part of the state have been very fortunate to be able absorb the inventory that is released.  As we continue to deal with the potential of “shadow inventory” (REO property that is not yet on the market), we have seen a modest decline in the past couple of months in Notice of Defaults and Trustee Sales which are a good sign that we may just be dragging the bottom.
   Nevada recently had a tier improvement from the National Mortgage insurance companies.  It is encouraging to see the large mortgage investors allowing 90 days or less property flipping financing even with a 20 percent or greater sales price increase.  Financing is available as long as the borrower can meet the tougher documentation standard—in the long run, these new standards should provide for a moderately healthy, stable housing market.  There are state, federal and local down payment assistance programs, most with parameters that bad buyers can take advantage of.
   Major banks and investment bankers are still trying to wade through the toxic loans that exist in their portfolios.  Therefore, as we consumers have witnessed, the bank stabilization “bailout” never really made it down to the local business owner who needed it the most; it seems to continue to reward the bad behavior of the largest financial institutions.  The federal government needs to review and revamp the HAMP (Home Affordable Modification Program) to help those who want to try to do the right thing and stay in their homes rather than walk away from their indebtedness. 
   If we can provide assistance on a national or state level for the many homeowners that would like to remain in their homes instead of short selling or foreclosing, this would be a tremendous boost towards the stabilization of the housing market. What form that would take is open to debate, but if banks are willing to go through the motion, time and cost of a short sale, why not offer a short refinance to the current owner?  This may require profit sharing on the future sale of the home, but for now it keeps homes from coming on the market.
   As a company that has been involved with the construction industry both directly and indirectly, we know that yhousing is crucial to our economic recovery by the sheer number of jobs created as a result of home building.  From a local perspective, we need to work together and invest in those people and companies that support the local economy—we need to work with people who “get it”.  More specifically, housing industry jobs need to return through state and local incentives, promotion of small companies and entrepreneurs, flexible tax incentives, and rewarding job creation.
   There is a light at the end of the tunnel…and no, it’s not a train!  With the right attitude and less negative press, we can overcome through shared values and visions, making Nevada a place people want to move to for a better quality of life.  Life is still happening around us and the need for housing is still there.  Let’s learn and adjust to secure a more prosperous housing market in Northern Nevada.

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(Dwight Millard is the branch manager of Academy Mortgage.  He is an experienced mortgage professional who builds long-term relationships with his clients and helps them establish financing strategies and select suitable mortgage loans to meet their short and long-term goals.  To contact Dwight, call 775-828-7007 or email him at Dwight.millard@academy.cc)

Dwight Millard
Academy Mortgage s