City of Newburgh Grants and Loans

A quick update on the Facade Grant and Renovation Grant/Loans: there's a stipulation to the programs that the building cannot have any code violations, meaning it must be habitable and up to code in order to qualify for the grants. Unfortunately, Eddie's house doesn't have windows or plumbing/heating, therefore it is not up to code and not habitable.

Eddie's trying to make the argument that the combination of his own money, his own efforts and the city grants would allow him to fix the building and make it habitable. It's an uphill battle, though, and although the city officials seemed to be helpful at first, they have not returned his subsequent phone calls or emails. Sigh.

Anyway, it's a shame because the house is on a crucial corner and its occupancy could change the whole outlook of the neighborhood it's in. We attended the Newburgh Heights Association meeting last week, even though we don't live in the Heights, and they echoed the same sentiment that Eddie voiced to the City of Newburgh in an appeal letter - that every house makes a difference. Each abandoned or boarded-up property devalues the surrounding area and only perpetuates the cycle of crime, lowered neighborhood pride, and lower rates of owner-occupied housing.

It would be great to start up a Montgomery-Grand-Liberty Association, where there are lots of beautiful historic homes that need to be remembered and advocated for. And there are a lot of people already in the neighborhood who take care of their own properties, who I imagine wouldn't be opposed to expending energy on making sure other properties are taken care of.

Since we haven't done anything with the house in a while, we were shamed into taking some action...so, maybe this weekend we'll do some landscaping in the front yard.

Inconceivable

So, Zaborski's Emporium was massive and crazy and much more pricey than I had anticipated. Kingston is lovely, though, and I hope someday Newburgh can have that level of community pride.

Anyway, we received some pretty awful news on Friday. The City of Newburgh informed Eddie that he doesn't actually OWN the house we bought. The explanation from our lawyer-in-law:

“The title co, your insurer, is working on fixing the problem. The problem took place during a gap between the closing and the last search that was done by the title company before the closing. During that gap, the city foreclosed the tax lien for all those back unpaid taxes. Because it took place during the gap, the title co wasn't aware of it. Notwithstanding, you are insured for not only what you paid, but for the fair market value of the property. I had spoken with Eddie about this months ago, when we discovered the problem when the title co tried to file the deed taking you out of title AND you brought to our attention that you were unable to pay the taxes. The title company is "on it". In the meantime, do not spend any more money on this house until this is worked out.”

Crazy, right?? So everything is on hold - the grant application, the ARC approval for facade work, the historic preservation tax credit application....

Anyway, it wouldn't be an adventure without a few Fire Swamps and Pits of Despair.

Mortgage Complications

I'm learning more and more about mortgages each time we can't get one. After looking at those houses last weekend, we decided we liked the latter one, on Courtney Avenue. It's an AMAZINGLY well maintained house with original floors, moldings, fireplaces... We loved it! The basement was clean and usable. Nobody had painted over the stair banister. The copper was still in place. As Eddie joked to our wonderfully wonderful realtor, Chris, it had us at "you-don't-need-a-drill-to-get-in" and "you-can-walk-around-without-flashlights."

Then...the mortgage. We talked to three new banks (not Wells Fargo, the one that approved us for our loan that we ended up not taking). All of them said that it looks like we would not qualify for a loan (although we would need to actually apply for pre-qualification before they could reject us officially).

This house costs $15,500 less than the other house and we are going to lay down 20% for this house rather than just 3% for the other house. So, technically, if we had gotten a loan for the other house, getting this one should be a piece of cake. The most informative person in the whole process was Keith at HVFCU. He kept plugging in numbers for me so we could troubleshoot our loan-worthiness.

It turns out that Wells Fargo was possibly very forgiving and allowed us a higher debt-to-income ratio than other banks would have because they assessed and took into consideration the increased value of the house after our renovations. Those few percentages of allowed ratio make a big difference. The difference, for us, between a 45% debt-to-income ratio ($45 per $100 of income we could spend on mortgage) and a 50% dti ratio is about $90,000.

The higher down payment you're willing to lay out and the better your credit score also bumps up those percentage points. If you have a credit score less than 720, you automatically have to pay an origination fee of .5% of your mortgage. So, it makes sense for us to take some money that we had saved to pay down our debt, and hopefully increase our credit score and lower our monthly debt expenses.

Well, the point of all this, is, I think the property (pictured in this post) we were all set to buy in June, and had a mortgage for, is now back on the market. I just saw it relisted on the CitiMortgage website, but that could be a glitch in their machinery. I hope not. If we can, we're going to buy it. With a straight mortgage and renovation loan and cross our fingers that the magic of its numbers still work.