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In Brief: Low-Income Downpayment Loan Program
Neighborhood Reinvestment Corp., whose chairman is Federal Reserve Governor Edward Gramlich, has partnered with Fannie Mae and 230 lenders to provide second mortgages to low-income home buyers in need of downpayments. The loans will be sold to Neighborhood Housing Services of America, which will pool them for repurchase by Fannie Mae. According to Gramlich, Fannie Mae and Freddie Mac usually do not buy these types of loans from community lenders. The program aims to overcome the downpayment obstacles that prevent low-income families from achieving homeownership. (www.americanbanker.com)
American Banker (09/10/04) P. 20; Paletta, Damian
Tax Breaks OK'd for Accessible Homes
The Pittsburgh City Council has extended preliminary approval to a measure that provides tax breaks to disabled-friendly housing. The incentives, which city planner Richard Meritzer said are the first of their kind nationwide, are intended to encourage the "visitability" of physically challenged people in new and renovated local homes. However, residential upgrades — including wheelchair ramps, wider doors, lower light switches and other improvements meant to accommodate the disabled — tend to boost both the property value and real estate taxes. Under the tentative proposal, any structure where disabled-oriented building improvements triggers higher property taxes will receive a tax credit for up to $2,500 over five years. To qualify, the improvements need only be made on the first floors of residences. "What this does is it encourages people to build or renovate with visitability in mind," Meritzer stated. Housing agencies and home builders oppose the measure, however, arguing that it would inflate housing costs, especially for low-income home owners; and that Pittsburgh's hilly geography and old-fashioned housing stock would make upgrades difficult. (www.post-gazette.com)
Pittsburgh Post-Gazette (09/09/04) P. A-12; McNulty, Timothy
Hovnanian Heats Up Housing
Residential builder Hovnanian outperformed earnings expectations for the third quarter by 11 cents per share, thanks to robust housing demand and high profit margins. The company turned in earnings of $1.46 per share, excluding items, marking an increase of 38% from a year earlier. Hovnanian shares, meanwhile, surged 9% to $38.50 — their highest in more than four months. The home builder expects to beat its fourth-quarter targets as well, and it also has boosted its projections for next year. (www.investors.com)
Investor's Business Daily (09/08/04) P. A2
Realtors Predict 7.1 Percent Increase in New Home Sales in 2004
The latest sales forecast from the National Association of Realtors® expects new-home activity to hit 1.16 million units this year — up 7.1% from 2003. Resales, meanwhile, are slated to climb 6.5% to land at 6.5 million units for 2004. The residential real estate market is being propped up by a continued drop in mortgage rates that is coinciding with increased housing construction. As such, NAR officials believe that new-home prices will jump 8.9% to a median of $212,300 and that existing-home prices will rise 7.5% to $182,700. "Price appreciation is projected to be only higher than historic norms next year, as supply levels come closer to market demand," notes NAR Chief Economist David Lereah. "Although we expect the number of home buyers to continue to exceed the number of sellers, the situation should improve in 2005." (www.cbs.marketwatch.com)
CBSMarketWatch.com (09/07/04) Kilgore, Tomi
Housing Surge Threatened by a Shortage of Cement
NAHB Executive Vice President and CEO Jerry Howard warns that the country's cement shortage is a crisis that could put the brakes on a real-estate boom that has underpinned economic growth in recent years. Attributing the shortage to China's building boom and limited cement production in the United States, he believes there is a way to solve the problem without waiting for the anticipated slowdown that coincides with colder weather. Howard is calling for the Bush Administration to scrap the antidumping tariffs on Mexican cement imports. He notes that shipments from Mexico can reach the United States in just four days, while deliveries from Asia take about 40 days longer. (www.wsj.com)
Wall Street Journal (09/09/04) P. A17; Howard, Jerry
OSHA Plans Voluntary Program to Improve Construction Safety
The U.S. Occupational Safety and Health Administration (OSHA) has announced a new Voluntary Protection Program (VPP) geared toward the construction industry. While past voluntary safety programs have been limited to specific, large-scale work sites, general contractors and subcontractors can implement the new VPP at different sites and for smaller, short-term projects. OSHA Administrator John Henshaw says the expanded program is intended to enhance safety within the dangerous field of construction and to help construction companies verify their commitments to health and safety. Contractors that participate in the VPP will receive formal OSHA recognition and exemptions from routine inspections. VPP participants typically reduce their injury rates to 50% below the national average. (www.bizjournals.com)
Bizjournals (09/06/04) Hoover, Kent
Money Shortage Threatens Superfund
The Environmental Protection Agency (EPA) reports that its Superfund program may not have the funds to deal with a record backlog of cleanup projects it expects to have on its books in two years, as work to restore those toxic waste sites is estimated to cost in the $750 million range. Capitol Hill legislators designed the program 24 years ago to be partly sustained by a trust fund developed from a $1.7 billion annual tax on oil companies and some chemical firms. The tax, though, was allowed to lapse in the mid-1990s, with the Superfund program forced to rely more on yearly allocations from Congress since then. In recent months, the EPA's main focus for cleanup — at the expense of a growing backlog, some say — has been an abandoned lead smeltering plant in Omaha, where the yards of nearly 16,000 residences are contaminated with lead; the effort is projected to cost over $100 million by the time is work is completed. (www.wsj.com)
Wall Street Journal (09/07/04) P. A2; Fialka, John J.
Cashing In; Your House May Still Offer the Best Way to Raise Money
Home owners in need of cash for improvement projects, vacation-property purchases and college tuition can still take advantage of low interest rates to tap into the value of their residence. Those carrying interest rates around 7% could lower their monthly mortgage payments by refinancing, allowing them to put the savings toward other expenses. Borrowers might even consider a cash-out refinance, which lets them simultaneously secure a lower interest rate and extract equity. Home equity loans have lower interest rates than conventional fixed-rate mortgages; and home owners willing to assume the risk of higher payments down the road can obtain even lower rates with a home-equity credit line. As for elderly home owners, they can pull cash out of their homes in the form of reverse loans. Though these loans let borrowers avoid mortgage payments until they no longer live in the home, they are accompanied by upwards of 6% in fees. (www.businessweek.com)
Business Week (08/30/04) No. 3897, P. 156; Tergesen, Anne
E-Mail on the Go: BlackBerry vs. Treo
Research in Motion's BlackBerry and palmOne's Treo 600 currently dominate the smart-phone market. The Treo 600 appeals to users who need access to a phone more than they need to check their e-mail. The $449-$499 device features a thumb-operated keyboard and software that retrieves e-mail messages at various times during the day. Meanwhile, the BlackBerry is the favorite among users who need instant access to calendars and other desktop applications and frequently check their e-mail. "My personal productivity, with the device, has increased tenfold," remarks Airband Communications CEO Andy Lombard. The BlackBerry ranges in price from $225-$500. The devices will soon have some competition, with Microsoft among the companies ready to enter the smart-phone market. (www.seattletimes.nwsource.com)
Seattle Times (09/04/04) P. E6; Bajas, Vikas
Cell Phone Madness
Cell phones are no longer simple communication tools. They are now equipped with keyboards, color screens, Web and e-mail access, and software to run Word and Excel applications, among other things. Handspring's Treo 600 is just one such device emerging in the business world as a laptop replacement. Many companies are embracing smart phones because they are cheaper than laptops and desktops — at just $450-$800 — but boast similar features. However, laptops will not be edged out completely due to the inability of smart phones to run Power Point presentations or sophisticated modeling software. Future smart phones will be able to handle corporate applications; manage calls like e-mail messages; and make calls over the Internet. (www.inc.com)
Inc (09/04) Vol. 26, No. 9, P. 52; Fitzgerald, Michael
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