Monthly Archives: July 2018

Permit to Completion – Builder Timeline Depends on Where and Why

Despite complaints about labor, lot, and material shortages, builders needed no more time to build a home last year than they did in 2016.  The time did increase compared to 2015 by about two weeks.  Using data from the Census Bureau’s Survey of Construction (SOC), the National Association of Home Builders (NAHB) concludes that the average time to build a single-family house was 7.5 months.  The actual building time was about 6.5 months following a typical delay of around 30 days after the permit was authorized.  Data from the 2015 survey showed the time from permit to completion at 7 months.

The range however is wide, from less than a month to more than 6 years.  Much depends on who is building the house, for what purpose, and where.

, writing in NAHB’s Eye on Housing Blog, says that houses built for sale took the shortest time in 2017, 6.9 months from permit to completion while houses built by owners acting as their own general contractors took 12.3 months. Homes built by hired contractors were in the middle at around 9 months.  Where homes were being built for sale or were custom homes built by contractors on the owner’s land, construction typically began within a month after the permit was pulled while owners overseeing their own construction had a one-month lag.

 

 

It took the longest to build a home in the New England division, 10.4 months, followed closely by the Middle Atlantic at 10.3 months. The East South Central, East North Central, and Pacific divisions also exceeded the 7.5-month national average.  The shortest period, 6.4 months, was in the South Atlantic division.  As to permits, the lag before construction started ranged from 17 days in the Mountain division to 39 days in the Pacific.

 

 

The total building time was considerably shorter inside than outside metropolitan areas, a pattern that held in all census divisions but the West North Central division.  Some of the location differences were striking; with construction outside metro areas taking more than a third longer in New England and the Pacific.

 

 

The SOC also collects sale information for houses built for sale, including the sale date when buyers sign the sale contracts or make a deposit. Looking at single-family homes completed in 2017, 31.6 percent of homes were sold before construction started, 28.8 percent while under construction, 11.3 percent within a month of completion, and 16.6 percent sold after completion. The percent of single-family houses completed in 2017 and remaining unsold as of the first quarter of 2018 was 11.6 percent.

BY: JANN SWANSON
Jul 16 2018, 5:43AM

Freddie Mac Extends Appraisal Waivers to Condo Loans

Persons who buy or refinance a condominium using a Freddie Mac mortgage may soon be able to skip having a traditional on-the-ground appraisal.  The company announced on Thursday that condos will soon be eligible for its automated collateral evaluation (ACE) appraisal waiver.  The program, which has been available for single-family purchases and refinances since 2017, gives eligible borrowers the ability to realize savings in cases where the system determines a traditional appraisal isn’t needed.

ACE uses data from multiple listing services and public records as well as a data base of historical home values to determine collateral values, analyzing the information with its proprietary models. Freddie Mac says some borrowers can save as much as $500 on appraisal fees and close 7 to 10 days faster with a waiver.  

ACE waivers will not be available for all condo properties. To determine eligibility, lenders must submit loan data through Loan Product Advisor®, Freddie Mac’s automated underwriting system.  Where ACE finds the estimated value or purchase price acceptable, the lender may receive representation and warranty relief related to the value, condition, and marketability of the property when the loan is received by Freddie Mac.  Even if a property is found eligible for a waiver, the lender and/or borrower can still opt for a traditional appraisal.

“We continue to see the share of condo loans we purchase increase, especially among first-time homebuyers,” said David Lowman, executive vice president of Freddie Mac’s Single-Family business. “ACE for condos will help increase the efficiency of the mortgage origination process, offer greater certainty and help save our clients, and their customers, time and money. We’re consistently innovating and improving our Loan Advisor Suite® to meet the needs of our lenders, today’s borrower and the borrower of the future.”

ACE for condominium purchases and refinances will be available beginning July 16, 2018.

Jun 28 2018, 10:22AM