Wow! I received 2 unofficial calls from lenders yesterday, both stating that they received word from the powers that be, that 3 very significant changes are probably in the works, and are probably going to be pushed through within a couple of weeks:
1) The $8,000 tax credit which you are supposed to receive when you do you 2010 taxes, are going to be available at the closing table. You cannot receive direct cash, but can have the $8,000 applied toward your closing costs…which is essentially cash in hand! I was told that Wells Fargo in Minneapolis is hiring 200 temporary workers, in order to be able to accomodate the expected deluge of home refinances and purhcases.

2) Interest rates may actually make it to the 4.25% mark in the next 2-4 weeks!

3) And here is a huge one: There is talk of allowing people refinance, even if they have a HELOC (Home Equity Line of Credit). Many people have had a difficult time refinancing with the great rates, due to not wanting to cash out their HELOC in order to refinance. The word on the street of lenders is that now people might be allowed to subordinate their HELOC and refinance, and not have to bring a ton of cash to the closing table. This is huge!

How does this affect the Minneapolis and Southwest Minneapolis home real estate market? Well, if rates go even lower, it will bring out even more buyers. If rates get so low that buyers cannot wait any longer, then we could see a move by the homeowners at the $225-$365K (FHA limit) range, to something higher…the mid-range. This then could loosen up homes in the mid-range and then homes in the Jumbo pricing bracket become even more appealing for the mid-range homeowners. We hope.