If you are a real estate agent, I would imagine you would want to have as much information as possible about the property your client wants to either sell or buy. One bit of information you should know is the number of the census tract the property is located in. This number can be found on the Geocoding Website published by the Federal Financial Institutions Examination Council.
Why is the census tract number of the property important? Well I am glad you asked! Some lenders will offer special financing programs for properties in specific census tracts. These special financing programs are usually offered to comply with the Community Reinvestment Act , or CRA as it is more commonly known.
For example, I am able to offer a loan program that only requires a 5% down payment and does not require mortgage insurance, as long as the property is in a targeted census tract! This program has become more attractive because of the recent rise in both the upfront and monthly FHA insurance premiums.
How do you use this information? As a listing agent, you might want to add this information to your property description. For example, "5% down with no mortgage insurance available for this home - contact (insert your lender's name) for details".
As a selling agent, you might show your clients property in a targeted census tract if the special financing available will help them qualify.
Another possibility is to show your clients a single family home instead of a condominium. For example, if 5% down was available with no mortgage insurance, and the client did not have to pay homeowner association fees, then the client would be able to borrow more because these expenses would not be added to their debt-to-income ratio.
It is very important to work closely with your lender with this type of financing because the program can change. The list of approved census tracts can change. The qualifications for the program can change. The terms of the program can change. Just because you had a transaction close recently with this type of financing does not mean it will be available for your next transaction. Get on the phone, call your lender, and make sure the property is in a targeted census tract!
Having the census tract information can help you add more value to your client! Adding more value will make your client happier, and happier clients means more business!
Would you like to talk to Phil - call or text (650) 222-0386
Phil Caulfield NMLS #386911 has been helping people obtain mortgages since 1985. The views, articles, postings, and information listed at this website are personal and do not necessarily represent the opinion or the position of Cardinal Financial LLC.