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| May 25, 2012 |
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by Peter Miller
Peter G. Miller
A funny thing has happened with the little red school house: Congress has
determined that local folks should have more control over how their education
dollars are spent, an idea which is likely to be applied with equal fervor to
housing money.
"Ed-Flex" -- short for the "Education Flexibility Partnership Act," provides
that instead of mandates and demands directed from imperial Washington, state
officials and local school boards will have more control over some $11 billion
collected by the federal government for use in public schools. The program is
already used by 12 states, but will now be available nationwide.
The Ed-Flex concept is not a partisan issue -- it passed 330-90 in the House
and 98 to 1 in the Senate. But it's evidence that the days of blank checks for
federal departments may be at an end.
HUD, too, is now before Congress trying to increase its budget. The huge
department is asking for $28 billion -- up some $2.5 billion from last year.
And what does it want to do with such money?
First, it wants to encourage companies to expand or relocate in poor areas --
and, of course, such a effort would also create a need for more HUD programming
and spending.
Then there is the continuing effort to have appraisers act as home inspectors.
This is an inherently unwise idea because appraisers are not trained to inspect
homes and do not open electrical service boxes or climb on roofs but -- of
course -- if approved there would be a need for more HUD programming and
spending.
In total HUD wants about $900 million for such new programs, but before we
spend the money, consider that:
In the same way that local officials now have greater control over education
dollars, the same must happen with HUD funding. The Department is too big, has
too many programs, and is charged with an enormously difficult job which is
often handled best at the community level.
What's needed is "Home Flex" -- a program that moves HUD dollars into local
communities with fewer mandates and requirements. If such an approach is good
enough for schools, why not for housing? You can bet that a number of
representatives and senators are asking the same question.
In September we looked at the subject of interest rates and wondered how low they could drop. It was
pointed out that overnight bank rates in Japan were then at .25 percent -- and
could fall lower.
Now The New York Times has
announced that "Japan's central bank pushed overnight interest rates to the
unprecedented level of effectively zero this week." ("Japan Lowers Rates Again,
and for Banks it's a Big Zero," March 6, 1999.)
The paper says the overnight rate for banks has fallen to 0.02 percent. At this
rate, the cost to borrow $1 million for a year is about $98.55.
But "unprecedented?" Hardly. Such a rate has been seen before -- and in the
U.S. As the September column noted:
Q
What is a "trailing spouse?"
A Sometimes a job offer elsewhere
requires a family to move. The catch is that while one individual has a job,
that may not be true of the wage earner's husband or wife -- the so-called
"trailing spouse."
The problem is that families may want to quickly buy in their new community,
but initially only have one income where there used to be two. The result is
that their ability to borrow is substantially reduced.
Lenders regard such situations on a case by case basis. Does the trailing
spouse have the training and skill to acquire a new position with a given
income level? Is there an earnings history, written job offer, or marketplace
demand for the spouse?
If possible, it's best to have jobs for each income earner lined up before
moving. If that's not possible, speak with lenders regarding the evidence they
will require to support a loan application before a second job is obtained.
More and more local assessment offices are placing property records online. A
good links collection for offices around the country is maintained by the International Association of
Assessing Officers
Published: March 16, 1999 Use of this article without permission is a violation of federal copyright laws.
Editor's Note: This article reflects the opinions of Peter Miller only and not necessarily the views of this or any other publication, organization or Website owner. |
Real Estate News Network
Today's Real Estate Outlook
Mortgage Rates
30 Year Fixed: 3.83% 15 Year Fixed: 3.05% 1 Year Adj: 2.73% (U.S. Weekly Averages) Today's Headlines 03/16/1999 01:00:00 AM
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