Fannie & Freddie Want to Make it Easier for Gig Workers to Get Loans

Freddie Mac and Fannie Mae, the country’s two largest sources of mortgage money, are reportedly working on ways to make qualifying for a home purchase easier for people earning money in the “gig” economy.

The gig economy refers to activities such as driving for Uber, shopping with Instacart, renting your home out on Airbnb, or any other job that allows workers to set their own hours, work for as little or as long as they please, and get paid as an independent contractor. Last year, a report released by Intuit, which owns TurboTax, estimated that roughly 34% of the U.S. workforce earned money in the gig economy, and projected that number to grow to as high as 43% by 2020.

While these “gigs” have proven to be reliable sources of income for many Americans, using them for mortgage qualification purposes has been problematic. Lenders typically look for 2-years of documented income and reason to believe that those earnings will continue for several years. Earnings from gig economy jobs don’t always neatly fit into these boxes, making it difficult for lenders to use them for mortgage qualification. Fannie Mae and Freddie Mac are looking for ways around this, so that people earning thousands/month in the gig economy can use that money to gain access to credit in the mortgage market. Neither Freddie nor Fannie have disclosed what options they are pursuing, but Freddie has confirmed a partnership with Loan Beam, a software company which provides automated income verification for gig-economy workers. Depending on what Fannie and Freddie implement, this could help many U.S. workers who supplement their income in the gig economy get on the path to homeownership.

A Historic Decision: California to Require Solar Panels for New Homes

On Wednesday, the California Energy Commission unanimously approved a policy requiring virtually all new homes to incorporate solar panels.  The requirement will take effect in 2020, making California the first state with such a policy.

California is already the nation's leading solar market, with over 5 times more solar installed than any other state, and roughly 40% of the total solar installed in the U.S.  According to the Solar Energy Industries Association (SEIA), the solar industry has created $43 billion of investment in California's economy, and employs more than 86,000 people.  The SEIA hopes that this historic policy decision with set a precedent and pave the way for other states to follow suit.  New Jersey, Massachusetts and Washington, D.C., have already begun considering legislation that would require new nuildings to be solar-ready.

Of course, for current homeowners, or people buying homes built before 2020, this policy won't apply.  Still, this policy is a big step towards helping California meet it's goal of getting at least 50% of it's electricity from non-carbon producing sources by 2030.

If you've considered installing solar-roof panels on your home and would like to explore your options, feel free to give us a call.  We would be happy to connect you with one of our trusted green-roofing experts.

Going Green: Eco-Friendly Home Improvement Options

The last RealSmart Fund Fixer Mixer was a special “50 Shades of Green” event, to which we invited a few of our trusted vendors to provide information on eco-friendly home improvement options. From solar panels to fireplace inserts, there are many ways to upgrade your home’s energy efficiency, at various levels of affordability. Below is an overview of our vendors and some of the green home improvement options they offer.  If you’d like details on options not listed, feel free to give us a call and we will point you in the right direction.

Mr. Roofing - Green Roof Options
This family owned and operated business based in South San Francisco has fully embraced green roofing practices. They can install building-integrated and conventional photovalic solar systems (solar paneled roofs), solar tunnel skylights, green live roofs, and more. Mr. Roofing is a Diamond Certified company, and having used their services many times ourselves we can attest to the quality and relliability of their work.

If you’d like to explore green roofing options for your home, give Mr. Roofing a call, ask for Carlos, and tell him RealSmart sent you.

(650) 605-3927
Ask for: Carlos Rodriguez
info@mrroofing.net
www.mrroofing.net

SDI Insulation - Energy Efficient Insulation Upgrades
While most people overlook the quality of insulation when buying a home, it does play a key role in how much energy you use when running the heater or A/C. If your insulation is old or of poor quality, chances are you are spending more on your monthly energy bill than needed. The team at SDI Insulation will test your home’s energy efficiency, identify area’s of weakness, and upgrade them in order to decrease your monthly energy usage. If you’d like to test your home’s energy efficiency and explore your options for upgrading, we highly recommend you call the experts at SDI Insulation for a free estimate:

(650) 685-5500
Ask for: Joran Stromberg
info@sdi-insulation.com
www.sdi-insulation.com

Carpeteria - Green Flooring Options
Our friends at Carpeteria offer a number of fantastic envronmentally concious flooring options. Among them are Mohawk carpets, some of which are made with up to 100% recycled material. Mohawk recycles around 3 billion plastic bottles annually for use in over 500 of their products. They even recycle old carpet fibers for use in other industries.

Carpeteria also carries Shaw’s Epic engineered hardwood floors, which are made from 50% less newly harvested wood than conventional engineered wood flooring. Their Scuffresist Platinum coating also makes them remarkably durable.

For more information call:
(650) 965-9600
Ask for: Vick Balian
vick@carpeteria.com

Shelly's Top Green(ish) Paint Colors

We recently held a “50 Shades of Green” themes St. Patty’s Day party, to which we invited several of our trusted vendors to showcase eco-friendly home improvement options. In keeping with the theme of going green, we also had our resident interior designer, Shelly, select 6 of her favorite shades of green paint colors (all from Benjamin Moore’s selection). Admittedly, these colors are only vaguely green (the subtle green hues don’t show well online), but if you’re going to paint part of your home green, you’re better off going with an earthy understated tone rather than full on shamrock green. But hey! It’s your home, and if you feel like celebrating St. Patrick’s Day year-round then that’s your prerogative.

With Spring officially upon us, now is as good a time as any for a new look in your home. If you think any of these colors would look good in one of your bedrooms, as an accent wall in the living room, or anywhere else, stop by the RealSmart office (50 Edgewood Road, Redwood City) and pick up a sample!

We have plenty of each of the 6 colors shown. Please note – the images below are computer generated conceptual renderings pulled from Benjamin Moore’s website.

Cloud Nine: 2144-60 (walls)

Silken Pine: 2144-50 (Fireplace Wall) 

White Marigold: 2149-60 (walls) 

Mellowed Ivory: 2149-50 (walls) 

Old Prairie: 2143-50 (walls) 

Camouflage: 2143-40 (walls) 

What Does Legal Marijuana Mean for CA Real Estate?

Thanks to a yes vote on Prop 64 in 2016, recreational marijuana became legal on January 1 of this year. While local governments grapple with how to regulate the once illicit industry, and community leaders struggle to reconcile their disdain for the devil’s lettuce with its status as a revenue generating crop... some real estate investors are licking their chops at the opportunity they feel is headed their way.

Luckily for investors in California, the precedent for legalization has already been set. Colorado voted for legalization 4 years ahead of us, and since that time the real estate market has been thriving. The most obvious growth has been in industrial real estate, where growers look for warehouses to set up shop. According to DCT Industrial Trust, a company specializing in industrial real estate investment, marijuana legalization drove up the cost of warehouse space in the Denver Area by 60% in 2015, and lease renewal rates by 25%. Of course, here in the Bay Area where industrial space already comes at such a premium, growth will not likely be as dramatic. Less impacted markets just outside the Bay Area might offer more alluring opportunities.

The residential market stands to benefit as well, though in a less quantifiable way. The job growth created by legalization in warehouses and dispensaries, but also in auxiliary industries like HVAC and security, can increase the demand for housing. It’s much like how the tech boom in the Bay Area led to dramatic growth in trades like plumbing, electrical, and carpentry. This isn’t to say a weed boom could impact the market to the same degree the tech boom has, but it could have similar effects on a much smaller scale. However, investors need to be aware of local regulations around the industry, as they vary from city to city, and could limit or even prohibit the use of land for cultivation or sale of marijuana.

Fed Raises Interest Rates Again - What This Means for Your Loans

On Wednesday, March 21st, The Federal Reserve raised interest rates (prime rate) by a quarter percent. For people with a traditional 30-year fixed, this has no effect on their loan. But it could affect those who have ARM loans that are adjusting, equity lines of credit and credit cards. Those loans are tied to the prime rate, and will see the actual increase show up within 60 days.

Items such as mortgages and credit cards are benchmarked against the prime rate, and banks are in charge of implementing such Fed Rate changes. Higher rates have already begun hitting the housing market, and though still low by historical standards, mortgage rates are on the rise at a time when inventory of affordable houses is low.

You may see an increase in your monthly payments if you have an adjustable-rate mortgage that is maturing, a home equity loan, or balances on credit cards. Furthermore, with the new tax changes that have occurred, the interest you pay on Home Equity Lines of Credit (HELOC’s) are no longer a tax deduction. Given that information, now may be a good time to consider refinancing into a 30-year mortgage to avoid this increase in payment or to consolidate your 1st and 2nd mortgage into one affordable fixed payment.

7-Story Residential Project Approved Just Outside Downtown RWC

The Redwood City Planning Commission on Tuesday approved a 7-story, 125 unit housing project just outside of downtown Redwood City at 353 Main Street.  The project will stretch 2 stories higher than the adjacent Township Luxury Apartments, and will take the place of an existing 1-story office strip.

353 Main will include 19 units of below market rate housing, fulfilling the city's 15% requirement for new residential development.   Also, since the project will offer 7 units to families earning less than half the area income ($60,000/year for a family of 4), it will qualify for a state density bonus allowing the building to increase its size to 143 total units.  Those 7 units are expected to rent for $888/month.

All of the below market rate housing will be retained as such for 55 years after occupancy

Commissioners requested the Developer, ROEM Development, make 20% of the units BMR and maintain the housing protections for 99 years, but they did not mandate it.  As such, the those conditions will not likely be met.

More information available at the city website: 353 Main Street