First Stop 4 Home Loans

As you may know, there are so many things available for first time home buyers — ending soon is the federal tax credit of $8000.  You need an accepted purchase agreement by the end of April and must close by the end of June.  There have been lower rates and of course, plenty of first time buyer programs.  One in particular is the Ramsey County FirstHOME. 

If you’re looking in Ramsey County, or I should say, the “suburbs” of Ramsey County, you could take advantage of a great opportunity.  If you’re looking in the city of St. Paul, then there is a different program you may be interested in — the CityLiving program.  But, if you want to live in one of the many cities* of Ramsey County, this may just be the program for you.

Available as an interest-free loan, is up to $20,000 that you can use toward closing costs and down payment.  There’s a few ways you can use this money to your benefit.  One, is to help your buying power.  The $20,000 may allow you to afford a larger home or higher sale price.  Speaking of sale price, the maximum purchase price on this program is $200,000.  Or, two, you could keep the price range you’re pre-approved for and bring your payment down.  Not a bad deal.  Did you know that for every $10,000 in price, it’s about $70/mo in your payment?

There are a few guidelines that are specific to this program.  Like all first time buyer programs, there are income limits.  These income limits take into account the total income from the household, not just from the person on the loan.  This even includes children 18 years or older that are working.  Along with this, there is a requirement that you have at least THREE years of working full-time.  The FirstHOME program is not a solution to help first time buyers coming right out of school to qualify for down payment assistance.  A year or so ago, a GREAT change occurred to this program — you no longer have to WORK in Ramsey County to qualify, which opens a lot of doors for more people to qualify.

You must attend the first time buyer Homestretch class overseen by the MN Home Ownership Center.  Even if you didn’t have to take this 8-hour course, I highly recommend it.  It will go over everything from the process with your loan, buying the house and even talk about “what ifs” as you’re a homeowner, such as foreclosure prevention.  And hopefully, with guidelines that are getting tighter and tighter, you won’t have the opportunity to get in ‘over-your-head’ with a house payment.  Trust me when I say, this is never my goal.  Sure, I want to help you get the house you want, but it should never be a the expense of you not being comfortable with or able to make the payment.

An interesting requirement for the FirstHome program has to do with ratios.  Ratios are a certain percentage of your GROSS income (pre-tax) that we can use toward your house payment (housing ratio) or your house payment and your other monthly debts (debt ratio), which ever is less.  For all practical purposes, we are limited to keeping your debt ratio under 45%.  In order to be eligible for the assistance, your “housing” ratio needs to be OVER 30% of your gross income.  The purpose then, for the assistance, is to bring your housing ratio down as close to 30% as possible.  If you are under 30% to start, then this program won’t work for you .

Wanna know something else that’s cool with this program??  How about the ability to use this WITH the MN Housing program, where you not only can get a lower-than-market rate,  but also could qualify for another $5000.  Yes, another $5000 — you could receive a total of $25,000 to use for your new home purchase.  Wowsers!

Anyway, this is a super program!   Let’s see if you can make these monies work for you while you’re still a first-time homebuyer.  If you want further information, please don’t hesitate to give me a shout or email.  I am here to help. 

*Cities eligible for the program:
Arden Hills, Falcon Heights, Lauderdale, Little Canada, Maplewood, Mounds View, New Brighton, North Oaks, North Saint Paul, Roseville, Shoreview, Vadnais Heights and White Bear Lake

Last weekend on the radio show we co-host with the MN Real Estate Team and WE Teams of Re/Max, I hosted a fun and informative segment.  Our regular hosts, Ryan O’Neill and Scott Wollmering, were in Florida winning awards from Re/Max.  It was my normal week to be on the air, but I got a bonus … running the show.  Kelly and I presented a busy segment.  Luckily, we had you, the public, call in and make our show way more interesting than we ever could have on our own.

Needless to say, we still needed a topic so we weren’t just babbling away for an hour live on air!  I invited a couple of awesome Realtor partners to join in our fun to help educate our audience.  My partner in crime with the first time buyer seminars, Steve Howe, was there to enlighten the audience on first time buyer topics.  We also had Zach Skattum “in the house” talking about the ever-so-popular REO sales — real estate owed, aka foreclosures. 

On Saturday, our topic was ”B’ Bye or Buy Buy”.  It was all about what was going away, or going Ba Bye in the near future making it so you should Buy Buy.  The tax credit is going away the end of April.  As a first time buyer or repeat buyer, you need to have a signed and accepted purchase agreement.  Here’s a cool thing.  If you’re brave and make an offer on a short sale, you only need to have the seller sign off on the offer.  You do not need the bank to sign off in order to meet the April deadline.  The main caveat is that short sales still take awhile, so there is no guarantee that you will get your sale closed by the second part of the credit requirement — closing by the end of June.

Another thing that is going “B’ Bye” — low interest rates.  Back in January of 2009, the Federal Reserve began a plan to purchase $1.25 trillion dollars of mortgage backed securities (MBS) in an effort to keep the housing market afloat.   Trillion?  How much is trillion?  That is such an incomprehendable number to me.  Anyway, MBS’s are bonds backed by mortgages.  Who knew?  If the bonds sell low, then rates go up.  Invertly, if bonds sell high, rates go down.  So, with the Federal Reserve buying bonds, they’re selling high, keeping the rates artificially low.  During the first week in March, the Fed had already purchased $1.2 Trillion.  At the end of March, they are supposed to be tapered down to zero — no more buying of MBS’s.  With that said, rates are anticipated to rise — to what level, we don’t know.  The guess is somewhere between .5%-1%.  And no one really knows when that will happen.  Will it be immediate or lag a little?  A lot of uncertainty. 

So, with these to LARGE ticket items waving B’ Bye, it’s definitely time to ” Buy Buy” a home.  You don’t want to miss out on free money from the government for the tax credit and for sure you’ll want to take advantage of the low interest rates.  Remember, these are at an all-time 40 year low.  It’s just not going to get better than this.  Now, partner these up with some incredible first time buyer programs and low home prices … and you’ve got the recipe to “Buy Buy”.  Don’t miss out!

Ahhh, the  market.  The market that is flooded with foreclosures — some that are in decent shape, some that are stripped of anything of value and homes that fall somewhere in between.  Here’s the dilemma that many buyers are experiencing … how do I buy that house when the lender won’t finance it due the condition it’s in?  There’s a great question.  With so many opportunities to get a great deal on a house right now, use first time buyer money and take advantage of a 40-year low in rates, how can anyone “make it happen”?

It’s called the FHA 203K loan.  A little background first on where the mortgage market is now.   Most buyers are using FHA financing, which stands for the Federal Housing Administration.  The main reason is the minimum down payment requirement of 3.5%.  Another reason for its popularity is being the closest thing to a “sub-prime” loan.  Now, I am not saying it’s like a sub-prime loan in the true meaning of it.  It is, however, the most lenient loan on credit score requirements.  You need a minimum mid-score of 620.  Conventional loans recently came back to the marketplace with a 3% down loan in part due to the PMI (private mortgage insurance) companies are willing to insure them.  To do 3%, you must be a first time buyer and in most instances, need scores over 700.  My experience these days supports that score being tough to come by.

Since most buyers are using FHA financing, many are unable to get offers accepted on foreclosed properties with any work that needs to be done.  Why?  A few reasons.  First, FHA is a little more strict on safety and structural issues with the homes.  When we send an appraiser to the property, they’re supposed to look for those things that could pose a hazard, such as missing cover plates on outlets, or the biggest one, peeling paint ANYWHERE in/on the home if the house was built before 1978.  Those homes have a higher chance of the paint being lead-based.  If you eat the paint chips, you could get sick — too many, like a little kid might, and you could die.  That’s scary and that’s why FHA is very clear on their position.  So, if any issues are found, they must be fixed prior to closing on the home   Second, many banks won’t accept FHA financing.  Due to the amount of work potentially required by an FHA appraiser, they don’t want to have a deal fall through if an FHA appraisal comes in with work orders.  In 99% of the cases, the bank won’t fix the issues.  Banks are known for selling the home “as is” and really, this makes sense.  They never lived there, so they really can’t comment on water damage or storm damage or stolen fixtures.  Yes, some people DO take the toilet and sink.  Seriously, what are they going to do with that stuff?  Nothing, I would assume – it’s just a way to say “I’ll show you bank for taking my house away”. 

So, if the bank won’t accept FHA financing and most people are buying this way, how can these foreclosures be sold?  The financing that can handle this is called the FHA 203K loan.  Under this program, there are two sub-programs, the streamline 203K and the full-blown 203K or “K” as I call it.  This is a rehab loan that would allow you to get into a home BEFORE those repairs are completed.  The repairs would be addressed in a bid which is added to your loan size.  There are only a handful of companies that do these loans, mostly because they are labor-intensive and carry a lot of risk.  Cornerstone Mortgage has been doing this for years and understands the niche that is filled by doing the rehab loans.

As I mentioned, there are two sub-programs.  The streamline “K” is a more condensed rehab loan.  The maximum addition to your loan size is $35000 including the “K” costs.  The main difference with the streamline vs. the full-blown “K” is that you cannot do any structural or foundation work on the streamline.  You can paint, carpet, replace the furnace, add A/C, change lighting, add a bathroom, do the roof and even something that isn’t re-habby at all like buying appliances.  Most importantl, you can fix those items that are required by the appraiser to bring the home to FHA standards.  Another REALLY cool thing about this streamline “K” is that Cornerstone CAN do a smaller version of this in conjunction with the MN Housing Finance Agency loan (max $15000 including “K” costs) and you could still get $5000 in assistance.  We can do the the regular version with both the City Living and Dakota County programs, which are programs that just received a big chunk of money at a low rate.  And speaking of rates, if you don’t use a first time program, then the rate on the 203K loans will be about 1/4 – 1/2% higher than a normal FHA loan.  Trust me when I say, this is a screaming deal even at a little higher rate.

The second sub-program is the full-blown “K”.  The loan amount that can be added to your primary loan is UNLIMITED, assuming two things — 1) you can qualify for the loan and 2) you stay under the FHA loan limits, which in the 11-county metro area are $365,000.  In this rehab program, you can do anything — like items mentioned above, doing an addition to the home and get this, even tearing down a home just as long as you re-build on the existing foundation.  Yes, seriously.  Of course, you’d have to get that home pretty darn cheap to keep a new home build under $365,000.

You may be thinking, ‘this is cool, but how do I qualify for this?’  Are there any special requirements?  Nope, not really.  You need the 620 score or higher, need to be able to qualify for the higher loan amount and need to do a little extra in terms of paperwork and hiring a contractor.  We have a team of awesome contractors that are ready to give a free bid based off what your needs are and what the inspection may bring to your attention.  We don’t require you to use our preferred contractor partners, BUT, we highly recommend it.  I can tell you stories as to why another time!

Okay, what’s the process?  More than likely, you won’t be looking for homes that need the work.  But, the appraiser may just require that work has to be done and now the 203K program becomes a necessity.  Essentially, you locate the home, make an offer using the 203K (since many bank-owned properties won’t accept regular FHA financing), we have an inspection and potentially have the contractor out there with you to assess the scope of work and provide a written bid.  This information goes to processing with your file and an appraisal is ordered using the purchase price PLUS the bid.  The home will be valued “as-is” and also given an after-repairs value.  Here’s an example of built-in equity.  I helped finance a townhome that  just required new flooring throughout and then the client decided to get appliances (were none in the home)  – home price was $115,000, bid items added up to $13000 — it appraised at $150,000.  WOW, that’s awesome.  The work, not that extensive at all nor value-enhancing per se, just brought the home to a level playing field with the other townhomes that are in good shape.

There is more to the process, but I see that this post has become quite long.  You can wake up now!!  To summarize, you DO have a way to do an FHA loan and still purchase a home that needs work or is bank owned.  We have the opportunity waiting to help you and I do profess that this is one of those programs I have done quite a bit and with great success.  I hope I can help you make the house you’re buying a “dream home”.

Another month, another seminar frenzy.  It’s all about you — it’s in my Vision for You and truly is part of who I am.  To me, education is key to owning your first home.  Sure, I want to help you navigate through your first financing experience on a house.  The Realtors I work with want to help you find your very first house.  Business is business, right?  Partly.  As a team, we have an alterior motive — we want you to be as prepared as possible for buying a home.  So, to this end, I dedicate three nights a month to first time buyer seminars with the help of some very awesome Realtors.

So, what’s in it for you?  My hope is that you will walk away with a greater understanding of what the process is, how to get started, what programs can help with down payment assistance and other information to understand what you’re “getting into”.  There are many people out there, maybe you included, that have a desire to own a home, but hang in the shadows due to fear, credit challenges or even stories about your friend’s bad home-buying experience.  With something so big as buying a house, you do not want to go in blindly, not to mention work with people that don’t have the market knowledge and extensive resources for assistance.   This process should be educational, stress-free and believe it or not, fun!  I get reminded quite often while talking to people refinancing that lenders and Realtors are not created equally.  Not everyone gets to experience this knowing the facts, being given options on first time buyer programs or being led through the process.  Many of my clients who weren’t first time buyers with me were slammed into the system of homeownership without a clue about the loan they were doing, consequences of certain programs, and some were even put into loans that they didn’t have to be in. 

How would you like to get a grip on your first home-buying experience?  The awesome team I surround myself with would love to help “get your education on,” with NO obligation.  We’ll discuss the process from the first step of pre-approval to the last step of closing on your home and getting the keys!  Oh, and did I mention it’s FREE*?

I have THREE seminars coming up in March.  These are the same seminars, so feel free to pick the one that fits with your work or home location. 

The South metro seminars are on Monday the 15th and Thursday the 18th from 6:30-8pm at the Cornerstone Mortgage office located at 436 Gateway Blvd. in Burnsville.  I will be presenting these steps with trusted partners, Brandon Hedges — Homes of Minnesota Team, as well as Steve Howe – Minnesota Real Estate Team.  We will help you take that first step to home ownership. 

If the North metro is a better fit, then join us Thursday the 25th from 6:30-8pm at the Shoreview Community Center — 4580 Victoria St N #203.  This time, I have the pleasure of presenting with Steve, as well as Tony D’Agostino, also with the Minnesota Real Estate Team. 

Trust me — you will go away knowing so much more about the process AND will feel more comfortable now that you’re armed with information – info that many lenders just don’t share!!  Both will be a fun and educational evening. 

Please register by calling 952-808-0042 as space is limited.  Hope to see you there!

*ALL of our team’s seminars are FREE of charge. Cornerstone Mortgage is proud to be a drop-off site for the CAP agency, which is a non-profit organization that collects food items and gently used clothing for Scott, Carver and Dakota Counties. If you can, please donate a canned food item, baby food or clean clothing so we can continue to support the families in need in the communites we serve!

The last few years have been plagued with first time buyer programs.  This is a very good thing.  In 2008, the first time buyer tax credit was first introduced.  It was quite a bit different than the tax credit now.  “Back then” the program wouldn’t let the buyer take advantage of the federal tax credit AND a first time home buyer program, such as one with a lower rate or down payment assistance. 

Then the second credit was introduced in 2009.  Every year, it’s been getting better.  In 2009, the two programs could be combined which gave buyers the best of both worlds.  Money for purchasing and money to help after the fact.  Thousands of people took advantage of this credit and quite a few of them “took advantage” of the credit — meaning, people cheated the system — there weren’t enough stop guards in the system.  I even heard someone had their child apply for the credit.  Hmmm, think you need to be 18 to buy a home.  In any case, people scrambled to take advantage of the credit by closing on their home prior to December 1.  First time buyers were coming out of the woodwork.  It was a mad rush to buy, close and amend the 2008 taxes to get the money. 

Psych!  Guess you really didn’t have to buy and close by the end of November.  Hail to the government; they extended the credit.  Not only that, they made it current homeowner “friendly”.  The new rule, as you probably know, is you must have a signed/accepted purchase agreement by April 30th and must close on the house by June 30th.  The credit is equal to 10% of the sale price or $8000, whichever is less, for a first time buyer.  The current homeowner can qualify as long as they have owned their primary residence for a consecutive five of the last eight years.  Similar situation — 10% of the sale price or $6500, lesser of the two. 

Here is what you NEED to know.  We all like to get our refunds as quickly as possible!  Who wouldn’t?   So, e-filing is the way to go.  And many people have done that.  First, you can amend your 2009 taxes anytime after you close on the home.  You’ll need to file a 1040x (form for amending) and the 5405 (form for the credit).  The urgent piece of information is you CANNOT e-file.  Here is information from the Minnesota Homeownership Center:

“Because of the documentation requirements for claiming the credit, taxpayers who claim the credit on their 2009 tax return must file a paper — not electronic — return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit”

So, thanks to people falsifying taxes and taking advantage of free money, you’ll have to do the lengthy step of filing by paper.  And timing on these refunds?  I have heard anywhere from 14-16 weeks.  It doesn’t help that it’s tax time.  Oh and thoughts about whether they’ll extend the tax credit.  I really don’t think so.  But, hey, I could be wrong.  If they do extend it, you can count on a new blog!

What is the Take Credit program?  It’s a great opportunity to save money yearly on your taxes.  And what a better time to think about taxes when we are so entrenched in them right now!! 

Take Credit is a Mortgage Credit Certificate program, not a loan – it gives you a credit EACH year in the amount equal to 20% of the mortgage interest you claim yearly to use toward your tax LIABILITY.  Okay, so that’s weird … who wants a tax liability?  Wouldn’t it be better to get money back?  Great questions!  You actually WANT to owe money at the end of the year.  To make this so, you would increase your W4 exemptions for federal withholdings.  This way, you’ll get more money back in your paychecks, pay less in for taxes to the government and then, will have a liability that you can use this credit against.

First time buyers can take advantage of this program in the city boundaries of Minneapolis and St. Paul.  You must be a first time buyer, which means you could not have owned a primary residence in the last three years.  We prove this fact by getting the last three years of your tax returns.  Here are some numbers to know for limits:

$83,900 – maximum household income for 1-2 people

$92,290 – maximum household income for 3+

$276,870 maximum sale price limit

There is no “special” rate for this program because again, it’s not a loan.  You will use this with an investor that allows for the MCC.  So I suppose you want a visual?    I can do that, but first, one thing to know if you don’t … 100% of  your interest on your mortgage as a homeowner is tax deductible.  With this program, that is reduced by the 20% credit, so now you can only write off 80% of that interest.  For example (finally, huh?):

$175,000 Loan Amount

5.5% Example Rate on a 30-Year Fixed

$994  Monthly Principal and Interest Payment

$9566 Total Interest Paid in Year One

$1913 — 20% of the Total Interest Paid, Mortgage Credit

That’s a pretty big number to be able to have as a liability.  Think about it.  If you were normally getting $2000 BACK, then you have $3900 to work on getting throughout the year by changing your W4s.  How do you even start determining what that W4 change should be?  You can certainly see your HR person or accountant.  Or, you can visit a great IRS website to run some scenarios.  Doesn’t it seem like you’re taking money from the government??  Let’s not go that far, but hey, I am sure they owe you something!!

A few things to note.  The MCC program cannot be used with a Mortgage Revenue Bond program, i.e. first time buyer program that uses interest-free bonds to give you a lower-than-market rate.  This program DOES have a recapture tax, which I will address in Tips & Tidbits post soon.  You can do a FHA, VA or Conventional financing and the loan must be a fixed rate.  With rates as low as they are on 30-year mortgages, it would be silly to do an Adjustable Rate Mortgage anyway.  Something you may be wondering … is it a “use it or lose it” kind of program?  Sort of.  You can carry over any unused portion for up to three years.  So let’s say in the example above you owe $1000 to the government.  Due to your credit, you owe NOTHING, but you still have $913 to use for next year’s taxes, which means you need to get on adjusting your withholdings up ASAP.  Let’s say your liability is actually $2000.  Then, you still owe the IRS money, but in that example, it’s only a mere $87.  Pretty sweet deal, huh?

One of the best parts??  If getting money toward your liability wasn’t enough, right?  If you do FHA financing, which so many people are doing these days, we can use that 20% as assistance to help you QUALIFY for more!  Yes, you heard me right.  So, using that same example of your $1913 credit.  If you divide that by 12 months, your credit PER MONTH for qualifying purposes is $159.  In real dollars, that means if you kept the same house payment, you could INCREASE your purchase power by about $20,000, depending on property taxes and homeowner’s insurance.

So why don’t people do this program or why haven’t you heard of it?  First, most lenders don’t do the MCC program and why, I don’t know.  There is a cost to you of $575.  You can see though, that one-time fee is WAY worth the financial benefits you will see yearly.  So, if you need help qualifying for more house in the cities of St. Paul and Minneapolis … I can help and would love to!

If it wasn’t great enough that we just got a new issuance of money in the Dakota County area; we now have NEW first time buyer money in the Minnapolis and St. Paul area under the City Living Program. This money is just available in the geographical limits of the Minneapolis and St. Paul area, so no other areas of Hennepin County or Ramsey.  Having this program available is such good news. 

How do you qualify for this?  First, you must be a first time buyer, someone who has not owned a primary residence in the last THREE years.  There are income limits you must fall under and HOUSEHOLD income is calculated off all members in the household over age 18.  Here are the limits:

83,900   1-2 person household

92,290   3+ person household

There is also a purchase price limit of $376,870.  You cannot go over $1 above this!  I don’t think you’ll have any problem since this limit is quite sufficient to handle any properties that are perfect for first time home owners.  The sale price/purchase price limit is $376,870.  Another thing to know is NO personal property can be included in your purchase agreement.  That means anything that isn’t attached to the home — applicances are the most commom.  Don’t panic though — you will still be able to get these things agreed upon.  You definitely want to make sure you’re working with a knowledgable agent in this area.  I have a few partners that I can highly recommend!

Want the REALLY, REALLY good news?  Rates … and it’s all about rates isn’t it?  It shouldn’t be; but again, that’s another post.  Please note that you still must qualify for a regular loan.  Here’s the way I like to explain this.  As a buyer, you need to qualify or meet the guidelines for an FHA, VA or conventional loan.  Let’s call this the “Cake” you’re dying to eat!  Once you’ve got this qualification, then we can see if you meet the guidelines for the City Living program, which we’ll call the “Icing”.  If you’re like me — cake is ONLY good with icing!  So, again, you have to qualify for the cake and then have to meet the qualifications to get the icing drizzled all over it.  Nummy.  The “Sweet” taste of this is a rate of 4.75% on a 30-year OR a rate of 4.99% WITH 2% of the loan amount to be used toward down payment or closing costs.  Another important point, you DO need $750 of your own  money into the transaction, which cannot be a gift. 

They will FORGIVE this second loan if you occupy the home for 7 years.  If you sell under this time, the full amount you got for the second loan is due.  Fortunately, this loan is 0% interest and NO payments are ever due during your loan.  It’s like getting a “loan” from Mom and Dad — “just pay us back when you’re done with it”.  So, you sell, you pay back.

Since this is a first come first serve program, you definitely want to make sure that you’re not only pre-approved with a lender that knows these programs, but also knows how to explain the important nuances of them.  I can help you navigate the waters and make sure you’re sailing strong  during your trip as a first time home owner!!!!!!!

Can you say FINALLY???  We have been waiting patiently, or maybe for some, impatiently, for more money to come available.  It’s here.  And a week later, you will see money come out in the cities of St. Paul and Minneapolis for the City Living program – very similar to this.

The skinny on this first time buyer program?  Well, you need to be one, which means you could not have owned a home in the last 3 years.  Because this is a bond program, you will be offered a lower than market rate and good news … it doesn’t change with market volatility.  The rate is 4.99% AND depending on your household income, you could qualify for up to $10000 in down payment assistance.  The first time buyer assistance isn’t forgivable, meaning you need to pay the zero interest, down payment money back when you sell.  If you get $7000, then you pay back $7000.  It’s pretty cool — here’s money to help and just give it back when you’re done using it.  Oh is this awesome!

There are sale price and income limits for this program, as with all bond programs.

$83,900 1-2 person household

$92,290 3+ household

Maximum Sale price is $276,683

This isn’t like the other first time program they had called Silver Lining.  It’s not as restrictive.  No crazy strings like the house needs to appraise at 1% higher than the purchase price and there is no requirement for a special home inspection.  One thing that IS required is you have to attend the Homestretch class where you can sign up at http://www.hocmn.org .  If you’ve taken this course, it’s acceptable to use your current certificate of completion pending it’s not over a year old from the date of closing on a house.

So, now you have the AFTER closing tax credit up to $8000 and you can get up to $10000 BEFORE your purchase to use toward down payment and closing costs.  By all means, please call if you have any questions or want to take advantage of this program.  It’s first come first serve, so get out there and buy some of those great deals in Dakota County.  Oh and one important point, you DO need $750 of your own  money into the transaction.  This cannot be a gift.

By the way, not all lenders have access to this program.  Make sure you’re working with an expert in first time buyer programs.  It’s important you’re educated on how the program works, what the recapture tax is and other parameters for the program.