Weekly Update: January 9, 2014

First Ever Doug Mayo Memorial Golf Invitational Set for June 27

Mark your calendars now for the first ever Doug Mayo Memorial Golf Invitational, which will be played at Copper Creek in Pleasant Hill on June 27.  All proceeds will benefit the Doug Mayo Scholarship within the HBAI Educational Corporation, which provides scholarships to students entering the trades.  It’s in the early stages, but promises to be an event you won’t want to miss! 

Financing Rules Change Tomorrow – Make Sure You Get Paid in Time

falling-houseCan you say regulatory overreach?  It’s going to be a different financing world beginning tomorrow.  It is more important than ever to make sure a lender understands what type of documentation is required for a loan to satisfy the “Ability to Repay” guidelines of Dodd/Frank’s Qualified Mortgage rules.  Lenders who work primarily with Freddie Mac, Fannie Mae, HUD, VA, Rural Development and local/state down payment assistance programs are moving forward with a “business as usual” approach but understand the documentation requirements have increase dramatically in the loan approval process as of 1/10/13.

   To protect a seller’s interest,  builder and agent  reputation and do all you can to insure the lender is bringing knowledge to the table, it is important to inspect a pre-approval letter by asking some basic questions of the borrower/buyer AND lender. 

  1. How did the buyer meet the lender?  If the lender has completed a refinance for the borrower in the past, there is a chance it may have been a stream line refinance or other type of program that required minimal documentation.  Not the case when doing a purchase transaction.  Or perhaps the loan officer was primarily doing refinances over the last few years and is not fully comfortable with the purchase process.
  2. Did the buyer/borrower provide (at minimum) 2 years of tax returns and W2’s, one month of paystubs, 2 months of asset statements to the loan officer.
  3. Did the loan officer go over these forms in detail with the borrower ( even line by line review of the asset statements and paystub analysis)
  4. Is the buyer/borrower using part time income, dividends/interest, commission, self-employment , seasonal income or any other unique income source to qualify? 
  5. If the answer to #4 is yes, has the file been to an underwriter for a full review?

   If you don’t feel comfortable with how the borrower/buyer or loan officer  respond to these simple questions, it is time to get a lender you trust and has purchase experience involved with the transaction.

 Need Some Health Insurance?

 The HBAI Executive Committee will be discussing a new proposal for group health care at it’sJanuary 21 meeting.  The group can be as small as one, so this has the potential to be a fantastic opportunity to add significant value to your membership.  Stay tuned, it won’t take long to launch it.  Basically it’s through Cooportunity Health.  Here’s an executive summary of where we are today:

Affordable Care Act-What does it mean to an Individual American 

   ACA was signed into law on March 23, 2010 and set forth a number changes to America’s healthcare system. The law has provided implementation overload as its 2,700 pages of legislation has produced over 25,000 pages of regulations. For the average American general confusion has been the norm.   In this short article we hope to provide you the member of ” ” a little clarity on requirements and changes you will see in your healthcare and insurance coverage’s.

   Beginning in 2014 the ACA places a requirement on all American’s to carry health insurance. If you do not have employer provided coverage you are required as an individual to have health insurance or face a penalty at tax filing time. On August 27, 2013, the Internal Revenue Service (IRS) issued a final rule for the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA).

   The individual mandate requires most individuals to have minimum essential coverage in 2014 or pay a penalty. The penalty is called a shared responsibility payment. Some individuals may qualify for an exemption from the mandate so they will not be required to have coverage or pay a penalty. An individual seeking an exemption may do so in advance through an application submitted to the Exchange/Marketplace or after the fact with the IRS through the tax filing process. An applicant can apply for multiple exemptions simultaneously.

   You are considered to have minimum essential coverage for any month in which you are enrolled in one of the following types of coverage for at least one day.

  • An employer-sponsored group health plan offered in a state, which is defined as the 50 states plus the District of Columbia.
  • An individual health insurance policy offered in the individual market in a state.
  • A government plan such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE (a U.S. Department of Defense Military Health System) or veterans coverage  
  • Insured student health coverage
  • Self-insured student health coverage
  • Medicare Advantage plan
  • State high risk pool coverage
  • Coverage for non-U.S. citizens provided by another country
  • Refugee medical assistance provided by the Administration for Children and Families
  • Coverage for AmeriCorp volunteers

 

Who is Exempt from Paying the Penalty?

  • Individuals who cannot afford coverage
  • Taxpayers with income below the tax filing threshold.
  • Individuals who qualify for a hardship exemption
  • Individuals who have a gap in minimum essential coverage of less than three consecutive months in a calendar year, with the continuous period beginning no earlier than January 1, 2014
  • Members of religious groups that object to coverage on religious principles
  • Members of health care sharing ministries
  • Individuals in prison
  • Individuals who are not U.S. citizens and not lawfully present in the United States as defined by Health and Human Services
  • U.S. citizens residing in a foreign country who meet certain IRS tests
  • Individuals who are not members of a federally recognized Native American tribe, but who are eligible for services from the federal Indian Health Service

   The first penalties will be due when individuals file their 2014 tax returns in 2015. A penalty is the greater of either a specified dollar amount or percentage of income. The annual penalties for 2014 through 2016 are noted below. Beginning in 2017, penalties will increase based on the cost of living.

  • 2014: Greater of $95 per adult and $47.50 per child under age 18, maximum of $285 per family, or 1% of income over the tax-filing threshold
  • 2015: Greater of $325 per adult and $162.50 per child under age 18, maximum of $975 per family, or 2% over the tax-filing threshold
  • 2016: Greater of $695 per adult and $347.50 per child under age 18, maximum of $2,085 per family, or 2.5% over the tax-filing threshold

   If the penalty applies for less than a full calendar year, the penalty will be 1/12 of the annual amount per month without coverage. Starting January 1, 2014 you will have the opportunity to purchase health insurance under “guaranteed issue” requirements which ensure that health insurance issuers offer group and individual market policies to any eligible individual in a state, regardless of health status. Prohibition on charging consumers a higher premium based on health status or gender. The ACA requires elimination of annual and lifetime coverage limits, prohibition on coverage limitations or exclusions based on pre-existing conditions.

   The law provides an opportunity for individuals to purchase health insurance during an initial open enrollment for individuals and family that will run from October 1, 2013 through March 31, 2014 for the 2014 plan year. However, you will also have opportunities to buy coverage 60 days after a “qualifying event”, such as marriage, birth or the loss of minimum essential coverage. If you currently have coverage it may not be affected by the changes under the ACA until either your renewal date in 2014 or if and when your plan may lose grandfather status.

   You will have an opportunity to shop health insurance directly with the insurance carrier just as you have in the past. In addition the ACA sets up new health insurance marketplaces which will provide you another location to purchase your health insurance coverage. If you should have income at or below 400% of the Federal Poverty Level you may be entitled to a federal tax subsidy to assist you in purchasing health insurance. These subsidies will vary based on income, age and family composition. If you wish to access these subsidies you must purchase your coverage through the Marketplace. In Iowa we will have two insurance carriers selling individual plans statewide in the Marketplace, Coventry and Co-Opportunity.

   With so many questions you may be asking yourself – where do I begin?  What do I need to know? The best answer is to contact us at Associations Marketing Group, Inc. at 800-798-6772. AMGI’s President Jesse Patton is considered one the states leading experts in regards to the Affordable Care Act. AMGI can assist you in clarifying some of the confusion around the ACA. Certified to assist you on the subsidies and programs through the Marketplace we can also advise if it is better for you to purchase coverage directly from the insurance carrier. Don’t worry about these provisions in the ACA just call AMGI!  

Make a Note of Our New Address

Home Builders Association of Iowa
400 East Court Avenue
Suite 120
Des Moines, IA  50309

Weekly Update: December 26, 2013

We’re Officially in the New Location

home-builder-iowaEverything is moved and the signage is down at our former location in Urbandale.  We’re now within walking distance of the Capitol and right in the heart of the action in a thriving East Village.

From now on, please use the following address:

 

Home Builders Association of Iowa

400 East Court Avenue

Suite 120

Des Moines, IA  50309

 

Our office phone number remains the same:

515-278-0255

 We cancelled the fax number, although the machine is still there waiting if we ever need it again.

Give us until after the holidays to get it looking presentable, but then please stop by to check it out.  If you walk in the front door to the building at 400 East Court Avenue, follow the purple curved wall to the right and we’re the first door on the right, around the corner.

Evaluating New Building Materials

Builders face many choices in selecting new products, materials, equipment, and fixtures to use in the construction of a home. You can determine which building materials best fit your needs by obtaining information about new or unfamiliar items from manufacturers and distributors. Reviewing building material choices in advance may help eliminate non-conforming materials, returns and possibly disputes.

For builders that may not have their own review process, NAHB has developed a guide to assist you in gathering information from manufacturers and distributors when considering the selection of new building materials.

The Multigenerational Household Trend

Family households consisting of three or more generations, or “multigenerational households,” have become increasingly popular. According to the most recent Census, approximately 4.4 million American homes had three generations or more living under one roof in 2010, a 15 percent increase from two years earlier. This is 5.6 percent of the total of 76.4 million U.S. households with more than one person.

There are many reasons for this trend. The recession caused many adult children to return home after college, either because they weren’t able to get jobs that would cover rent, or they wanted to save up to buy homes of their own. According to Pew Institute research, the share of the U.S. population aged 18 to 31 living in their parent’s home increased to 36 percent or a record 21.6 million young adults in 2012.

 Multigenerational households also form so that grandparents can help take care of their grandchildren, and as they age, their children can care for them. This type of arrangement can ease financial burdens as well, with several generations contributing to the mortgage payment and not having to incur the expenses of childcare, retirement housing or professional care-giving environments.

Home builders and remodelers are building and renovating homes to meet the needs of multigenerational households. These designs allow many generations of the same family to live together under one roof yet have private areas as well as combined living space.

Features of multigenerational home plans can include in-law suites within the main home with separate areas for independent living. These often have kitchenettes and en suite bathrooms, and sometimes private entrances from the street. They frequently include “universal design” products, which focus on maximum usability by people of all ages and abilities. Examples include walk-in showers, smooth flooring transitions, and cabinets with pull-out drawers.

Building professionals who have earned the National Association of Home Builders’ Certified Aging-in-Place Specialist (CAPS) designation have received training on how to build or renovate a home so that the occupants can live in the home safely, independently and comfortably, regardless of their age or ability level. They have been taught the strategies and techniques for designing and building aesthetically pleasing, barrier-free living environments. While most CAPS professionals are remodelers, an increasing number are general contractors, designers, architects, and health care professionals.