Congratulations! As a new graduate of the Kornblau Real Estate Program @ VCU, you are going...

 

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Congratulations! As a new graduate of the Kornblau Real Estate Program @ VCU, you are going to be working for one of our alumni. Your income seems secure and you'd like to buy a house or condo. This seems like a great opportunity to take advantage of the First-time Homebuyer Program advertised by Virginia Housing (formerly Virginia Housing Development Authority or VHDA). Although Virginia Housing's headquarters is a stone's throw from Dr. Downs' office at Snead Hall, you ask to meet him at Stone Brewing - outside, of course - to do some research on OPM and your financing options. Question: What is the maximum house price that you could afford under the new income limit for the Virginia Housing First-time Homebuyer Program? Assume the new upper limit on income for this program is $80,000. Assume your new annual gross income will be $65,000. Assume this program offers a 3.99%, 30 year loan with monthly payments, uses standard underwriting criteria of (.28/.36), permits a 97% LTV (not a joke, this is the allowable LTV), and that you have no long term debts. For simplicity, also assume that local property taxes and hazard insurance are $0.00. Congratulations! As a new graduate of the Kornblau Real Estate Program @ VCU, you are going to be working for one of our alumni. Your income seems secure and you'd like to buy a house or condo. This seems like a great opportunity to take advantage of the First-time Homebuyer Program advertised by Virginia Housing (formerly Virginia Housing Development Authority or VHDA). Although Virginia Housing's headquarters is a stone's throw from Dr. Downs' office at Snead Hall, you ask to meet him at Stone Brewing - outside, of course - to do some research on OPM and your financing options. Question: What is the maximum house price that you could afford under the new income limit for the Virginia Housing First-time Homebuyer Program? Assume the new upper limit on income for this program is $80,000. Assume your new annual gross income will be $65,000. Assume this program offers a 3.99%, 30 year loan with monthly payments, uses standard underwriting criteria of (.28/.36), permits a 97% LTV (not a joke, this is the allowable LTV), and that you have no long term debts. For simplicity, also assume that local property taxes and hazard insurance are $0.00.

Answer rating: 100% (QA)

Maximum affordable house price 32790469 Calculations as below Maximum debt payment permissibl... View the full answer