Melissa Savenko's Richmond Real Estate Review

Changes to FHA Financing - Mortgage Insurance Premiums Going UP April 18, 2011

Happy Valentine's Day to us!  On February 14, 2011 the Department of Housing and Urban Development promulgated formal guidance on an increase in mortgage insurance premium ("MIP") for FHA loans, effective April 18, 2011.  FHA is going to increase the MIP expense by 25 basis points, or one quarter of a percentage point (0.25%).  What does that mean for FHA borrowers?  FHA loans, which already have a fairly hefty upfront fee PLUS charge MIP for five years, are going to be more expensive.

In plain English, how does that effect YOU as a potential FHA borrower?  For every $100,000 you borrow, you will pay an additional $22.50 per month, because of the MIP increase.  That's an additional $270/year.  Or an additional $1,350 over the life of the loan.  Now, some people may say, "no big deal."  But for first time buyers, who often judge what they can buy based on a monthly PAYMENT, that extra $22.50/month per $100,000 borrowed ain't chump change.  On a $200,000 loan, that $45/month could go to pay a utility bill.

This is just one of the changes to federal lending rules that will make it harder for moderate income buyers to borrow.  The seller closing cost contribution is expected to come down to 3% from 6%.  That means more cash out of pocket for buyers.  The underwriting standards will be tightening.  Credit score requirements will be increasing.

But it's not just moderate income borrowers who will be impacted.  Fannie and Freddie are going to require more money down for their loan products, possibly as much as 10%.  Conforming loan limits are going to come down, likely back to the traditional $417,000, meaning loans larger than $417,000 will be non-conforming and therefore more expensive.  Trust me, there is plenty of pain to go around if all of the recommended changes are implemented.

More on all of these changes in the next several weeks.  But the practical reality is if you are considering buying a home, and particularly if you are going to be an FHA buyer, consider buying NOW to avoid those April 18, 2011 changes.  Interest rates are great and there is more and more inventory coming on for the Spring market, so there are wonderful opportunities out there.  Otherwise, more marginal buyers may find themselves able to borrow much less, or shut out of the market altogether.

Thanks to Ingrid Sell for originally posting this document on Facebook.

Richmond, Do You LOVE The Byrd Theatre?

We really hope so!  This week, with Valentine's Day as our quiet kickoff, the lovely staff at the Byrd Theatre will be asking movie attendees if they would like to make a donation to the Byrd Theatre Foundation.  Any little bit helps - $1, $5, $50!

The Byrd Theatre Foundation is a non-profit organization dedicated to preserving and restoring this amazing Richmond landmark. The Foundation really needs your help to raise the necessary funds to renovate the theater.  Yes, we know the seats are uncomfortable!  But we also have to  upgrade all the un-fun, expensive stuff, like the HVAC system, the electrical system, and plumbing.  The Mighty Wurlitzer organ needs significant attention.  We must repair damage to the ornamental plaster.  We want to upgrade the concession area and replace the carpet.  And yes, Richmond, we WILL eventually replace the seats!

Richmond, the movie operations do NOT raise money to fund the Foundation's mission.  The movie operation is a break-even exercise.  The movies make enough money to pay the light bill, to pay all the hard-working and dedicated staff members, and to make necessary upgrades to the operational side of the business - like a digital server.  And raising ticket prices won't solve the problem.  A large percentage of the ticket income goes right back to the movie distributors.  Besides, we believe the Byrd Theatre experience should be available to everyone for a very modest price.  There aren't many places where you can take a family of four out on a Friday night for under $20.

[Movie tickets:  $8.  Two drinks:  $6.  Large Popcorn:  $3.50.  Seeing Bob Gulledge play the Might Wurlitzer organ live on a Saturday night at Richmond's Grand Movie Palace, and then catching "Mega Mind" with your significant other and the kids:  Priceless].

So...if you're going to see "Harry Potter" or "Burlesque" this week, please consider making a donation.  And if you're not attending the movies this week, we'd still love for you to show us how much you "Love the Byrd!"  Please feel free to contact the Foundation at thebtf@gmail.com or me directly at melissasavenko@gmail.com.  Thank you in advance for your support of this amazing Richmond landmark.

Irony, Thy Name Is RVA Creates

Well, here we go again.  Yet another branding campaign for Richmond has been rolled out.  This time, it's called RVA Creates and is "an open-source platform that invites public participation."

The delicious irony - or horrific, depending on your point of view - is that the RVA Creates initiative is NEITHER creative NOR open.

What do I mean by this, you may ask?   Well, according to the RVA Creates team, the process leading to RVA Creates began "about a year ago."  However, the overall brand strategy - telling stories about important past and current risk takers, creators and events in Richmond - looks quite like the "Richmond Matters!" branding strategy rolled out over 2+ years ago.  I know, because I was invited to an early meeting on the "Richmond Matters!" strategy in December 2008, and I've followed it ever since.  My group had creatives, activists, business people, representatives of the not-for-profit world, and bloggers.  You know, the actual grass roots types.  The creators of Richmond Matters!, Mark Brady and Shelli Jost Brady of Alchemy, asked us what we thought, they listened to our opinions, and then they used our feedback to mold the idea, which was a truly regional story.  In fact, the website URL for Richmond Matters! is www.therichmondregion.com.  Presentations on the Richmond Matters! idea were given to loads of people, including many people involved in the subsequent development of RVA Creates.  Richmond Matters! has a website.  There is a Facebook page, dating from 2009.  There are even T-shirts, for goodness sakes! 

The "open" claim is even harder to bear.  The team behind RVA Creates held small group sessions with specifically invited individuals.  I wrote about these meetings in October 2010.  According to sources who attended those small group meetings, they were overwhelmingly dominated by 40+ year old white men from the business community.  Needless to say, non-whites and women were woefully under- or even un- represented.  Shocker.  And this is my absolute FAVORITE part - RVA Creates has a private closed discussion group on Facebook, with only the invitees and team members included.  And now they call RVA Creates an "open source" campaign?  Wow.   

More on all of this later, work calls.  Also, I'm flabbergasted and frankly, pretty daggone angry.  So I should probably simmer down and step away from the keyboard.  But I'm glad other people out there have also noticed that the Emperor has no clothes, and are likewise willing to point that out, albeit in a more genteel and well-written way.  [Thank you, Harry Kollatz, Jr.!]

I'm still not sure how these folks, Venture Richmond and members of the private sector, have the authority to create a branding campaign for the City of Richmond, period.  Shouldn't something as important as our brand be left to the soon-to-be-created Director of Tourism's office?  Mayor Jones, did you and your administration ask these folks to take on this task?   If the answer is yes, just say so.

And don't get me started on Venture Richmond's incessant and myopic focus on "Downtown" while the rest of the City is just ignored.  I'm sure I am going to want to talk more about that too, once I cool down.  Hasta la vista, for the time being.

[NOTE:  All descriptions of the small-group meetings are based on information from attendees.  I was not present at any of these meetings.  Is anyone surprised?]

RVA Creates - A New Richmond Branding Campaign

Daggone, you miss reading the paper for a week and an entire branding campaign for the City - oh, oops, if the City equals Downtown, that is - gets rolled out and you miss it.  So now we have RVA Creates.  Wundebar.

Oh boy.  I have so much to say about this.  In fact I blogged about the campaign while it was under development.  I don't have the time right now to write anything substantive, work is calling.  And I have to post the third part of the consultants' report on the need for a replacement Downtown arena/stadium.  But look for a post soon about one woman's opinion about "RVA Creates."  And remember, that and $0.25 will NOT get you a cup of coffee.

Why All the Stealth, RVA Creates?

OK, I drafted this on December 3, 2010, and apparently forgot to post it.  Duh.  I figured that out when I was looking to link this blog post to a NEW blog post about the "official" RVA Creates roll-out this past Sunday, February 6, 2011.  So, I'm posting this today (pretend it's December 2010) and there are more posts to come on the final product and the process that culminated in "RVA Creates."

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So, the Venture Richmond folks are at it again.  They're the drivers behind yet another branding campaign for Richmond, under the name "RVA Creates."  It's a closed, invitation-only group of members of the Richmond "creative community" discussing a strategy and a brand for Downtown Richmond.  Here's an interesting exchange from the RVA Creates Facebook page. 

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INTERESTED PARTY:    I was hoping that your Info section would have more details about who is behind this effort and why it's being done. Venture Richmond registered the URL rvacreates.com, but they are not mentioned on your Info page here. Who is driving this project, and what is its purpose? Is this a Venture/Chamber endeavor to market the city of Richmond somehow? Hurray for creativity and all, but the only people I hear talking about this are the agency (Elevation) folks behind the campaign. It lacks authenticity in the extreme.

You're encouraging people to submit examples of their creative work, without any transparency into how that work is going to be used, or what rights, if any, creators would retain over work/images/video/stories submitted. Why should we hand over material, for free, to an ad agency, who's going to use it for who knows what purpose? Smells like crowdsourcing to me.

More transparency, please. Who are you, and what exactly are you hoping to accomplish here?

RVA CREATES:  Thanks for your comments, [NAME]. There are actually a lot of people involved with RVA Creates—more than 100 stakeholders have been involved so far—and we’d like you to be involved as well. While we aren’t quite ready to talk about the full details of the project, we can say that it is all about showcasing the culture of creativity and innovation that exists in RVA. We hope that will become clearer as more elements of the project come into place. Your point about intellectual property rights is well taken; we’ll update the information section to make it clear that we aren’t seeking ownership of anyone’s creative work.

Your company is one of those innovators, so we hope you’ll send us some of your stories, like creating DMB’s app. We also bet you know a lot of other people who are doing amazing things right here in RVA and hope you will spread the word. Thanks for your feedback it is very helpful.

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My personal favorite line?  "While we aren’t quite ready to talk about the full details of the project, we can say that it is all about showcasing the culture of creativity and innovation that exists in RVA."  

Huh?  I suspect the secrecy and lack of transparancy is because RVA Creates is intended to look like a grassroots campaign, when it's really just another top down initiative from the business community, run through their proxies, Venture Richmond and/or the Greater Richmond Chamber.

Consultants Suggest a New Stadium - I Mean "Arena" - for Downtown Richmond - Volume II

Here is the second volume in the $150,000 consultant's report on what to do about the Richmond Coliseum.

And ooops!  Apparently it is an ARENA, not a STADIUM.  Whatever it is, we can't afford it.

And two posts in three days!  I am hurting my arm with the back-patting right now.