The National Flood Insurance Program is working on allowing policyholders to pay their premiums on a monthly basis. Previously, premiums could only be paid annually.

The Federal Emergency Management Agency, which operates the program, is in the process of allowing both new and existing customers to pay monthly. The change won’t impact policy terms, just the payment schedule.

Policyholders who escrow their flood payments along with their property taxes and homeowners insurance are not eligible. But everyone else, at the time of application or renewal, will soon have the option of paying annually or monthly.

There will be no extra fees to pay monthly, but once you have selected a payment plan, you cannot change it during the policy’s term. However, federal law requires FEMA to charge certain fees, surcharges and assessments, and those charges will be collected upfront at the start of the policy’s term. For monthly payers, they will be collected with the first payment. Then, it will be the premium only for the next 11 months.

FEMA says it is working with all NFIP insurers to offer the monthly option as soon as possible.

Folks wondering what their homes might be worth if they made certain improvements will find a new tool from Revive helpful. Its artificial intelligence tool, called After Renovation Value, is now open and free for anyone to use.

Revive already works with real estate professionals to provide the guidance, contractors and funding that sellers need to make strategic presale renovations. Now, the ARV tool can estimate current value and reveal a property's untapped potential -- ensuring that sellers don’t leave money on the table by failing to bring their properties up to snuff. The tool also includes a neighborhood property condition analysis.

The program has gone through months of rigorous testing to ensure accuracy and reliability, the company reports. More info can be found at www.revive.realestate.

Speaking of renovations, you might want to think twice about remodeling if you plan to stick around awhile. According to a new study from Clever Real Estate, just under half the owners queried who had undertaken a project within the last five years liked their places better before the work was done.

Clever, which matches real estate agents with local buyers and sellers, actually found a bunch of negatives around remodeling:

-- Three in four owners went over budget on their last project, with nearly half exceeding it by at least $5,000 and a third going at least $10,000 over.

-- Of the about 3 in 4 homeowners who regretted remodeling in the past five years, 1 in 4 regret spending too much and 2 in 5 gripe that the renovation took too long.

Food for thought.

If you do undertake major improvements, don’t forget to tell your insurance company so your coverage can be adjusted accordingly. Many people don’t, according to a new survey by Nationwide.

Homeowners may not realize that taking on big projects could impact their insurance, says Casey Kempton, president of the insurer’s personal lines division: “We always recommend consulting with an insurance agent before diving into any major DIY renovation to ensure that all potential risks are covered.”

The poll found that 55% of owners who completed large-scale renovations within the past two years “have not adjusted their insurance policies, leaving themselves at risk of being underinsured.”

Homeowners should not wait to update their coverage until the project is completed. Do it before the work starts, so everyone will be covered.

I hate it when researchers come out with reports on the "best day to buy a house" or list one for sale. I am not going to name names, because these companies normally produce solid research, but studies about the "best day" are bogus -- pure and simple.

One recent study says the best day to buy is Dec. 5 -- but anyone who settles on that date would have signed their purchase contracts 30 to 60 days earlier. No one, not even the best researchers, can say with any accuracy what the best day to buy is, because sales only become part of the record when they go to settlement.

Building lots are in short supply in many major markets, but more sites are on the way. According to home marketing and research firm Zonda, lots under development are up more than 21% from the end of 2023.

Unfortunately, most new buildable sites are in the excavation stage -- the beginning stage of development -- and won’t be delivered until early spring at the earliest.

"Vive la difference" is a French phrase that encourages us to celebrate differences, usually among people. But real estate has its differences, too -- like the difference between spec houses and custom-built homes, or between a pending sale and a completed one.

Let’s examine a few of these distinctions, which homebuyers should be familiar with.

-- New houses. Builders who put up entire subdivisions are building “production” houses: homes that are built for the masses. Usually, they don’t start construction until they have a signed contract, but sometimes they move ahead with a house that has yet to be sold. In those cases, they are speculating that a buyer will come along soon -- hence the term “spec” houses.

“Custom” houses, on the other hand, are usually one-of-a-kind, architect-designed homes built for one buyer and one buyer only. With a production house, builders have made most of the design choices for you; all you have to do is pick the finishes. With a custom house, you choose everything. It may sound fun, but it’s a chore most people say they would never do again.

Also, some production builders allow their buyers to make more substantial design changes to their models, which then are called “semi-custom” houses.

-- Style. You can put any type of facade on a house -- colonial, modern, traditional and so on -- but there are only four basic plans: two-story, one-story, split-level and bi-level. And while single-floor houses can be called ramblers or ranches, the terms mean the same thing.

-- Agents. There are more than 1 million real estate agents and brokers plying their trade throughout the country, but not all of them are Realtors. To be called the latter, you have to be a member of the National Association of Realtors. In and of itself, though, being a Realtor does not make an agent any better or worse.

Loan officers and mortgage brokers aren’t the same, either. Loan officers work for banks or lenders and only write loans offered by their institutions. Brokers, on the other hand, are independent agents who originate mortgages for any number of lenders. They tend to offer a broader array of products.

-- Sold. A house is sold only when all the documents are signed at closing and money changes hands. Many agents post "Sold" signs on properties as soon as the seller gives their blessing, but the place ain’t sold until settlement. Until then, the seller can entertain more offers and even hold some as back-up contracts in case the original deal falls through.

A "Pending" sign offers another meaning: It tells other would-be buyers the seller has accepted an offer, all contingencies in the contract have been satisfied or removed, and the deal is heading toward closing.

-- Preapproved. In the financing world, there’s a big difference between being preapproved and prequalified. Generally speaking, with preapproval, a real estate agent or lending professional takes a look at your credit, debt, income and assets, then estimates how much you may be able to borrow. That information, and the amount you have put away for a down payment and closing costs, indicates roughly how much you can spend on a house.

But a preapproval is virtually worthless -- so much so that it’s called a "Swiss cheese loan commitment" because it's riddled with holes that lenders can use to deny your application. These days, agents and sellers won’t even talk to you unless you are prequalified for financing.

"Prequalified" means that you have been actually cleared for a mortgage at a certain amount. As long as the valuation of the house supports the price you're paying and does not exceed your maximum, you are good to go.

-- Examinations. A home inspection is different from a final walk-through. With an inspection, the buyer hires a professional to go over the house, top to bottom, looking for any defects, flaws or faulty systems and appliances. Armed with the inspector’s report, the buyer can make a decision on whether to proceed.

The final walk-through, by contrast, is when the buyer visits the house a few days prior to closing to make sure all the requested repairs have been completed to their satisfaction. This final look-see is also a chance to make sure the house is clean and possibly discover problems the inspector missed.

-- Remodel. There’s "remodel," which is changing something in the house for the better -- say, an all-new kitchen or bathroom. Then there’s "renovate," which is almost an entire makeover. And there’s also "restoration," which is returning a house to its original state.

Unless your property is historic, a restoration usually only occurs after a fire or other disaster. In those cases, the insurance company will pay to have the house restored to the way it was before the covered event. It will not pay for any upgrades or improvements; if you want to make the house better while you're at it, that's on your own nickel.

If the house has some historical significance, a restoration would hearken back to its original design, often using authentic materials and components from the time when the house was constructed.

When lawmakers come back to Washington early next year to tackle the country's housing crisis, they will argue over various proposals to fix affordability, high mortgage rates and the lack of inventory. They will debate ideas such as gifting $25,000 to first-time homebuyers, cutting regulation costs and releasing millions of acres of federal land.

But Mark Milam, a mortgage banker and loan originator in Atlanta, says those proposals are like “swallowing an aspirin next year for a headache you have now.”

Demand is not the problem, nor is it a lack of home builders, he wrote in a LinkedIn essay this summer. (An updated version of the piece was also posted on HousingWire this fall.)

“As an owner of a mortgage company and a 20-year housing veteran,” he wrote, “I can tell you there’s no shortage of people who want to buy, just as there is no shortage of builders who want to build.”

Milam has a three-point plan to address the housing crisis. It won’t cost the government one red cent; in fact, it may increase Uncle Sam’s revenue and perhaps even help cut the deficit. The trouble is, it isn’t particularly sexy, it can’t be reduced to sound bites and it isn’t easy to explain.

Like a voice in the wilderness, Milam doesn’t know how to get his plan before the powers that be in Washington. He tickled my interest when we ran into each other at an industry conference in Denver. His plan sounded plausible, so I told him I’d give it some ink.

The first plank of his plan involves the lack of inventory. While the number of houses for sale has been ticking up recently, there still aren’t enough to go around, and definitely not enough to outpace demand and reduce prices.

To boost inventory, Milam would temporarily halve the capital gains tax on the sale of investment properties. This one step, he believes, would untether millions of houses held by small-time investors.

According to BankRate, investors own more than 20 million single-family properties in the U.S. “That’s a lot of front doors,” Milam wrote, and most of them are owned not by Wall Street hedge-fund types, but by smaller “mom-and-pop” operations. These individual investors have owned their rentals for years, but are now getting a little long in the tooth. Many would presumably like to cash in and enjoy their later years free of any landlord obligations.

So, Milam asks, what if the capital gains tax on the sale of investment properties was cut in half -- even just for six months? During that window, if you would normally pay 20% based on your tax bracket, you’d pay just 10%, for example.

Milam calls this "a huge win-win-win" for the country, investors and homebuyers. The country would receive tax revenue it wouldn’t otherwise, investors would save big money upon selling highly appreciated assets, and homebuyers would have more properties to choose from, likely bringing prices down across the board.

Next, Milam would address lender profits. Currently, lenders lose money on the mortgages they write until the loans are on the books for roughly six months. But today’s buyers are impatient, jumping at the chance to refinance as soon as rates tumble even a tad. Consequently, lenders price their loans higher to compensate for the possible loss in revenue.

Milam says he’s sent packing more than one client who was planning to refinance as soon as possible because he would have ended up losing money on the deal.

“Guess what?” he wrote. “Lenders aren’t in business to lose.”

To prevent that, Milam would add a prepayment penalty -- he calls it a “premium recapture” -- that would fine a borrower for paying off their loan within, say, 12 months after closing. With that in place, he believes lenders would price their products lower, thereby increasing affordability for everyone.

Finally, Milam would attack loan-level price adjustments. Fannie Mae and Freddie Mac, under the oversight of the Federal Housing Finance Agency, require lenders to include these fees in their loans to account for risk. There’s a whole slew of variables involved -- the down payment amount, the length of the loan, the borrower's credit history, etc.

“In the 20 years I’ve been lending,” wrote Milam, these price adjustments have “expanded, worsened, expanded more and worsened more. They are cash cows for Fannie Mae and Freddie Mac.”

Here’s an example: Under the current regulations, a borrower with a credit score of 740 and a 20% down payment -- not a risky bet, as borrowers go -- is hit with a 0.875% price adjustment. If that charge were removed, the borrower's overall mortgage rate would drop by 0.875%, cutting the monthly payment on a $400,000 loan by more than $200 a month.

"Instant help with affordability," says Milam. Investors won’t make as much money per loan, but they’ll make it up on volume because more people will be able to afford financing.

Milam conceded his proposals may be drastic, but he contends that they would “have an immediate, positive impact on affordability.”