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VA Zero-Down Loan Limits Reduced For 2010 In San Diego County
Posted by Kevin Kueneke | Leave A Comment »
The Department of Veteran’s Affairs (VA) announced that the maximum zero-down VA loan limit for 2010 is being reduced from $593,750 to $437,500 for San Diego County. Remember that VA loan amounts exceeding $417,000 are considered VA Jumbo loans.
Other areas, such as Los Angeles and Orange Counties, will have maximum zero-down loan limits as high as $593,750 whereas much of the San Francisco Bay Area can go up to $962,500.
A veteran can purchase a home in Pitkin County Colorado up to $1,094,625 with zero down payment. Click here for a complete list of areas with limits greater than $417,000.
Qualifying veterans can still purchase higher priced homes in San Diego County with significantly lower down payments than with Conventional financing.
Assuming the veteran has full entitlement, he/she may purchase a $450,000 home with as little as $3,125 down which is less than 0.7%. A $550,000 home can be purchased with as little as $15,625 down which is only 3.125%. Click here for examples for additional prices.
Please remember that the entire down payment can be a gift.
Whether you are a VA, FHA, or Conventional buyer, please email me: Kevin@MyCWMtg.com with any questions.
Related Posts: Buyers, CW Mortgage, Home Loans, Mortgage News
FHA Purchase: After 90 Days But Before 180 Days
Posted by Kevin Kueneke | Leave A Comment »
We have discussed FHA’s 90-day “anti-flip” policy a lot these days. Basically, a buyer will be unable to obtain FHA insured financing if the subject property has been owned by the seller for less than 90 days, with some exceptions.
But did you know that FHA is still concerned from day 91 to day 180? If the new purchase price is 100% or more than the price paid by the seller and the seller purchased the property within the past 91 to 180 days, the lender will be required to obtain a second appraisal by another appraiser.
Even though this rule has been in effect since June of 2006, it has only recently been an issue due to all of the properties purchased on the court house steps.
Even if the seller can provide documentation showing the costs and extent of rehabilitation that went into the property resulting in the increased value, a second appraisal will still be required. Also, the cost of the second appraisal may not be charged to the home buyer.
Bottom line: check the transaction/price history. A second appraisal could add additional time to your escrow, unless you plan accordingly.
Should you have questions regarding this article or any other mortgage related topic, please call me at (760) 500-1919 or email me: Kevin@MyCWMtg.com
Related Posts: Buyers, CW Mortgage, Home Loans, Homeowners, Mortgage News
How Does The Latest Version Of Fannie Mae’s DU Affect You?
Posted by Kevin Kueneke | Currently 1 Comment »
For Conventional conforming loans, lenders use one of two automated underwriting engines. Fannie Mae has Desktop Underwriter, otherwise known as DU. Freddie Mac has Loan Prospector, otherwise known as LP.
Prior to being reviewed by an actual underwriter, a loan must be run through one of these automated underwriting engines. The programs evaluate the information provided (income, assets, credit report, layers of risk, etc.) and determine whether or not the loan meets current Fannie/Freddie guidelines. If a loan does not pass this initial step, it cannot move forward.
Up to this point, Fannie Mae has not really had a set maximum debt-to-income ratio. A buyer could be approved with as much as 59% of their gross monthly income going towards their expenses (housing, cars, student loans, credit cards). A few years ago, that number could go up to 65%.
However, the latest version of Fannie’s engine, DU 8.0, will now have a soft debt ratio ceiling of 45% and a hard ceiling of 50%. Greater than 45% will be allowed if and only if there are compensating factors to rationalize the higher debt ratio.
What are compensating factors?
- Very high credit scores (greater than 760)
- Very large down payment (30-50% down payment for example)
- Large amounts of reserves (12+ months housing payments in the bank after the close of escrow)
- Long time on job (10+ years)
A survey of some of the larger lenders shows that more than 22% of all conventional loans in process right now have a debt ratio greater than 45%. More than 12% of all conventional loans in process have a debt ratio greater than 50%.
So, now what? If you are involved in a transaction right now, check with the lender to see if the loan will be affected by the tighter guidelines. Most lenders have a “pipeline protection” policy that will grandfather many loans, but not all.
Sometimes, an underwriter will re-calculate income differently than initially calculated and will then require that a loan be re-run through DU. If a loan is DU approved this week, but not actually reviewed by an underwriter until next week, that loan may not work under the new guidelines.
Please keep in mind that Freddie Mac has not tightened their LP program yet, so a loan that no longer fits under Fannie rules might still work under Freddie. However, not all lenders offer Freddie Mac products. Another reason to check with your lender.
By the way, for High Balance Conforming loans (a.k.a. Agency Jumbo, Conforming Jumbo, Jumbo Conforming), the maximum debt-to-income ratio is and always has been been 45%.
Any questions? Please feel free to call me at (760) 500-1919 or email me: Kevin@MyCWMtg.com
Related Posts: Buyers, CW Mortgage, Home Loans, Mortgage News, San Diego
High Balance Conforming Loan Limits for 2010…Same As 2009!
Posted by Kevin Kueneke | Leave A Comment »
Great news for San Diego real estate buyers! Fannie Mae (FNMA) announced that they are keeping 2009’s High Balance Conforming loan limits for 2010. Freddie Mac (FHLMC) made a similar announcement.
As we all know, the regular conforming loan limit in San Diego County is $417,000. Loan amounts up to this number have the lowest rates. Loan amounts from $417,001 to $697,500 in San Diego are considered high balance conforming loans (up to $729,750 in Los Angeles and Orange Counties). Other frequently used terms for these loans are Agency Jumbo and Conforming Jumbo. 
Since these loans can be purchased by FNMA and FHLMC, investors are willing to offer reasonably low rates for these amounts – typically 0.25% to 0.375% higher than regular conforming. This is far better than the true “jumbo” rates you see advertised for larger loans.
The Federal Housing Administration (FHA) also announced that they will continue to insure higher loan amounts under the FHA Jumbo program (up to a base loan amount of $697,500 in San Diego County).
These announcements will continue to benefit the “move up” buyer as money remains affordable even in the higher range.
Any questions? Please feel free to email me today: Kevin@MyCWMtg.com
Related Posts: CW Mortgage, Financial news, Home Loans, Mortgage News, San Diego
High Balance Conforming Loans…Minimum Down Payment Requirements
Posted by Kevin Kueneke | Leave A Comment »
Conventional loan amounts up to and including $417,000 are considered Conforming loans, or Agency loans, and are typically backed by Fannie Mae and Freddie Mac.
In San Diego County, conventional loan amounts greater than $417,000 and less than or equal to $697,500 are considered High Balance Conforming loans (also known as Conforming Plus, Conforming Jumbo, and Agency Jumbo).
Some areas, like Los Angeles and Orange County, have high balance conforming limits as high as $729,750.
These loans are still backed by Fannie Mae/Freddie Mac. However, the High Balance guidelines differ slightly from the true conforming guidelines. One of the most important differences is the minimum down payment requirement.
The following is a quick breakdown of the minimum down payment requirements for High Balance Conforming loans:
Owner Occupied Purchase
- SFR and Detached PUD’s, the minimum down payment is 10%
- Condo and Attached PUD’s, the minimum down payment is 20%
- 2-4 units, minimum down payment is 25%
Second Home Purchase
- The minimum down payment for all property types is 35% for a 2nd home purchase
- 2-4 units are not allowed
Investment Property Purchase
- The minimum down payment for all property types is 35% for an investment property purchase
- SFR, Attached and Detached PUD’s, Condo’s, and 2-4 units allowed
There are also additional credit score requirements: 740 minimum for 2nd home and investment properties, 660 for owner occupied up to 75% loan to value, and 740 minimum score up to 90% loan to value.
Even with the more strict down payment requirements, the High Balance Conforming loan program is still beneficial to San Diego real estate. Please feel free to email me with any questions: Kevin@MyCWMtg.com
Related Posts: Buyers, CW Mortgage, Home Loans, Mortgage News, San Diego
