New Conforming Loan Limit Guidelines

Fannie Mae announced yesterday the details of the new conventional loan limits. While these changes were made to buoy the sagging home finance market, please note the measures are conservative.

In a nutshell, here are some of the highlights:
1. The new loan limit for San Diego County will be $697,500
2. Eligible products are 30 and 15 year fixed rate mortgages and 5/1 adjustable rate mortgages – both fully amortizing and interest only.
3. Borrowers with existing first and second mortgages can NOT consolidate the two loans.
4. Borrowers must wait six months from their purchase or last refinance before closing loans on this program.
5. No cash out refinances loans will be permitted.
6. Second home and investment properties must have 40% down or 40% equity for a purchase or refinance.
7. Purchase loan transactions require a minimum of 10% down for fixed rate mortgages (and a credit score of 700 or better) and 20% down for adjustable rate mortgages. (A 660 credit score or better is required on the adjustables or a fixed rate at 80% loan to value.)
8. All loans must be manually underwritten. (No streamlined automated approvals).
9. All loans must be full documentation. (No stated income)
10. An added fee or one quarter point (.250 times the loan amount) will be added on all fixed rate mortgages.
11. An added fee of three quarters of a point wil be assessed on all adjustable rate loans.
12. The maximum debt-to-income ratio for all products is 45%.
14. Properties must be one unit only.
15. Pricing for fixed rate mortgages will be available April first, while adjustable rate pricing will be released on May first.
16. This temporary measure will only be available this calendar year, unless an extension is granted.

ALL OF THESE QUOTES ARE WITH 0 POINTS AND NO PREPAYMENT PENALTY
The FHA maximum limits were updated yesterday to the following. The mortgage company systems are not yet up to date but hopefully soon so I can obtain pricing. This should help people who were buying homes with less than 20% down up to these loan amounts and people who need to refinance and now owe more than 80% due to decreased values.

San Diego/San Diego
1 Unit-$697,500
2 Units-$892,950
3 Units-$1,079,350
4 Units-$1,341,350

Riverside/San Bernardino
1 Unit-$500,000
2 Units-$640,000
3 Units-$773,700
4 Units-$961,550

Los Angeles/Orange
1 Unit-$729,750
2 Units-$934,200
3 Units-$1,129,250
4 Units-$1,403,400

Advantages of FHA LOANS
Interest rates are lower, underwriting is easier and with fewer appraisal problems.
A FHA loan may be the best option for buyers and for escrow
1. 97% financing up to $697,500 (3% down payment)
2. Down payment can be a gift
3. Seller can pay all closing cost
4. Credit scores down to 580 (lower with exceptions)
No outside appraisal review due to declining market conditions
5. Jumbo loans at lower rates than conforming loans

Non occupant co-borrowers with blended ratios
Cash out refinance to 95%
1-4 units, Condos/PUDs and Manufactured Homes
FHA, VA, CAlHFA and Conventional loans

About Denay Trinidad

Real Estate is my passion and I hope to have the opportunity to help you sell or purchase Real Estate. You will benefit from my exceptional knowledge of the local market and my focus on finding buyers the perfect property or netting sellers the right price and in the right amount of time. As a Certified Previews International Specialist, I am very qualified to sell properties that fall under the Luxury market. Much of my business is from friends or referrals. I am loyal to my clients throughout the entire process, and remain loyal long after escrow has closed. I would love the opportunity to meet with you and help you find your dream home, investment or Sell your home with all of the creativity, determination and experience I have. Thank you!
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