FHA Loan Limits Increase
Effective immediately, FHA loan limits are back to $346,250. They had been dropped to $271,050 in October. The max loan amount will stay at $346,250 until December 31, 2012. This change will apply to all FHA case #'s issued after November 18, 2011. An FHA case # is established by the lender at the start of an FHA loan. Conventional loan limits will remain at $417k
Refinancing Will Become Much, Much Easier
The federal government announced big changes in the Refinance rules for borrowers with loans currently back by Fannie Mae and Freddie Mac. Current Refinance rules give higher rates/fees to borrowers that owe more than their home is worth and completely disqualify borrowers that are more than 25% upside down (a huge problem for Arizona homeowners).
The newly announced refi program claims that both of those issues will be eliminated when they roll out the full details of this program in mid November. The announcement claims that an appraisal will not be required in most cases. Borrowers must not have any late mortgage payments in the past 6 months and cannot have more than 1 late mortgage payment in the past 12 months. The most important requirement of this program is that it only applies to loans that are currently backed by Fannie Mae or Freddie Mac and only applies to loans that were closed prior to May 2009. Here are the websites to check to see if your loan is backed by Fannie Mae or Freddie Mac http://www.fanniemae.com/loanlookup/ and https://ww3.freddiemac.com/corporate/
Rules for Financing Condos
Lending rules have become stricter in the past few years when financing condos with FHA, VA and even Conventional loans. You can go on the FHA website to search for FHA approved condos in a particular zipcode.
https://entp.hud.gov/idapp/html/condlook.cfm
Even if the complex is FHA approved on the websits, lenders still need to verify that less than 50% of owners are investors and the tougher requirement is that no more than 15% of the HOA dues can be more than 30 days delinquent. The investor % and HOA delinquency % requirements apply to FHA, VA, and Conventional loans and can keep even highly qualified buyers from obtaining a loan on a condo
Self Employment Requirement Drops to 1 Year
Conventional loan rules with 20% down have gotten easier for borrowers with non-salary types of income. In the past, borrowers with self employment, tip, bonus, commission, overtime, part time or 2 job income were required to show a 2 year history to be able to use this type of income to qualify. Now, strong borrowers with 20% down can use these income types after only 1 year of history. FHA, VA and Conventional loans with less than 20% down still requires a 2 years history.
Justin M. Baker, CDPE / CSSN / ABR