 The federal government has recently revised the guidelines for jumbo-conforming loans as a result of the mortgage crisis. Temporary increases to Fannie Mae's conventional loan limits for first mortgage loans in high-priced areas, as defined by the Department of Housing and Urban Development, 30-year and 15-year jumbo-conforming loans will be eligible for Mortgage-Backed Securities. The requirements are tight and they may leave some borrowers out of luck.
Fannie Mae's new guidelines are as follows: - Only 30-year fixed, 15-year fixed, 5-year Adjustable Rate Mortgages, and 5 year interest only ARMs.
- First lien mortgages only, no cash out refinances.
- If you are trying to refinance, you cannot get a first-lien mortgage of more than 75% of the home's appraised value.
- Maximum loan-to-value ratio:
- If you are trying to get a loan for your principal home, you cannot borrow more than 90% of the home's value on a fixed-rate loan.
- You cannot borrow more than 80% of the home's value on an adjustable-rate loan.
- You cannot borrow more than 60% on an investment property or second homes.
- Private mortgage insurance must be bought for all loans with loan-to-value ratio less then 80%.
- Maximum debt-to-income ratio of 45%.
- You must have a credit score of 660 or higher.
- If borrowing more than 80% of the home's price, the minimum credit score is 700.
- One unit properties only. No duplexes, only single-family homes and condos.
- No late payments within the last 12 months.
- FULL documentation of everything is required.
There is no guarantee that the rates on jumbo loans will be low enough to attract borrowers. Jumbo-conforming rates have skyrocketed over the last few months and rates on 30-year fixed jumbo mortgages averaged 7.43% last week. However, with loan limits temporarily raised and with the new guidelines in place, jumbo mortgage rates may decline in the next few months. (Written by: K. Skowronski) Article Sources Fannie Mae's New "Jumbo-Confirming" Loan Guidelines, http://www.socketsite.com/archives/2008/03/fannie_maes_new_confirming_loan_limit_guidelines_in_sum.html 'Jumbo-conforming' rules could trip up homeowners, http://www.bankrate.com/brm/news/mortgages/place11.asp
Related Articles Lower interest rates are helping few and far between Chief Economist leaves MBA for Fannie Mae Owner Financing - Get it Sold Already! |
