Tuesday, December 29, 2009

Borrower Documentation for non-U.S. citizens

Residential Lending in U.S. to citizens of other countries:
For conventional financing, there are documentation requirements for your legal status. If you have a Social Security Number and a Green Card, you have satisfied that requirement (Permanent Resident). For non-permanent residents, you still need an SSN, and either a VISA evidencing legal entry to United States for temporary residence, or a passport and an Employment Authorization Document.
You must have documentation of legal entry into the U.S.
Special rules apply if your income is passive only (not self-employment or salaried).
The documentation guidelines above are universal. Different lenders will add more restrictions than are shown here.

FHA Mortgage Insurance Premiums

Up Front Mortgage Insurance Premium (UFMIP):
Purchase Money Mortgages and Full Qualifying Refinances are 1.75%.
Monthly Premium:
For loans over 15 years, the monthly premium is .50 for LTV's of 95% or less, and .55 for LTV's greater than 95%. For 15 year or less loans with 90% LTV or less, there is no monthly premium, over 90% LTV carries a .25 monthly premium.
Cancellation of Monthly Premium:
For mortgages with terms greater than 15 years, the annual MIP will be cancelled when the LTV reaches 78% based on the original value of the loan, provided the borrower has paid the annual MIP for at least five years.
For mortgages with terms of 15 years of less, the annual MIP will be cancelled when the LTV reaches 78%.

Monday, December 28, 2009

High Cost Area Loan Limits 2010

Conventional
High cost area loan limits for individual counties can range anywhere between $417,000 and $729,750, and are based on the area median home price as established by HUD. There are no changes to the Conventional loan limits for 2010, including those for counties considered high-cost areas.
A complete schedule of Conventional loan limits by county may be found on the HUD website at
https://entp.hud.gov/idapp/html/hicostlook.cfm.
FHA
FHA minimum (floor) loan limits are set at 65% of the national conforming loan limit and will remain at $271,050 for 1-unit properties in 2010. The maximum (ceiling) loan limit for high-cost areas is equal to the conforming limit and remains at $729,750 for 1-unit properties in 2010.FHA loan limits for individual counties can range anywhere between $271,050 and $729,750 and are based on the area median home price as established by HUD. The limits for most counties are unchanged for 2010 however, as a result of an increase in median home prices in certain areas; approximately 24 counties will have higher FHA county loan limits for 2010 vs. 2009. A complete schedule of FHA loan limits by county may be found on the HUD website at
https://entp.hud.gov/idapp/html/hicostlook.cfm.

(See previous post for California limits by County.)

Maximum California Loan Limits 2010

County Maximum
ALAMEDA $729,750
ALPINE $547,500
AMADOR $443,750
BUTTE $400,000
CALAVERAS $462,500
COLUSA $397,500
CONTRA COSTA $729,750
DEL NORTE $311,250
EL DORADO $580,000
FRESNO $381,250
GLENN $287,500
HUMBOLDT $393,750
IMPERIAL $325,000
INYO $437,500
KERN $368,750
KINGS $325,000
LAKE $401,250
LASSEN $285,000
LOS ANGELES $729,750
MADERA $425,000
MARIN $729,750
MARIPOSA $412,500
MENDOCINO $512,500
MERCED $472,500
MODOC $271,050
MONO $529,000
MONTEREY $729,750
NAPA $729,750
NEVADA $562,500
ORANGE $729,750
PLACER $580,000
PLUMAS $410,000
RIVERSIDE $500,000
SACRAMENTO $580,000
SAN BENITO $729,750
SAN BERNARDINO $500,000
SAN DIEGO $697,500
SAN FRANCISCO $729,750
SAN JOAQUIN $488,750
SAN LUIS OBISPO $687,500
SAN MATEO $729,750
SANTA BARBARA $729,750
SANTA CLARA $729,750
SANTA CRUZ $729,750
SHASTA $423,750
SIERRA $285,000
SISKIYOU $293,750
SOLANO $557,500
SONOMA $662,500
STANISLAUS $423,750

Friday, December 11, 2009

New FNMA DU Guidelines are effective Dec.12, 2009

Here is a summary of the most important changes:

TOTAL EXPENSE RATIO: Maximum (DTI) is 45%, (up to 50% with strong compensating factors).

MINIMUM CREDIT SCORE REQUIREMENT: 620

FORECLOSURES: For completion dates of more than 5 years, but within 7 years from the credit report date:

Purchase of principal residence permitted with minimum down payment 10% and minimum credit score of 680.No second home or investment property. Cash Out refinances will not be permitted for any occupancy type.

DEED IN LIEU OF FORECLOSURE: Completed more than 4 years, but within 7 years from the credit report date.

Principal residence, purchase transactions permitted with an LTV or CLTV maximum: 90%.

BANKRUPTCIES: Chapter 7 discharged is 4 years. Chapter 13 discharged is 2 years, filed but neither discharged nor dismissed is 4 years.

Less than these time frames will now receive a "Refer with Caution/IV recommendation".


EXPANDED APPROVAL (EA) ENHANCEMENTS

DU Version 8.0 will no longer issue EA-II and EA-III recommendations,except on DU Refi Plus.

High Balance mortgage loans will be ineligible with any EA recommendation.

REVISED MORTGAGE INSURANCE (MI) COVERAGE LEVEL REQUIREMENTS

Loans with a loan to value (LTV) ratio greater than 80% will now be subject to new simplified MI coverage requirements.

Reduced MI and Lower Cost MI will no longer be offered.

Financed MI is not available.


Fannie Mae will be updating Desktop Underwriter (DU) to version 8.0 the weekend of December 12, 2009. Detailed changes will be effective with all new submissions submitted to DU on or after December 14, 2009.

Thursday, August 6, 2009

HomePath Mortgage Financing Basics for the Investor

These are the basics of HomePath Mortgage that every real estate investor should become familiar with:
  • No appraisal required
  • Can finance up to 85% for Standard loans, 65% of the purchase price for High Balance Loans.
  • No MI is required. This increases the buyer's purchasing power.
  • Up to 2% seller contributions.
  • 1-4 unit, condos, PUD's and modular homes.
  • FNMA REO properties only.
  • Min FICO score of 660 for LTV greater than 80% to $417,000.
  • Min FICO of 580 for LTV less than 80% to $417,000.
  • Permanent Resident Aliens with Alien Registration Card OK, Non Permanent Resident Aliens with legal residence per SSN and US employment OK.
  • LTV to 85%: Fixed Rate programs from 15 to 30 year terms are available in 5 year increments, and 5/1 and 7/1 LIBOR programs to $417,000 for FICOS of 660 and above (FICO’s between 660 and 580 go to 80%) for 1 Units. 3-4 Units require FICO of 580 to 75%.
  • High Balance Loans: LTV to 65% require 740 FICO: for 1-4 units. Fixed Rate programs from 15 to 30 year terms are available in 5 year increments, and 5/1 LIBOR programs.
  • Reserves:6 Months PITIA, and 2 months PITIA on each additionally financed investment property.
  • LIBOR: Assumptions are permitted after first annual adjustment to creditworthy borrowers.
  • Second homes:$417,000 to 90% with 660 FICO, Fixed and 5/1 and 7/1 LIBOR. (80% requires 580 FICO). High Balance to 65% with 740 FICO, Fixed and 5/1 LIBOR.

Wednesday, August 5, 2009

HomePath Mortgage Financing Basics for First Time Home Buyer

Here are the basics of HomePath Mortgage that every first time home buyer should become familiar with:

  • No appraisal required.
  • Can finance up to 97% of the purchase price. (Over 95% is "Homepath Flexible".)
  • No MI is required. This increases the buyer's purchasing power.
  • Gift or grants OK for down payment.
  • Loans from relative employer, gov't or non-profit agency OK for "Homepath Flexible".
  • It is only for FNMA REO properties.
  • Minimum $500 from borrower's own funds.
  • Up to 6% seller contributions for owner occupied and second homes from 75% to 97% LTV
  • Up to 9% Seller contributions for LTV under 75% .
  • 1-4 unit, condos, PUD's and modular homes.
  • Min FICO score of 660 for LTV greater than 80%
  • Min FICO of 580 for LTV less than 80%
  • Permanent Resident Aliens with Alien Registration Card OK (*with 5% down)(*must live and be employed in US for FLEX) , Non Permanent Resident Aliens with SSN and US employment OK.
  • Over 95%, Fixed Rate programs from 15 to 30 year terms are available in 5 year increments to $417,000.
  • Under 95%, 5% Down payment required from borrower's own funds to 80% LTV. (Borrower's own funds for Down Payment requirement waived below 80%.) Over 80% requires 660 FICO, under 80% requires 580 for 1-2 Units. 3-4 Units requires 580 FICO to 75% LTV.
  • Under 95%, Fixed Rate programs 8 to 30 year term in annual increments available, with , and 5/1 and 7/1 Libor to $417,000.
  • High Loan Balance Loans are available to 90% with 700 FICO or to 75% with 660 FICO Fixed Rate for 1 Units. 2-4 Units to 75% LTV with 740 FICO. 5/1 LIBOR is 75% to 680 FICO for 1 Unit and 75% with 740 FICO for 2-4 Units.
  • Temporary Buydowns up to 3% permitted.
(I am a direct lender in AZ, CA, CO, OR, NV, WA )