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Posts Tagged ‘Fannie Mae’

Condo Communities

Condo Communities Can Look to Reverse Mortgages and FHA Loans once again …

Written by Clay on . Posted in reverse mortgage

Condo Communities Can Look to Reverse Mortgages and FHA loans again Once Regulations are Adopted The most relevant provision of the changes will emulate the FHFA’s rules regarding the transfer fees for FHA mortgages including reverse mortgages.  In July 2015 FHA began refusing to approve condominiums in higher cost communities such as Rossmoor in Walnut Creek, CA because of the Golden Rain Foundation Membership transfer fees. Here is a look at the provisions as they stand:

  • Reduces the FHA condo owner occupancy ratio to 35%
  • Gives FHA the ability to substantially reduce burdens and streamline the condo recertification process
  • Provides more flexibility for mixed use buildings.
  • Emulates the Federal Housing Finance Agency’s (FHFA) rules regarding private transfer fees for FHA condo lending.
  • Allows for approved lenders to directly endorse Rural Housing Service (RHS) loans
  • Will streamline programs for federally-assisted housing programs

Condo Communities to get Relief After Passage of HR 3700 Bill

For comprehensive details of the HR 3700 bill, click here. Condominium communities, like Rossmoor Senior Adult Community in Walnut Creek, CA are impacted. Soon, current homeowners and potential buyers of condos will once again have access to more flexible FHA financing opportunities including reverse mortgages. The changes will benefit more than just Rossmoor.

 Please contact us for a strategic look at your real estate financing needs. I can be reached at www.signetmortgage.com.

Positive underwriting changes may make qualifying easier!

Written by Clay S. on . Posted in Fannie Mae, Freddie Mac, Loan Modification

PendulumIt is easier to get approved for a mortgage these days … really!  Both Fannie Mae and Freddie Mac made substantial changes that will help qualify more buyers – do I dare say that many of the changes introduced some common sense back in the underwriting??  Some highlights … You can Pay Off Credit Cards to Qualify One significant change involves credit card debt – accounts that are paid down at closing to help qualify no longer need to be closed.  That means a credit card that has been paid in full no longer counts against the applicants qualifying debt to income ratio.  That can make it easier to qualify. Quite often we have clients that were frustrated because there credit report indicated minimum payment on credit card balances that previously had to be considered in their debt to income calculations.  Even if the client could demonstrate that they always paid off the credit card monthly and did not carry a balance it got in the way of qualifying. A credit card paid in full no longer counts as debt. Loan to value increases for High Balance Areas More good news for conforming loans in high cost areas! Fannie Mae guidelines for loan to value are now the same for high balance areas as they have been for standard loan to value maximum. Clients wanting to finance a purchase or refinance a loan can now go up to 95% loan to value with  mortgage insurance for a $625,500 loan on a single-family property in high cost areas such as the San Francisco Bay Area. Previously the limit was more restrictive with loans exceeding $417,000. Non-occupant co-borrowers are now allowed by Fannie Mae Helping a family member by a home particularly in California can be done utilizing a non-occupant co-borrower, typically a parent. That option is now opened up for conforming loans and there is no restriction on the occupying clients’ debt to income ratios. This will open up opportunities for families wanting to help get their kids into a home. I already have two instances where these new guidelines were the difference between getting a loan and not. Contact me if there are not any deals that were “on the edge” and we will work like crazy to see if the new guidelines can put that client in the position they could get financing for their dream home! Clay Selland NMLS #183492 CalBRE #01398801 925-807-1500 x303  (fax 925-807-1505) clay@104.238.124.149

The Basics | Renovation Loans

Written by Clay on . Posted in Renovation Loans

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A Renovation loan can be used to purchase a home or refinance an existing home. A HomeStyle Renovation Loan from Signet can be used to improve an investment property too!  A renovation loan based on the improved value of your home making it a valuable alternative to a construction loan. You can arrange for funds over and above the purchase price of your new home to remodel, make repairs or add a room! A refinance will pay off your existing loan, and provide additional funds for a wide range of improvements – let your imagination go! A renovation loan is a perfect way to fix up a property, or add that extra bedroom you need for your growing family.

There are several basic types of Renovation Loans. HomeStyle loan from Fannie Mae is my favorite, as it allows loan-to-value to 95%, does not have up-front mortgage insurance and is underwritten to standard Fannie Mae guidelines.  The loan is based on the improved value of your home AFTER completion – so you will have the resources to make it your dream home! FHA 203(k) loans come in two “flavors” …
  • Streamline 203k – Renovation costs generally limited to $35,000.  The work can be done by the homeowner or contractors. Typical renovations include painting, carpet and replacement of appliances.  This loan does not require a HUD counselor, and is very close to the cost of a normal FHA loan.
  • Full 203k – Renovation costs are only limited by the FHA loan limits for the county. The renovations are generally more extensive so they require the assistance of a general contractor.  An FHA Consultant is involved to ensure the project proceeds according to plans. Remember, the loan is based on the improved value of your home AFTER completion – so you will have the budget to renovate your dream home!
Energy Improvements – Replacement of a furnace or air conditioner, or adding double pane windows or insulation are examples of renovations that can be included.  An energy audit must be completed to demonstrate the benefit of the improvements. These costs can be over and above the streamline 203k $35,000 limit.

Investment Property – Renovation Loan Options!

Written by Clay on . Posted in Investment Properties, Rental Properties

PrintPurchasing an investment property that needs a little work?  Wish you could include the costs of renovation in the loan?  You can with a HomeStyle renovation loan from Signet Mortgage!

Improvements can be anything that adds value to the home.  No longer will a purchase be held up because of the condition of the home – a renovation loan will allow repair services to cater you after closing with funds borrowed at the time of purchase. The lender simply creates a hold-back for the funds that are dispersed as the work is completed. It doesn’t matter whether you are a residential customer or large corporate customer with a high-rise building, you’ll receive the same high-standard of care, service and support. Property must be a single-family home and the loan-to-value based on the “as completed” value is limited to 75%.  The underwriting is based on slightly more conservative Fannie Mae guidelines requiring a 720 FICO score, etc. Cost of improvements can be up to 50% of the “as completed value” which provides a great deal of flexibility to buy a distressed property and turn it into a solid investment. Improve your return on investment by putting less cash into the property. This example illustrates purchasing a $400,000 property with and without a renovation loan. The ability to add the desired renovations into the value that the 75% loan is calculated on, lowers your cash investment.

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If you made it this far you are obviously interested in the details on how a renovation loan can work to purchase your next investment property.  As I am a CPA and licensed as a real estate broker I am uniquely suited to assist with even the most complex situations and would be happy to help.  Please give me a call today.

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Clay Selland, President, Signet Mortgage Corporation

925-807-1500 x303

Clay@signetmortgage.com

Fannie Mae & Freddie Mac to allow retirement assets for qualifying income

Written by Clay S. on . Posted in Fannie Mae, Freddie Mac, Retirement

Retirement assets to be considered in qualifying for conventional loans under new Fannie Mae & Freddie Mac policies. Should add flexibility for retired individuals wanting a conventional loan.

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One of the unfortunate outcomes of the economic crisis since 2008 has been perfectly well-qualified borrowers that cannot get a loan under the very strict underwriting guidelines we have all been living with the past five years. Finally, policy changes at Fannie Mae and Freddie Mac may help those with substantial retirement assets qualify for low rate conventional loans by including in income eligibility factors such as IRA, 401(k) and other retirement assets, to supplement existing fixed income such as Social Security. I can think of a number of clients over the past five years that have been frustrated at their inability to qualify for a mortgage when they had hundreds of thousands, and sometimes over a million, dollars in their retirement funds. While Fannie Mae and Freddie Mac can come out with new underwriting guidelines, it will be important to get investors on board to accept these new policies and provide the dollars necessary to fund these loans.  The early success of the HARP refinance program for borrowers with less than 20% equity in their homes was torpedoed by a lack of investor appetite for these riskier loans. I would not anticipate the same kinds of issues with this new program, however. This is an exciting change that would return some flexibility to those making a transition in retirement to a new home. If you would like to talk with a mortgage advisor who thinks long-term and strategically about your financial investments including your liabilities – please give me a call.

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