Unless subsequent regulation is passed to further extend the temporary loan limits, the temporary high balance loan limits defined by the American Recovery and Reinvestment Act of 2009 (ARRA) will expire on September 30, 2011. This is generally being viewed as going by the NOTE DATE – loans with a NOTE DATE on or after 10/1/11 must use the lower limits.
Each investor may make different rules that may require an earlier funding or lock date or a final delivery date. Please be advised that any applications for a loan amount between $271,050 and $316,250 (in Pima County) will need to lock, close and fund BEFORE 9/30/11 to be safe. This is not based on CASE NUMBER ASSIGNMENT DATE!
ALL OF ARIZONA WILL BE AT THE FLOOR LIMIT OF $271,050 except Cococino County which is $333,500
To further complicate matters the current floor of $271,050 may go down at the end of the year. BTW – The $271,050 is based on 65% of the Conforming loan limit from before 2009. This year the conforming loan amount is subject to change and just like every year before 2008 will go up or down based the median home price in the US. If I was to bet on this I would have to say they will likely go down. The conforming limit of $417,000 may be extended further but no one knows.
Call Todd Abelson at Sunstreet Mortgage for all your financing needs! (520) 331-LEND
Effective Monday April 18th, the monthly Mortgage Insurance premiums FOR ALL FHA LOANS regardless of down payment have increased. As example, for a $150,000 30-year loan with minimum down payment the increase equates to about $31 per month. Below is the new chart for reference – note that it’s a flat 25bps per month across the board.
Up until this change, FHA loans with 3 1/2% down were actually much more cost effective as compared to Conventional Loans with 5% down IF you were able to get the Seller to pay the 1% Up-Front MIP. Given how difficult it is to get a 95% Conventional loans approved, FHA commanded the vast majority of the market…until April 18th. I guess FHA didn’t want to be more competitive (i.e., priced lower) than Fannie or Freddie for the average homebuyer…
Regardless, FHA is still the best opportunity for the average home buyer to purchase a home given today’s market.
Call Todd Abelson at for all your home financing needs! (520) 331-LEND (5363)
On January 15, 2010, HUD issued Waiver of Requirements of FHA regulations 24 CFR 203.37a(b)(2), allowing a one year waiver to its flip policy on transactions where the property seller is owner-of-record 90 days or less. In that Waiver, HUD provided additional requirements for FHA flip transactions where the sale price of the subject property has increased by 20 percent or more above the seller’s original acquisition cost.
In preparing for the end of this waiver period, Investors have just CEASED buying loans that require this waiver. In otherwords we’re back to the original rules prior to the waiver – If the current owner of record has been on title for less than 90 days, the following exemptions still apply.
- Bank owned property that they acquired by foreclosure. MUST be a federal or state chartered institution. This exemption does not apply to private lenders or other lenders such as a mortgage company that is not a federal or state “bank”;
- Inherited properties;
- Sales by relocation companies when they acquired the property through a legitimate relocation of an employee;
- HUD, Fannie, Freddie, state or local government owned properties;
If you are a Buyer (or a Realtor working with a Buyer) purchasing a home under the terms of this waiver, contact your lender NOW for an update.
Call Todd Abelson & Tyler Ford at Sunstreet Mortgage at (520) 331-LEND for all your mortgage needs!
As a result of new Public Law 111-229, FHA was given authority to change the amount charged to borrowers for both the Up-Front and the Annual Mortgage Insurance premiums. These changes as outlined in Mortgagee Letter 2010-28, are effective for all case numbers assigned on or after October 4th, 2010.
Here are the 3 things you need to know:
1. The Up Front premium is now 1.0 % for all standard FHA programs
2. The Annual premium is now .90% for LTVs GREATER than 95% on 30 year loans and .85% for LTVs EQUAL to or LESS than 95% on 30 year loans
3. The Annual premium is now .25% for LTVs GREATER than 90% on 15 year loans and .00% for LTVs EQUAL to or LESS than 90% on 15 year loans
These NEW premiums apply to purchases, regular refinances and streamlines.
Please note that this new law also gives FHA the authority to raise the Annual premium at will up to 1.5% for LTVs at or below 95% and 1.55% for LTVs more than 95%.
The result will be HIGHER monthly mortgage payments on new loans, although Borrowers will maintain a bit more equity. Just what we needed, right? HIGHER mortgage payments!!!
If you are in the process of locking in an FHA loan, I suggest you get your FHA case # assigned THIS WEEK to beat the new fees!
Call Todd Abelson & Tyler Ford at Sunstreet Mortgage in Tucson, AZ at (520) 331-LEND for all your mortgage needs!
In an unbelievably native attempt to prop up the FHA Mutual Mortgage Insurance Fund, effective September 7, 2010 the Up Front Mortgage Insurance Premium (UFMIP) is decreasing from 2.25% to 1.00% and the Monthly Mortgage Insurance Premium is increasing from .50%-.55% to .85%-.90%.
Click here to read the full “Special Addition” letter
Now I can’t begin to see things from there side, but here’s how I see it – the monthly cost of owning a home will increase; here’s a typical example: Assuming a $125,000 purchase price using a 30-year fixed rate FHA loan at 4.50% under the CURRENT terms (3 1/2% down, 2.25% UFMIP, .55% MMI) the Principle, Interest and MMI portion of the payment will be $680.23. Under the NEW terms (1.0% UFMIP, .90% MMI) the same home will cost $707.77 – $27.54 per month MORE (an increase of 4% in payment).
While this may not be alot to most people, it may be the difference between loan approval and denial. Besides what does this do to help people BUY homes and “mop up” the excessive inventory? PLUS if less people can afford to purchase a home doesn’t that mean LESS moneywill go to into the FHA Mortgage Insurance Fund which defeats the whole purpose? This move is akin to raising taxes to help the economy. It doesn’t a genius to see that it doesn’t work in business world and so it probably won’t work in Real Estate world either.
Good work FHA!!! The addage “we’re with the government and we’re here to help” has never been more true…
