New Conforming Loan Guidelines
Here are the much anticipated new guidelines set by Fannie Mae and Freddie Mac for the temporary increase to the conforming limit.
Loan Eligibility – Loans must be conventional first lien mortgages only
|
Loan Purpose
|
LTV | CLTV | Minimum Fico |
| Primary Residence | 90% | 90% |
LTV > 80%: 700 LTV < 80%: 660 |
| Rate/Term Refi | 75% | 95% | 660 |
| Second Home & Investment Prop. |
60% | 60% | 660 |
| Rate/Term Refi | 60% | 60% | 660 |
| Eligibility Requirements | |
| Eligible Product | 30 year fixed |
| Property Type | 1 unit (SFR, PUD, Condo) |
| Reserves |
Pimary residence = 2 months PITI payments Second Home & Investment prop. = 6 months PITI payments |
| Debt to Income Ratio | 45% Max |
| Documentation | Full |
| Borrower Contribution | For purchase tranasactions, the borrower must contribute at least 5% from his or her own funds to the transaction, regardlessof the LTV |
| Interested Party Contrib |
Max. of 3% is permitted for primary residence and second homes regardless of LTV Max of 2% is permitted for investment properties |
Ineligible Products, Features, or Transaction Types
- Cashout refi's
- Cooperative Projects
- Interest Only products
- Temporary Buydowns
- 2-4 unit properties
Intial parameters introduced a couple of weeks ago indicated the 5/1 ARM and 5/1 interest only products would be part of the product scope, however these programs were not released at this time. It is possible these products could be forthcoming.
LTV – is the loan amount expressed as a percent of either the purchase price or the appraised value of the property.
CLTV -the proportion of loans (secured by a property) in relation to its value.
FICO – a credit score used by many mortgage lenders that use a risk-based system to determine the possibility that the borrower may default on financial obligations to the mortgage lender.
