As of June 5, 2021, this is no longer the case. According to the Federal Housing Finance Agency (FHFA), over two million families could not refinance in 2020 when they might have benefited from it. Unfortunately, lower-income borrowers, especially those who lost income streams due to Covid-19, were unable to refinance because of income requirements. Many homeowners have taken advantage of record-low rates to refinance their homes. Refinancing has been all the buzz this year.
FREDDIE MAC FIRST LOOK INITIATIVE OCCUPANY RULES FREE
This can free up some of your savings for being more competitive in this market, using funds for escalation causes, appraisal gaps, updates if the house isn’t in dream home condition. While people typically assume you need 10% down for a jumbo loan, there are currently products that allow as little as 3.5% down. Loan amounts above $684,250 are considered “jumbo” and often have higher standards for approval. Jumbo loans - meant to finance expensive properties - cannot be purchased or securitized by FNMA and FHLMC. A jumbo loan is a mortgage that exceeds the conforming loan limit set by the federal government. If you are in the market for a jumbo loan, things have gotten easier. Though median home prices have shot up in the last two years (by 25%, according to HUD), what hasn’t changed is that people still need their homes to serve as an anchor for their life. With the ability to obtain desktop appraisals, Jaxzann expects that loan approvals can consistently be obtained in two weeks. Jaxzann reminded me that she pays for her clients’ appraisals so they can be ordered immediately upon acceptance of a purchaser’s offer.
This technology may help alleviate the appraiser shortage in the long term and lower appraisal costs in the current market. Fannie Mae will allow desktop appraisals for certain loans submitted after March 19. With the current red hot housing market, demand for appraisers is outstripping the supply, pushing up fees and extending appraisal completion times. They have rescinded rules imposed in June 2020 requiring self-employed borrowers to supply a year-to-date P&L as well as their most recent 2 or 3 months of bank statements. This reduction in paperwork should make it much easier for self-employed borrowers to obtain financing.Īnother benefit may be found in the potential for lower appraisal fees. Other recent changes by FNMA and FHLMC help self-employed borrowers. Increasing the LLPAs on high-balance, investment and second homes makes interest rates less attractive for the buyers and allows FNMA and FHLMC to offer new programs to help first-time or lower-income homebuyers. Borrowers often pay LLPAs in the form of higher mortgage rates. Loan pricing adjustments vary by borrower, based on loan traits such as loan-to-value (LTV), credit score, occupancy type, and the number of units in a home. An LLPA is a risk–based fee assessed to mortgage borrowers using a conventional mortgage. 5th Fannie Mae and Freddie Mac (FNMA and FHLMC) jointly announced new “loan-level price adjustments” (or LLPAs) for high-balance, investment and second home loans. Until now, those purchasers were able to obtain loans with interest rates that were comparable to those being offered to purchasers who would be occupying their new home as their primary residence.
Demand for second homes has also skyrocketed, as newly remote workers seek more space and better surroundings. Roughly 17% of the homes sold in the last 12 months in the Denver metro area have been sold to investors, according to an article in the Denver Post. I received a call this week from Jaxzann Riggs, owner of The Mortgage Network informing me of several changes occurring at FNMA and FHLMC that may “level” the playing field for some purchasers.