NPR (National Public Radio) ran a story on Morning Edition (click link to listen) this morning regarding FHA’s reining-in of irresponsible vendors of it’s loan products.
This comes on the heels of tightening up of other lending practices. Yesterday our office listened to a presentation by Milly Pollock of Stanford Mortgage on Fannie Mae’s (FNMA) new loan eligibility guidelines. Here they are in a nutshell:
Residential borrowers must have a debt-to-income ratio generally no higher than 45% (50% with strong compensating factors).
Borrowers with a foreclosure on their record are not eligible for a loan for 5 years, and then must have 10% down and a credit score of 680 or above (borrowers who have given up their deed in-lieu-of foreclosure or who have filed bankruptcy are not eligible for 4 years).
Buyers of two unit properties, where one of the units is their primary residence, must have a minimum of 20% down for a fully amortized loan (25% for interest only loans). If the two unit property is strictly an investment, with no owner occupancy, the minimum down is 25% for a fully amortized loan and interest only loans do not qualify.
Additionally, there are new requirements for the amount of reserves a borrower must have available – two months reserves for the purchase of a second home, 6 months reserves for investment properties.
This comes on the heels of tightening up of other lending practices. Yesterday our office listened to a presentation by Milly Pollock of Stanford Mortgage on Fannie Mae’s (FNMA) new loan eligibility guidelines. Here they are in a nutshell:
Residential borrowers must have a debt-to-income ratio generally no higher than 45% (50% with strong compensating factors).
Borrowers with a foreclosure on their record are not eligible for a loan for 5 years, and then must have 10% down and a credit score of 680 or above (borrowers who have given up their deed in-lieu-of foreclosure or who have filed bankruptcy are not eligible for 4 years).
Buyers of two unit properties, where one of the units is their primary residence, must have a minimum of 20% down for a fully amortized loan (25% for interest only loans). If the two unit property is strictly an investment, with no owner occupancy, the minimum down is 25% for a fully amortized loan and interest only loans do not qualify.
Additionally, there are new requirements for the amount of reserves a borrower must have available – two months reserves for the purchase of a second home, 6 months reserves for investment properties.
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