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FHA Changes to Maximum Loan Limits

Please note that the maximum statutory loan limits for FHA mortgages have been increased for the remainder of 2011 and for the 2012 calendar year. Under federal legislation, the statutory loan limits have been increased from the limits that were in effect from October 1, 2011 through November 17, 2011 and restored to the limits that were earlier in effect from January 1, 2011 through September 30, 2011.

Single Family Limits

Apache      $281,250

Coconino    $450,000

Maricopa    $346,250

Gila            $325,000

Mohave       $322,500

Navajo        $308,750

Pima            $316,250

Pinal            $346,250

Yavapai        $390,000

FHA & VA

Changes that went into effect on October 1, 2011.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

FHA

Legislation was not enacted to extend the current Temporary Loan Limits

Federal Housing Administration’s (FHA) Maximum Loan Limits Effective

October 1, 2011.

Maricopa County - from $346,250 to $271,050.

Coconino County - from $450,000 to $362,250.

All other Arizona counties the limit is now $271,050.

The maximum loan limit may be exceeded in a FHA to FHA refinance.

DEPARTMENT OF VETERAN AFFAIRS

VA

DEPARTMENT OF VETERAN AFFAIRS announced changes in Funding Fees effective October 1, 2011

                                            First Time Use    Subsequent Use

            Down Payment     Current New         Current New

Regular 0.00%-4.99%        2.15% 1.40%         3.30%  2.80%

Military 5.00%-9.99%        1.50% .75%           1.50%  .75%

             10% or more         1.25% .50%           1.25%  .50%

Reserves/ 0.00%-4.99%     2.40% 1.65%         3.30%  2.80%

National 5.00%-9.99%        1.75% 1.00%         1.75%  1.00%

Guard   10% or more             1.50% .75%           1.50%  .75%

VA to VA refinance (IRRRL) is now .50% for all.

I have had many of my clients pose the question, “When can I purchase another home since I have had a foreclosure and or a bankruptcy”

The answer is somewhere between 2 years and 7 years.  It depends on the circumstances of the foreclosure or bankruptcy and the type of loan you will be applying for.

Event	Conventional Extenuating Circumstance	Conventional Financial Mismanagement	FHA General Rule
Foreclosure	36 months - minimum of 10% down payment	84 months - minimum of 10% down payment	36 months
Pre-foreclosure or Short Sale	24-83 months -10% down payment 84 months – standard guidelines	24-47 months - 20% down 48-83 months –10% down 84 months – standard guidelines	36 months No waiting period if it was a short sale and there were no mortgage late payments.  Some restrictions may apply.
Chapter 7 Bankruptcy	48 months from the discharge date	48 months from the discharge date	36 months from the discharge date. 24 months extenuating circumstance
Chapter 13 Bankruptcy	24 months from the discharge date	48 months from the discharge date	12 months minimum since the payout period
Consumer Credit Counseling	treated the same as a Chapter 13	treated the same as a Chapter 13	treated the same as a Chapter 13
Multiple Bankruptcies	36 months from the discharge date	60 months from the discharge date	36 months from the discharge date

The foreclosure wait period starts once the property is transferred from your name and foreclosure is completed, not the foreclosure notice date or auction date.

The bankruptcy wait period starts from the discharge date.

Credit must be re-established after a bankruptcy or foreclosure. No late payments or derogatory credit after the bankruptcy or foreclosure.

Housing related reference for 24 months usually required.

Credit report must not indicate excessive obligations that could adversely affect the borrower’s ability to repay the mortgage obligation.

Work history will need to be stable.

An explanation will be required for the reason(s) for the bankruptcy and/or foreclosure.

This is a general reference; please contact me to discuss the specifics of your situation in order to determine your eligibility.

Home Affordable Refinance Program Extended

This refinance option was designed to assist homeowners who have experienced home value declines. The program allows for a maximum loan to value of 105%. This means that the loan amount may exceed the current value of your home by 5%. For example, if the current payoff on your home, along with the fees to refinance equals $200,000, it must appraise for $190,476. The borrower must benefit from the refinance either by a reduced interest rate resulting in lower principal and interest payment or by moving into a more stable product, such as movement from an ARM into a fixed rate mortgage.

The guidelines for Fannie Mae & Freddie Mac are very similar.

• Existing Loan must be held or guaranteed by Fannie Mae or Freddie Mac, prior to March 1, 2009 and the refinance must be completed by June 30, 2012.
• Current lender\servicer can provide that information or go to the Fannie Mae or Freddie Mac website.

http://loanlookup.fanniemae.com/lookup/

https://ww3.freddiemac.com/corporate/

• The borrowers on existing mortgage must be identical and remain on the new mortgage. Additional borrowers may be added. (Freddie Mac) Borrower may be omitted due to death or divorce under certain circumstances.
• New mortgage must be a fixed rate mortgage or a fully amortized arm with an initial fixed period of 5 years or greater. Cannot be interest only.
• No Cash out to the borrower.
• Can only be used to refinance the 1st mortgage. Cannot combine 1st & 2nd mortgage.
• If you have a 2nd mortgage, as long as the 2nd lien holder is willing to subordinate the new guidelines do not limit the combined loan to value.
• No minimum credit score required, however borrower must meet Fannie/Freddie underwriting guidelines, including no mortgage lates in the last 12 months, no bankruptcy and no foreclosure.
• Refinance can be for primary residence, second homes and investment properties.
• Home Appraisal probably will be required, however, not in all cases.
• Employment and income verification will be required.
• If you have private mortgage insurance now, you will be required to have it on this refinance loan. If you do not have mortgage insurance now, you will not be required to have in regardless of the loan to value.
• The new loan will have loan level price adjustments for credit score and the loan to value and combined loan to value risks.
  

If you have any questions regarding your eligibility for this program, please feel free to contact me.  Remember the program ends June 30, 2012.

Thank you.