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fha updateFHA published the 2017 mortgage limits this afternoon.  They follow the limits outlined in the FHFA announcement last week.

The new FHA limits apply to case numbers assigned on or after January 1st, 2017.

The new single-family “floor” is $275,665 and the new maximum loan amount in high cost areas is $636,150.


For the Dallas-Fort Worth area most counties will see an increased loan limit up to $362,250.  Just to be sure, though, here’s the link to search your specific county

FHA County Loan Limit Search


For HECMs, the maximum claim amount for FHA-insured HECMs will be $636,150.

Here is a link to areas that had increases in 2017 (including those that increased from $271,050 to $275,665):

http://portal.hud.gov/hudportal/documents/huddoc?id=limitsincreasedcy16.pdf

No areas were decreased from 2016 to 2017.  

Mortgagee Letters:

Mortgagee Letter 2016-20 (forward):  http://portal.hud.gov/hudportal/documents/huddoc?id=16-20ml.pdf

Mortgagee Letter 2016-19 (reverse):  http://portal.hud.gov/hudportal/documents/huddoc?id=16-19ml.pdf

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house logo with ascending arrowCheck out the new release below. Conforming loan limits will increase from $417,000 to $424,100 in 2017. This is the first increase in almost 10 years.

FHFA Announces Increase in Maximum Conforming Loan Limits for Fannie Mae and Freddie Mac in 2017

FOR IMMEDIATE RELEASE
11/23/2016
Washington, D.C.

The Federal Housing Finance Agency (FHFA) today announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2017 will increase. In most of the country, the 2017 maximum loan limit for one-unit properties will be $424,100, an increase from $417,000. This will be the first increase in the baseline loan limit since 2006. In higher-cost areas, higher loan limits will be in effect.

The Housing and Economic Recovery Act of 2008 (HERA) established the baseline loan limit of $417,000 and requires this limit to be adjusted each year to reflect the changes in the national average home price. However, after a period of declining home prices, HERA also made clear that the baseline loan limit could not rise again until the average U.S. home price returned to its pre-decline level. Until this year, the average U.S. home price remained below the level achieved in the third quarter of 2007 and thus the baseline loan limit had not been increased.

Earlier today FHFA published its third quarter 2016 House Price Index (HPI), which makes clear that average home prices are now above their level in the third quarter of 2007. The expanded-data HPI value for the third quarter of 2016 was roughly 1.7 percent above the value for the third quarter of 2007, and thus the baseline loan limit will increase by that percentage.

High-cost areas
In areas where 115 percent of the local median home value exceeds the baseline loan limit, the maximum area loan limit will be higher. HERA sets the maximum loan limit as a function of the area median home value, while setting a “ceiling” on that limit of 150 percent of the baseline loan limit.
This year, median home values generally rose in high-cost areas. Because the baseline loan limit will be higher in 2017, the new ceiling limit will also be higher. The new ceiling loan limit, which applies in areas with the most expensive homes, will be $636,150 (150 percent of $424,100) for one-unit properties in the contiguous U.S.

Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $636,150 for one-unit properties, but actual loan limits may be higher in some specific locations.

County-level data
As a result of generally rising home values, the increase in baseline loan limit, and the rise in the ceiling loan limit, the maximum loan limit rose in all but 87 counties (or county equivalents) in the country.

A list of the 2017 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found here. A map showing the maximum loan limits across the country can be found here. A description of the methodology used for determining the maximum loan limits can be found in an addendum to this news release and a short video shows the process used and why the loan limit is rising.

Questions concerning the maximum conforming loan limits can be addressed to LoanLimitQuestions@fhfa.gov.

Source:Federal Housing Finance Agency (FHFA)

no-moneyYes! In addition to VA & USDA we have the Wealth Builder Loan

What Is the Wealth Building Loan?

Designed as an equity-creating mortgage option, the Wealth Building Loan requires no down payment and offers offers eligible borrowers a 7-1 Adjustable Rate Mortgage with a 20-year amortization.

Wealth Building Loan Benefits

The Wealth Building Loan eliminates monthly mortgage insurance payments nearly four years sooner than a 30-year conventional loan with a 3 percent down payment. Overall, this loan option helps homebuyers build equity quickly by applying more of their payment to principal and less to interest each month.

Wealth Building Loan Qualifying Factors

A few qualifying factors for this program include:

  • Occupancy: Primary residence, owner occupied
  • Property type: 1-unit residences, condominiums
  • Maximum loan amount: $417,000 (except in certain FHFA High Cost Areas)
  • Loan type: 7-1 Adjustable Rate Mortgage with a 20‑year amortization

Learn More About the Wealth Building Loan Application Process

Call or email me today and I will walk you through the Wealth Building Loan application process and answer any questions that may arise. Get started with a pre-qualification!

With adjustable rate mortgages, the interest rate is variable and may increase or decrease every year after the initial fixed rate period based on changes to an index. This could result in an increase in the monthly payment. All loan requests are subject to credit approval as well as specific program requirements and guidelines. 

question mark manAnswer: To remove private mortgage insurance you must be up to date with your monthly payments. And you have to reach the date when the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home.

GREAT info from the CFPB’s original articlehere

To remove private mortgage insurance (PMI) that you pay on your mortgage loan, you must be up to date with your monthly payments. These rules apply to mortgages closed on or after July 29, 1999. Federal law generally provides two ways for you to remove PMI from your home loan: canceling PMI or PMI termination.

Request PMI cancellation

The Homeowners Protection Act gives you the right to request that your lender cancel PMI when you have reached the date when the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. This date should have been given to you in writing on a PMI disclosure form when you received your mortgage. If you can’t find the disclosure form, contact your lender.

You can also make this request earlier if you have made additional payments to reduce the principal balance of your mortgage to 80 percent of the original value of your home.

There are other important criteria you must meet if you want to cancel PMI on your loan:

  • Your request must be in writing.
  • You must have a good payment history and be current on your payments.
  • Your lender may require you to certify that there are no junior liens (such as a second mortgage) on your home.
  • Your lender can also require you to provide evidence (for example, an appraisal) that the value of your property hasn’t declined below the value of the home when you first bought it. If the value of your home has decreased, you may not be able to cancel PMI.

If you meet these requirements your servicer generally must cancel your PMI when you request it.

Automatic PMI termination

Even if you don’t ask your lender to cancel PMI, your lender still must terminate PMI on the date when your principal balance is scheduled to reach 78 percent of the original value of your home. You also need to be current on your payments on the anticipated cancellation date. Otherwise, PMI will not be terminated until shortly after your payments are brought up to date.

It’s worth noting a termination request is different than a cancellation request. Your lender must terminate PMI even if the principal balance of your loan has not actually reached 78 percent of the original value of your home – for example, because the value of your home declined.

Final PMI termination

There is one other important requirement that some homeowners need to be aware of:  your lender must terminate PMI if you reach the midpoint of your loan’s amortization schedule before the 78 percent date. The midpoint of your loan’s amortization schedule is halfway through the life of your loan. Most loans are 30-year loans, so the midpoint would occur after 15 years have passed.

Termination of PMI at the loan’s midpoint may occur before reaching 78 percent of the original value of your home for people who have a mortgage with an interest-only period, principal forbearance, or a balloon payment. Keep in mind that you must be current on your monthly payments for termination to occur.

If your loan is guaranteed by the Federal Housing Administration (FHA) or Department ofVeterans Affairs (VA), these rules generally won’t apply.  If you have questions about mortgage insurance on an FHA or VA loan, contact your servicer.

If you have lender-paid mortgage insurance, different rules apply.

fha updateGreat news friends – homebuyers in the DFW metro (and surrounding areas) will see increased purchasing power thanks to FHA’s decision to increase loan limits beginning his January (2016). Previously the max loan amount for Dallas – Fort Worth area was $310,500 which means buyers could buy a $321,750 home by putting the very minimum down. However, as of January 2016 the max loan amount increased to $334,650!  This means buyers can buy a $346,787 home with the minimum 3.5% down payment – an increase of $24,900 in purchasing power!! This is GREAT news!

To find out the max loan amount in your specific county follow this link FHA Max Loan Amount Search!

I’ve had several FHA questions lately so I thought I’d include some tips and rules of thumb for you to use as a reference guide. With FHA’s max loan amount increasing and conventional loan credit guidelines still a little tight FHA is becoming more and more popular.

31/43 qualifying ratios (aka Debt-to-Income ratios– this means that your client’s total debt ratiomonthly payments (those that report to the credit bureaus) + their house payment (PITI) should not exceed 43% of their GROSS monthly income.  The first number (31) represents the percentage of their income that the house payment (PITI) alone should not exceed.  These guidelines can sometimes be exceeded with an automated-underwriting decision (computer generated approval): Example, the Holmes’s earn $5000 p/mo (total farceJ) before any taxes are withheld.  In this case the Holmes’s should keep their total house payment close to $1550 and their total monthly payments (credit cards, auto & boat loans, student loans, etc.) + the total house payment close to $2150.  Again, with automated underwriting lenders can typically get outside these ratios….but these are good rules of thumb.

$334,650– this is the max loan amount in the DFW area.  Can the sales price be higher than this loan amount?

Yes, absolutely!  As long as your client has money to put towards a down payment so that the loan amount is not exceeding the max in your county, the sales price can exceed the max loan amount.  For example, you can purchase a $400,000 home with an FHA loan as long you put down enough money to bring the loan amount down to $334,650.  This works GREAT for clients that may have a few bumps/bruises on their credit report yet have a stockpile of cash for down payment.

Now, assuming they are putting the very minimum down of 3.5% they’d be able to purchase a home with a sales price of $346,787 with an FHA Loan.

Example – purchase price = $346,000….3.5% down payment = $12,110…..loan amount = $333,890

plusPLUS, the seller is allowed to pay their closing costs (as long as it’s negotiated)!

PLUS PLUS, the entire down payment can be a gift!!

Go HERE to search your specific county FHA Max Loan Amount Search!

What is the down payment requirement? – FHA requires a minimum 3.5% cash investment.  Can this be a gift?

Yes! The entire 3.5% can be a gift!

What are the non-allowables? – What dollar amount should you put in the contract for FHA non-allowables?  NONE, ZERO!  Those were the old days!  The only non-allowable is the tax service fee which is typically less than $80.  This can easily be absorbed by a lender.

Is there a minimum credit score? – Most lenders have gone to a 640 credit score requirement.  Although FHA does not have a published minimum credit score lenders have noticed a pattern of poor performance with credit scores lower than 580.  We will allow for as low as a 600 credit score on our in-house product.

According to Cole, this is GREAT news!

medical professionalsYou’ve worked hard to achieve your professional goals—now let me help you achieve your home ownership dreams.

New low down payment home loan available for doctors and dentists who have recently completed their residency, the Medical Professional Program allows you to finance your home before you start your new job – that’s right, BEFORE you start your new job!

  • Finance up to $650,000 with a minimum 3% down payment,
  • or up to $850,000 with a minimum 5% down payment.
  • 5/1, 7/1 and 10/1 adjustable rate mortgage (ARM) programs available.
  • Competitive rates.
  • Student loan debt may be excluded from the debt-to-income calculation (ask for details).

medical professional logoI’ll work with you to ensure a smooth process from application to close so you can focus on your career, not your loan.

Please contact me today! cole@coleholmes.com

VA Loan

November 5, 2015 — Leave a comment

USA flag soldier

You served your country. Now let me and your country return the favor with special financing just for veterans. VA loans reward veterans for their service and sacrifice on behalf of our country in a number of ways.

What Is A VA Loan?

VA loans are a special type of home mortgage reserved for active military members and veterans. These home loans are guaranteed by the U.S. Department of Veterans Affairs and offered by participating approved lenders like Waterstone Mortgage.  VA loans allow eligible veterans and active military personnel to realize their home buying dreams and help existing VA
homeowners with money-saving refinance options.

VA Loan Benefits

VA loans are designed to provide long-term home financing to qualified veterans and, in some cases, their surviving unmarried spouses.  In many instances, their interest rates can be better than other conventional loans.

VA loans offer a number of advantages over other types of mortgages, including:

  • No penalty fee if you pay the loan off early
  • No private mortgage insurance requirements
  • Less than perfect credit can apply
  • No/Low down payment requirement
  • VA may be able to provide some assistance if mortgage payment problems arise

Who is Eligible For A VA Loan?

  • Active-duty military
  • Veterans
  • Reservists and members of the National Guard
  • Some surviving spouses of veterans

These eligibility requirements are unique to VA loans. In addition to past or present military service, standard home loan criteria like your credit score and income will also play a role in your eligibility.

Certificate of Eligibility

In order to apply for a VA-sponsored loan, you will need to obtain a Certificate of Eligibility (COE). Your COE verifies to lenders that you meet the requirements necessary to obtain a VA-sponsored loan. Applying for a COE is straightforward and can be done online, through the mail or through a lender.

Active duty military personnel and current National Guard members or Reservists who have never been Federal active service will need to present a current statement of service in order to obtain a COE.

Veterans and current or former National Guard members and Reservists that have been activated for Federal active service will need to present a DD Form 214 confirming their past service.

Get Pre-Qualified For A VA Loan

Let an experienced VA financing professional at Waterstone Mortgage help you navigate the VA loan process. Get started with a pre-qualification today.


Subject to credit approval. A VA loan is a government-insured loan subject to certain qualifications and restrictions. A VA funding fee is typically required, which can be financed into the loan amount. If you are a servicemember on active duty, prior to seeking a refinance of your existing loan, consult yourlegal advisor regarding the loss of any benefits you are entitled to under the Servicemembers Civil Relief Act or applicable state law.