[quote=HLS]It’s been available starting this month..I suppose that you could say that Fannie/Freddie are lowering standards a bit, but it is credit score sensitive, and it’s difficult for some to provide the full documentation that is required and reserves.
FHA has gotten more expensive but not tougher.
FHA is like assigned risk auto ins. Available to many, if you are willing/able to pay for it.
I think that FHA now requires 10% down below a certain credit score.
F/F 5% down been available for a few weeks. Different lenders started at different times. Not all lenders are offering it.
I have seen some strange requirements that vary from lender to lender.
Getting turned down at one lender doesn’t necessarily mean that you cannot qualify with another.
The first lender I had that offered it still requires a 760 mid score for 5% down. I see that one lender has lowered their credit score guidelines as below. They only look at the middle of the 3 credit bureau scores.
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Owner Occupied
95% LTV Purchase OR Rate and Term Refi
Condo, SFR, PUD
Up to $417,000
680 minimum Fico
41% max DTI
2 months PITI reserves
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Owner Occupied
85% LTV cash out
SFR only
$200,000 max cash out
700 minimum Fico
41% max DTI
2 months PITI reserves
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2nd Homes
90% LTV Purchase OR Rate and Term Refi
SFR – NO condos or attached housing
Up to $417,000
680 minimum Fico
41% max DTI
2 months PITI reserves
Property must be located in resort or vacation area
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Owner Occupied Agency Jumbos (Over $417K)
90% Purchase or Rate and Term Refi
Condo, SFR, PUD
Up to $729,750
Field review required loan amounts >= $625,500
740 Fico
41% max DTI
6 months reserves
3% max seller concession
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F/F have pricing hits for lower credit scores.
It is possible that someone with a low score can get a better loan with FHA.
Reserves are more important and getting more difficult for many, a new wrinkle…
Let me know if any explanations are needed… HLS[/quote]
Thanks, HLS.
IMHO, these are still way to risky, especially when combining the low LTV with 41% DTI. The 90% LTV on second homes is incredibly risky, as I think any second home/investment home should require at least 25% down.
I thought they were supposed to learn a lesson about the over-reliance on FICO scores…
It looks like these loans are still very vulnerable to default risk…not to mention the interest rate risk if rates go up.
Oh well, I guess that’s what we get when the Fed/govt are backing the entire mortgage market in a foolish attempt to keep prices artificially high, right?
