Conventional Loan – Down Payment requirements

[HLS]

Loans above $697K in San Diego county are not bought by F/F. There are no standard guidelines for lenders that do them.
I rarely do them, rates are higher and it’s harder to qualify. Like commercial loans, hard to get long term fixed, usually ARMS. The guidelines vary lender to lender.
Often at least 25%-35% down is required.
I’ll post something later…

Up to $697K, F/F have base guidelines. Each wholesale lender adds additional layers of what they will allow. They are all petrified of loan buybacks. If a lender has to buy back a loan from F/F they are stuck with owning it and either service it or resell it at a discount, and lose a chunk of money.

For self employed, most lenders today require 2 years FILED tax returns with transcripts that are accessible from the IRS. If an extension was filed OR 2009 return was filed in April, it isn’t available yet. Need 2007-2008 returns for most.
I do have a lender that will consider ONE year tax return, which opens doors for many that get turned down elsewhere.

It’s not all cookie cutter like many people think and the spread in pricing from lender to lender is HUGE on the exact same loans.

Some lenders have fast service, but their pricing is terrible. Lender with great rates above >$417K may not be good below $417K.

Having an impound account may still get the best pricing. So many variables, but many people just don’t qualify in which case the rates don’t matter.

[CA renter]

[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.
***************************************
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
********************************************
Owner Occupied
85% LTV cash out
SFR only
$200,000 max cash out
700 minimum Fico
41% max DTI
2 months PITI reserves
*****************************************
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
*************************************
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
*********************************************
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?

[CA renter]

[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.
***************************************
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
********************************************
Owner Occupied
85% LTV cash out
SFR only
$200,000 max cash out
700 minimum Fico
41% max DTI
2 months PITI reserves
*****************************************
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
*************************************
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
*********************************************
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?

[CA renter]

[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.
***************************************
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
********************************************
Owner Occupied
85% LTV cash out
SFR only
$200,000 max cash out
700 minimum Fico
41% max DTI
2 months PITI reserves
*****************************************
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
*************************************
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
*********************************************
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?

[CA renter]

[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.
***************************************
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
********************************************
Owner Occupied
85% LTV cash out
SFR only
$200,000 max cash out
700 minimum Fico
41% max DTI
2 months PITI reserves
*****************************************
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
*************************************
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
*********************************************
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?

[CA renter]

[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.
***************************************
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
********************************************
Owner Occupied
85% LTV cash out
SFR only
$200,000 max cash out
700 minimum Fico
41% max DTI
2 months PITI reserves
*****************************************
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
*************************************
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
*********************************************
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?

[djc]

HLS,

Thanks for the info and the updates. It has been a while since I have paid close attention to RE affairs and posts like yours are very useful and welcomed.

Regards,
djc

[djc]

HLS,

Thanks for the info and the updates. It has been a while since I have paid close attention to RE affairs and posts like yours are very useful and welcomed.

Regards,
djc

[djc]

HLS,

Thanks for the info and the updates. It has been a while since I have paid close attention to RE affairs and posts like yours are very useful and welcomed.

Regards,
djc

[djc]

HLS,

Thanks for the info and the updates. It has been a while since I have paid close attention to RE affairs and posts like yours are very useful and welcomed.

Regards,
djc

[djc]

HLS,

Thanks for the info and the updates. It has been a while since I have paid close attention to RE affairs and posts like yours are very useful and welcomed.

Regards,
djc

[HLS]

The 41% DTI is a mortgage insurance company requirement, not a F/F requirement.

With at least 20% down it is still possible to approach 50% of income as a back end ratio which means all of your monthly minimum payments on a credit report + houisng expense. If you have no credit card debt/student loans/car payments etc, you can approach 50% of income with just your housing expense.

It’s the 2nd biggest Ponzi scheme condoned by the govt. The largest Ponzi scheme is 401K’s & other retirement accounts. What will save America ???

[HLS]

The 41% DTI is a mortgage insurance company requirement, not a F/F requirement.

With at least 20% down it is still possible to approach 50% of income as a back end ratio which means all of your monthly minimum payments on a credit report + houisng expense. If you have no credit card debt/student loans/car payments etc, you can approach 50% of income with just your housing expense.

It’s the 2nd biggest Ponzi scheme condoned by the govt. The largest Ponzi scheme is 401K’s & other retirement accounts. What will save America ???

[HLS]

The 41% DTI is a mortgage insurance company requirement, not a F/F requirement.

With at least 20% down it is still possible to approach 50% of income as a back end ratio which means all of your monthly minimum payments on a credit report + houisng expense. If you have no credit card debt/student loans/car payments etc, you can approach 50% of income with just your housing expense.

It’s the 2nd biggest Ponzi scheme condoned by the govt. The largest Ponzi scheme is 401K’s & other retirement accounts. What will save America ???

[HLS]

The 41% DTI is a mortgage insurance company requirement, not a F/F requirement.

With at least 20% down it is still possible to approach 50% of income as a back end ratio which means all of your monthly minimum payments on a credit report + houisng expense. If you have no credit card debt/student loans/car payments etc, you can approach 50% of income with just your housing expense.

It’s the 2nd biggest Ponzi scheme condoned by the govt. The largest Ponzi scheme is 401K’s & other retirement accounts. What will save America ???

[Author]

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