Fannie Mae and Freddie Mac are toughening their credit score and down-payment rules for as of April 1st, 2009. Lenders are already taking these fee increases into account, passing the cost on to the borrower, and those buyers looking to purchase a condominium will be impacted most significantly.
The LA Times explains that a buyer with a FICO score between 700 and 720 will pay an extra three-quarters of a point. Even someone with a 739 FICO will get dinged with a quarter-point add-on. Applicants buying a condominium that cannot come up with a 25% down payment will be hit with a three-quarter point add-on penalty, no matter how high their credit score, simply because they are not buying a traditional detached, stand-alone home. Buyers of duplexes, in which one unit is owner-occupied and the other is rented, will be charged a flat 1% add-on from Fannie, even if they’ve got FICO scores above 800 and make 50% down payments.
There is still one option for buyers looking to secure a loan without these penalties – FHA loans. Currently in Cincinnati, and across Hamilton County, the FHA loan limit is $337,500 and the down payment requirement is 3.5%. FHA loans have different restrictions such as PMI insurance that need to be paid for by the borrower. For more information on how you can leverage an FHA loan, especially in lieu of the tightening loan regulations, contact me at Alison.Moss@comey.com.
The
Pingback: cinplify.com
Pingback: More Mortgages Eligible for Refinancing (Washington Post)
I would suggest to be safe and take action to improve your credit score as best you can. You need to take actions months before you think about applying anyway.
Pingback: fha refi