The Federal Housing Finance Agency (FHFA) has issued new loan limits for 2018. These limits govern how large a Conventional loan can be to be approved under Fannie Mae and Freddie Mac Guidelines. The first mortgage loan limits are defined in terms of general loan limits and high-cost area loan limits. The limits are increasing in 2018.
The new base loan limit in most of the country will be $453,100. In 2017 it was just $417,000 and this year it has been $424,100. This is a 6.8% increase, based on real estate appreciation nationwide. Almost every county in the United States will see a loan limit increase.
Certain areas are eligible for High Balance Conforming loans over the $453,100 limit. It can be as high as $679,650 in higher cost counties for 1 unit properties. For Placer, Sacramento, El Dorado, and Yolo Counties this limit is now $517,500. High Balance loans have slightly different guidelines than regular Conventional loans, and may have different interest rates as well, but serve a real purpose in many cities (Roseville, Rocklin, ad Folsom especially) where people can still get Conventional loans, instead of having to go the Jumbo/Non-Conforming route.
Good news on the loan front! For the first time in a decade Conforming loan limits have increased, offering a little bit of relief and flexibility for borrowers that otherwise would be stuck exhausting more of their resources on a larger down payment, or forced into the Jumbo market.
The new Conforming loan limit for California: $424,100…. High Balance Limit in Placer, Sacramento, Yolo, and El Dorado Counties: $488,750
Each is an increase that will make a difference in the required down payment for people who’s loan amount would have been capped at $417,000 or $474,950, increasing the standard limit by $7,100, and the high balance limit for the 4 counties in the Sacramento area by $13,800.
Some higher cost counties, such as in the Bay Area and Southern California, see the high balance limit increasing to $636,150 (from $625,500).
There is no information yet on if this will affect FHA loam limits in any way (historically FHA has adjusted their limits with Fannie and Freddie in most, but not all, counties)
Today, in our industry, we already do pretty much everything electronically. Pretty much…
But there is a lot of paperwork that still has to be received from the borrower, not to mention signing what seems like hundreds of pages at closing. Due to recent statements by Fannie Mae and Freddie Mac, as well as some new “eNotary” features on the horizon, that could all be changing.
The first and most important part of this is the suite of new tools GSE’s Fannie Mae and Freddie Mac are soon to be rolling out to lenders. These tools include things like automated appraisals on certain loans, automatic income verification for most W2 borrowers, and automated asset verification. When applicable these new tools will allow less documentation to have to be faxed/e-mailed to the lender, as well as less time to close, and savings to both the lender and the borrower (especially when the automated appraisal applies).
With these tools Fannie and Freddie are offering some relief from “reps and warrants”, which will create more certainty on the part of the lender and MBS (Mortgage Backed Securities) investors. This should reduce costs for lenders, reduce risk for MBS investors, and (theoretically anyways) should result in shorter loan processing times, lower cost mortgages, and possibly even lower interest rates than otherwise would be able to be offered if these reforms were not implemented.
The automated appraisal will not apply to everyone, nor will the automated income verification (it will not work for self-employed people, for example), but it should result in some documentation relief for most applying for a Conventional mortgage. FHA has no comment. 🙂
The “eNotary” thing is a little further out, beta programs are just beginning, but with the new rules the Fannie and Freddie tools they’re also going to be allowing a fully digital closings, where a notary creates an electronic signature and stamp and all the borrower has to do is click a screen, rather than sign over and over and over again.
Everything will be rolling out in the near future. Of course I will be keeping everyone updated as to the news. This is a VERY big deal when it comes to both the real estate and mortgage industry as it will undoubtedly result in faster loan closings on both purchase and refinance loans, and decreased costs to buyers/homeowners.
As many of you know (and some of you don’t) I felt I had found a career-long home at Innerwork Mortgage a few years ago. When Innerwork was bought out in late 2012 by another company we merged and, of course, we all thought that was going to be for the best but things didn’t work out as planned.
I’m ELATED to announce that I’ve made a move to what I expect to be my home for the next 20 years! At a familiar address, back at the old Innerwork digs, with some of the same players, but with a new banking partner (Roseville-based American Pacific Mortgage).
We’re building a new branch that will be everything the old branch was and SO MUCH MORE! I’m ready to serve the Roseville/Rocklin area like never before and we have some special surprises in store for our real estate partners as well.
Yep, that is right. The city of Lincoln, Ca is still eligible for 100% USDA financing.
Over the last two years USDA was supposed to change their eligible areas based on the 2010 US Census but the date of the new map’s going into effect keeps getting pushed back. The most recent date for the change was Jan 16th, 2014 (it was also slated to change in October 2013, March 2013, and October 2012)…
What does this mean?
Well, it means if you want to buy in Lincoln, or any other city/area that will no longer be USDA-eligible once the new maps go into effect (Auburn being one of them), you now have until (at least) October 1st, 2014 to get into contract and have your lender get the application over to USDA.
For the map of eligible areas plug your subject address into this link on the USDA website and it will tell you if it is eligible or not (Lincoln, CA is 100% eligible as of the search I did today).
If you would like any assistance or would like to get prequalified for a USDA loan please give me a call. In my opinion it is one of the best loans out there, if you want to buy in a USDA-eligible area of course. 100% financing is allowed, it is government-backed so rates are on the lower-end (similar to FHA and VA in most cases), but it does not have the huge UFMIP and annual Mortgage Insurance premiums like FHA does (that makes FHA such an expensive loan in comparison to most other loans these days).
Lets say you are looking in the Northern part of Rocklin but can’t find anything in that your price-range or down payment availability will allow you to qualify for. 12 Bridges is right there and you may be able to (subject to minimum income/asset/credit requirements) buy with a lower down payment, or even none at all.
Yes, I decided to make a move. A few years ago I had found a home in Innerwork Mortgage right here in Roseville that was great for me and allowed me to service my clients and real estate partners as good as, if not better than, anyone else in the market. That was somewhat short-lived when Innerwork was bought out/merged with another company and we had to start all over.
I spent a year with the new, merged, company and for the most part it was good. At first anyways. After a while my ability to service my clients and partners was not up to my high standards and, try as I might to make the changes needed to make the system meet my standards, it just wasn’t happening. I gave it a full year and decided to should start talking to some other mortgage bankers to see if there was something that would suit me better and allow me to provide the kind of service I am known for and demand of myself.
After a long search, talking to and spending considerable time reviewing the operations and systems at more than 10 Roseville mortgage companies, I have found a new home! I am happy and proud to say I am the newest Mortgage Consultant at Paramount Equity as part of the “Paramount Partners” Roseville branch!
Yep, the company with the radio ads…
I know many of you think of Paramount Equity only as a refinance-focused lender, and I thought the same thing as well, however nothing can be further from the truth (otherwise you know I would not have come on board here). Yes, saving families money through refinancing their mortgage is a big part of what Paramount Equity does, but at my branch we are more focused on purchase transactions, working with the local real estate community to support getting buyers into homes.
I will continue to focus on helping people purchase homes and support my real estate partners as I always have done. With a focus on great service and education to my clients, speed and efficient transaction, and transparency with the Realtors that are involved with the escrow. And I am certain that Paramount Equity is the place that will allow me to do these things in a way that meets the highest of standards!
Give me a call with any questions or if I can help in any way. I’ve been over here for two weeks now and am ready to rock and roll!
For those of you not in the industry (and those of you no longer in the industry the last few years) this might not resonate with you but for those of us that are I’m sure you’ll get a laugh out of this!
New Lending Laws
P.S. Sorry I have not been posting regularly of late. I got out of the habit but am going to get back on regular posts right away. Too much good information out there to share! – Greg Cowart