Wednesday, February 16, 2011

New Lending Rules On The Way

Fannie Mae, Freddie Mac and FHA are expecting to make some changes in the near future and every buyer or seller needs to be aware of these changes.

Just a brief run-down from the information I received. It is just to make you all aware.

Fannie Mae - Freddie Mac: Expected Changes

* Conforming High Balance/Jumbo Loan Limit Decrease from $729,000 to $625,000

* More Risk Based Pricing Premiums and Add Ons

* New 5% Lender Risk Retention Requirement for many Conventional Loans

* Stricter Condominium Project Approval and Financing Guidelines

* Stricter Minimum Fico Score Requirements

FHA Financing: Expected Changes

* Mortgage Insurance Premium Increases

* Condo Project Approval Expiration's

* Possible Increase in Minimum Down from 3.5% to 5%

* Possible Reduction in Allowable Seller Closing Cost Credit from 6% to 3%

* Possible Increase In Minimum Fico Score

These are huge changes that will cause some buyers to lose purchase power. That means less buyers out there for sellers to sell to.

Sellers, be aware, price properly. Buyers, be aware, get off the fence.

One of my favorite mortgage brokers provided this information in a neat orderly fashion for me to pass on to my clients.

Hope it helps.

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