(Article originally published May 24, 2009.)
In an earlier article, I discussed how The American Recovery and Reinvestment Act, which passed in February 2009, had again increased mortgage loan limits to $729,750 for one-unit properties within the continental United States. (Loan limits for multi-unit properties are higher.) Yet the mortgage industry hadn’t yet implemented these increases.
As of this month, lenders across the industry are beginning to honor these new loan limits. However, mortgage loans with these high-balance limits will be subject to additional requirements. Fannie Mae and Freddie Mac will not purchase these loans unless they conform to additional criteria, such as higher credit scores, loan-to-value limitations, and in some cases, even additional appraisal field reviews!
BOTTOM LINE: If you’re currently trying to obtain a mortgage that’s above $417,000 and considered a “jumbo” loan, take the following precautions: Ensure that your mortgage advisor is fluent on these new guideline changes and be sure to discuss all of your loan options, including bypassing these guidelines completely, by using a portfolio lender.
Since 1992, Warren Goldberg has helped thousands of clients own their homes, refinance their mortgages, restructure their debts, and invest in real estate. Warren is known for his wide knowledge of mortgage products and wealth-creation strategies.