Freddie Mac released an update today detailing the new guidelines for so-called “conforming jumbo mortgages” that the mortgage financier will soon begin to purchase.
The new loan limits, as most probably know, allow a max loan amount of 125 percent of the area median house price, not to exceed $729,750 for a one-unit property (what is the new jumbo loan limit?).
Below are select credit and underwriting requirements for originations with note dates on or after March 1, 2008 up to and including December 31, 2008:
Available loan programs include 15, 20, 30, and 40-year fixed rate, fully amortizing mortgages, as well as 30-year fixed mortgages with a 10-year interest-only option, and both full amortizing and interest-only five-year adjustable-rate mortgages.
Purchases and rate and term refinances are available for one-unit properties including primary residences, second homes, and investment properties, but cash-out is only permitted on owner-occupied properties.
It should be noted that a 700 Indicator score is required for LTVs above 75 percent, and 660 is required for LTVs less than or equal to 75 percent.
For cash-out refinances, the minimum Indicator score is 720 and the maximum proceeds may not exceed $100,000.
The max LTV for second homes and investment properties is only 60 percent, and the minimum Indicator score is 660.
The max debt-to-income ratio is 45 percent, and 2 months of verified assets are required for primary residences, 6 months for second homes and NOOs.
Full documentation will be required unless the Loan Prospector® Accept Plus documentation class applies, and no 30-day lates will be permitted within the last 12 months.
Maximum seller contributions are 3 percent for primary residences and 2 percent for second home and NOO.
And they come with some hefty delivery fees, especially for high LTV cash-out refinances.
Freddie also noted that it will purchase existing qualifying loans from mortgage lender-held portfolios with note dates on or after July 1, 2007 up to and including February 29, 2008.
The GSE said a wider product set may be available for these previously held loans, and they will begin reviewing and purchasing in late March.