Monday, March 10, 2008

What the New Jumbo-Conforming Loan Guidelines Mean to San Diego

A 9-page document describes the new lending guidelines (in response to the Economic Stimulus Act of 2008). So, let's cut to the chase(with minor over-simplifications for brevity).

$697,500 is the FHA limit for "jumbo-conforming" loans for San Diego. It should be the same for FNMA & FDMC.

Loan-to-value (LTV) requirements:
- 90% LTV for fixed-rate
- 80% LTV for adjustable-rate
- 75% LTV on a refinance; NO consolidation of 1st and 2nd; NO cash out*
No 30-day lates in past 12-months (on any housing debt)
ARMs must qualify at their reset rate
Full documentation is required
Borrowers must personally have 5% skin in the game

My view is that the lending guidelines are sound and I wish they had been in place four-years ago.

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