Update to 2009 FHA Refinance Guidelines
Update to 2009 FHA Refinance Guidelines
VHDA Changes to Maximum Qualifying Ratios
New Changes to the Maximum Debt to Income Ratio 50.00% for all VHDA Loans which was upped from 43%. This will allow more people to qualify with limited income. This is great news! Below are the official changes taking place Feb 2009.
All VHDA loans (including FHA, VA, RHS, PMI or uninsured loans) will be limited to a maximum of 50.00% debt to income ratio when using an automated underwriting Approve/Eligible Decision.
Stated program ratio guidelines will apply for manually approved loans. This new restriction is effective for loan reservations made beginning February 1, 2009.
FHA Plus: (103% Financing)
VHDA will continue to accept FHA Total Scorecard approvals for FHA Plus with the following limitations:
Loans may exceed FHA’s standard ratio requirements of 31% payment to income and 43% debt to income (to a maximum of 50% debt to ratio) only if the applicable credit score is 620 or above.
Credit scores below 620 and non traditional credit must adhere to the maximum 31%/43% FHA program ratios.
This new requirements are effective with loan reservations made beginning February 1, 2009.
Reminder: FHA Changes Effective Jan 1st 2009 Highlights
Note: although a Mortgagee Letter has not been published as of the deadline for this article, the FHA previously indicated that 97.75% LTV will be published and effective on Jan 1, 2009. Any other changes announced in the Mortgagee Letter will be analyzed and communicated as soon as possible.
Note:At this time, the revised LTV does not impact: 203(h) for disaster victims & HUD 184 for Native American loans
CONFORMING LOAN LIMIT FOR U.S. TO REMAIN $417,000 IN 2009.
Other Loan Limits vary by different counties.
Below are the major limits for the State of Virginia.
Williamsburg – $458,850
Richmond – $535,900
Hampton – $458,850
Newport News – $458,850
Portsmouth – $458,850
Suffolk – $458,850
Chesapeake – $458,850
Norfolk – $458,850
Virginia Beach – $458,850
Bottom line is that if you have a higher loan amount than these loan limits then its kicked over to classification “Jumbo or Non-Conforming” status which is usually more stricter mortgage guidelines and higher rates normally.
FHA Co-Signers & Co-Borrowers Continued 411
This post is a continuation post from FHA First Time Home Buyer Cosigner Kiddie Condo Loan
Most people refer to this loan as the Kiddie Condo Loan because the main concept was to help your children with buying a first house or help out with the housing while your children are gone for college.
Well interestingly enough this guideline also serves another purpose.
Co-Signer / Co-Borrower to help with Income and Debt-To-Income Ratios
I had a client that was having trouble getting FHA approved for his new home purchase. He tried 3 different ways and the 3rd time he finally got approved and here’s how.
1st Time – My client Mr. Livingston was applying for a standard FHA loan, all seemed pretty normal until his Federal Student Loans came up in the Debt-to-income guideline. Mr. Livingston had about 10 outstanding Federal Student Loans. Now normally the student loans will not be counted towards the client’s ratios if the Student Loans were “Deferred Payments”.
When I questioned Mr. Livingston if the Student Loans were deferred, he told me they were but there was 1 problem. The deferrment period was every 6 months instead of every 12 months. Within guidelines we had to count the Student Loans as debt and therefore made Mr. Livingston’s Debt-To-Income too high.
2nd Time (The Family Co-Signer / Co-Borrower) – This time we utilized the Non-Occupying Co-Borrower / Co- Signer of Mr. Livingston’s Father. Per FHA guidelines we don’t have to have the Parent’s to move in this house as the primary residence, they could just help by co-signing for income purposes.
Normally this would work out great! Unfortunately for Mr. Livingston’s situation, his Father actually brought on more debt that didn’t help much on the ratios, even though we were adding more income we still have to include the Father’s debt too.
3rd Time (The Long-Time Friend) – This is very powerful not only is the Co-Signer and Co-Borrower only limited to Family Members, per FHA guidelines you can add Friends too! Mr. Livingston had a life-long friend who agreed to co-sign and help out Mr. Livingston (what a great friend) this time around it worked, the ratios were good and debts were good.
Now the Friend does have the Debt included in his credit report now as a Real Estate Mortgage he owes on. So now if he wants to buy a house, he has to keep in mind to get removed from this loan by Refinancing Out from the loan.
VA Mortgage Cash Out Refinance 100%
Veterans’ Benefits Improvement Act of 2008 Changes recently signed by President Bush on 10/10/2008 implement 4 major changes below.
The official Bill Circular is found HERE
1.) Mortgage Loans allow Cash Out Refinances to 100% changed from 90%.
2.) The VA ARMs (Adjustable Rate Mortgages) are good through 2012.
3.) The Temporary Extended Loan Limit Amounts are extended through Dec 31st 2011
4.) Guaranty of refinances from $36,000 to the same guaranty for purchase deals.
- Buyers to get with the Contractors after an appraisal is done to lend “LABOR” to compensate for “Credit” towards down-payment.
- Buyers to paint the house or do some side jobs to help earn “Credit” for the “Labor”
- The Sellers will pay for the credit and can raise the sales price in order to compensate for the credit.