New Jumbo Light Loans Now Available

Ok we have been talking about it for several weeks here are the guidelines for the new jumbo light loans. These are the loans that have been created from raising the maximum purchase limit from Fannie Mae and Freddie Mac. Th old limit was 417K now it can go
as high as 729K. The bad news is if you live in metro Denver and the surrounding suburbs there was no raise permitted. That’s right Fannie Mae and Freddie Mac are keeping the conforming loan limit to 417K. There are a few spots in Colorado like Boulder that will be
seeing an increase, but for the vast majority of us nothing has changed. There are plenty of guidelines that go along with these new jumbo light loans. I have re-printed all the details from Matt Carter’s article in Inman news below.

“Fannie Mae will start buying the new “jumbo light” loans of up to $729,750 from lenders on April 1. Loans originated after March 1 are eligible for delivery to Fannie.

The government-sponsored mortgage repurchaser will start with 15- and 30-year fixed rate jumbo light mortgages, and then dive into 5/1 ARM loans on May 1.

So what will borrowers have to bring to the table? According to the product matrix, the smallest down payment on the fixed-rate loans will be 10 percent — and you’ll need a FICO score of 700 to put down anything less than 20 percent. Fannie is not interested in buying any jumbo lights made to borrowers with FICO scores of less than 660. Full documentation, FICO score, and a maximum debt-to-income ratio of 45 percent are required.

Not eligible: reverse mortgages, second liens, streamlined refinance or purchase loans, or cash-out refinances.

The requirements are even stricter for ARM loans — nothing less than a 20 percent minimum down payment will do. And those down payment requirements are only for owner occupied homes. Buying a second home or investment property? You need a 40 percent down payment to qualify, and please, no more than four loans financed per customer!”

The loan level price adjustments are 0.25 percent for fixed rate loans and 0.75 percent on ARM loans, and all the other price adjustments Fannie has in force apply — plus those pesky adverse markets delivery charges in areas experiencing price declines.

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