Conventional Mortgage Insurance Begins to Make a Comeback

Over the last few months, some conventional Mortgage Insurance companies have loosened up on their underwriting guidelines.  This comes after nearly 3 years of pulling back and the tightening of those guidelines.

Starting November 1st, one MI company has expanded its 97% LTV program.  This new maximum LTV is currently limited to first time home buyers only.  Eligibility varies by zip code based on its status as a declining market.  Metro Atlanta is still limited to a 95% LTV at this time. 

For Second Homes, purchases and rate/term refinances are back up 90% LTV.  MI for Investment properties is still not available at this time. 

Each MI company does have lowered maximum debt to income ratios and increased minimum credit scores from what we saw on 2007 and before.  For the last 3 years, FHA has substantially increased its market share as conventional MI became more difficult to obtain.  For the policies that they have been issuing, the performance of those loans must be doing better for them to begin to expand eligibility once again.