Fannie Mae is Changing their Underwriting Guidelines

Mortgage and Lending with The Mortgage Experts at America's Mortgage, a Division of Cherry Creek Mortgage Co. NMLS #241555
Fannie Mae just announced some changes to their underwriting guidelines.  Here are a few of the most note-worthy:
  • The maximum loan-to-value (LTV) and combined loan-to-value (CLTV) ratios for adjustable rate mortgages (ARMs) is being lowered from 97% to 90% for 1-unit, primary residences for purchase and no cash-out refinances.  This means you will need 10% down if you're buying a house and financing it with an ARM.  The ratios are being lowered even more for other types of transactions.
  • They are eliminating exterior-only appraisals and property inspections.  This means only full, interior appraisals will be allowed.  No more "drive-by" appraisals.
  • They are raising the minimum credit score for ARM loans from 620 to 640.
These changes will take effect in October 2012, but lenders are free to implement the changes earlier than that if they want to.
So things just got a little bit stricter.  The message?  The government, which now runs Fannie Mae, Freddie Mac, FHA, and VA - the four places where just about all mortgages end up - is not fooling around with foreclosures.  They want to stop them. 
Getting a loan approved is easy - if you know what to do.  The Mortgage Experts know what to do!!!
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By the way, don't forget to refinance your current mortgage.  Rates are very, very low right now.  Don't miss out!  Call us today to get the details for your particular situation.


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Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

I do think we need less risky loans and the buyer should have some skin in the game.

Jul 16, 2012 02:34 AM #1
Randy Ostrander
Lake and Lodge Realty LLC - Big Rapids, MI
Real Estate Broker, Serving Big Rapids and West Central MI

Good afternoon Chris. Seems like every step forward we take we go back two. In our area we are having a tough time with the 620 scores and this will only set us back further. Hard to argue needing to make better loans but it comes at a cost.

Jul 16, 2012 03:39 AM #2
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