The good news...FHA Down Payment Assistance Program still makes 100% financing possible!
The other news...MGIC will stop issuing coverage for 100% coverage on My Community, Flex 100 and Freddie's 100% Home Possible programs at the end of March.
Say goodbye to 64% back end ratio zero down financing. This is a bit of a blow. Let's hope that FHA opens up a little bit and goes to zero down.
The other MI companies will likely announce changes in the next couple of weeks.
Eeeesh.
Rich... just curious, why would you think stopping 100% financing with a 64% DTI would be a blow? In reality, if you broke numbers down, do you honestly think people can live like that, no matter how good their credit is? We need to keep in mind, that 64% is before taxes. You take taxes out of that persons income that is being used to qualify them, it doesn't leave them with much. Even though FHA talked about this, I don't see them going 100%. And why you don't see just so-so mortgages getting approved with anything over 50% DTI with a manual underwrite. Why would you expect to see a 60% DTI FHA approval go through the system? My thoughts...?? Fannie and Freddie got greedy.... just my .02.
Jeff, I agree with you about DTI issues, "how high is too high" and I don't expect FHA to loosen up too much. But I do have to admit that a majority of my community mortgages (100%) that I did had back end ratios over 50%, and it is well known that Mycommunity would take up to a 64.9% dti with good credit. While I don't agree with those ratios being safe, it is just another shrinking of the demand pool that is out there which will be another challenge to the market.
Prices are way out of whack, I think we all get it, but even this "pragmatist" is hoping for a miracle solution that will avoid everyones homes being 60% of their former value.
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