FHFA bringing Back add-ons to conforming loans, AGAIN

By
Mortgage and Lending with HomeBridge Financial Services (NJ) NMLS 248937

Happy New year from the Federal Housing Finance Agency.

In Early 2021 FHFA tossed in new Loan Level Price adjustments (add ons) that we had never seen before for both Vacation homes and for Investment property. Last September they dropped the add-ons and they are back again for 2022, just on a slightly different scale.

The Biggest moves will be for a Vacation/Second Home with an additional 1.125-4.125 points being added for loans up to the conforming limit of $647,200

The add on will depend on Down payment, With 10% or 15% down it will be at the max 4.125 points, and will drop to 3.375points with 20% down 

Effectively with the way the buy up/down for rates is it will be near impossible to do a zero point loan for a vacation home. for a 20% down $647,200 loan it will cost an additional $21,836 to buy the home in add ons.

In addition there will be significant adjustments for all High Balance loans between 647,201- $970,800 of 0.5-1.75 points depending on the LTV and the purpose of the loan. in dollars and cents, that could be almost $17,000 additional cost on the high end for a high balance cash out refinance

This will be effective for loans being delivered to Fannie and Freddie as of 4/1/2022 so the pricing will go into effect for loans closing after Mid March to allow for the delivery times.  DO NOT let rates expire, these add-ons are significant and lenders will not be able waive them since they are required by FHFA

There is talk that these new adjustors may help lower other loan level price adjustments for first time buyers and for borrowers facing higher fees due to down payment or lower credit scores, but that has not been formally announced as of yet: Stay Tuned!

 

Call me for all your residential lending needs!

 

Robert Rauf 
Mortgage Loan Originator NMLS# 248937
http://www.homebridge.com/RobertRauf 
or my blog: http://activerain.com/blogs/rrauf 
Office: (732)908-4868  Cell (732)740-0175 

RRauf@HomeBridge.com 
www.RobertRauf.com
 
 

Since 1987 I have been helping my clients fulfill their dream of home ownership! HomeBridge Financial Services, Formerly REMN, HomeBridge Financial Services is located at 9 Grand Ave, Building 2 Suite A Toms River, NJ 08753. NMLS #6521. New Jersey Licensed Lender and Mortgage Banker #L041053. Visit www.Homebridge.com or www.RobertRauf.com for more information. NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey, Toms River NJ 08753, Toms River NJ 08755, Brick NJ 08723, Brick NJ 08724 Mortgage in Ocean County NJ, Mortgage in Monmouth County NJ, Jackson NJ 08527, Howell NJ 07731, Lacey 08731 08734, Beachwood 08722 Bayville 08721, 

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