Looser Loan Guidelines and ALT Programs

A theme that is picking up steam recently is the easing of credit/underwriting guidelines and the emergence of new loan products. This is tracked in part by the index below and something concrete we see over time here in the office. Broadly, conventional, FHA and Jumbo loans are becoming more accommodative with various guidelines that may benefit some of your client scenarios this year.  In fact, HUD announced this morning the lowering of the FHA mortgage insurance rate by .25%, which takes a bite out of the recent rate increase for FHA borrowers.
There is also a new segment of ALT (alternative) Jumbo products now available for your clients with credit issues or that do not report much of their income on their income taxes for whatever reason.  Moderate to major credit events are allowed with limited seasoning requirements, deposits into bank accounts can be used for qualifying income, and sizable financial assets represent cash flow for qualifying income.

How Little Down for How Big a Purchase?

Let's face it unless someone is selling a house with lots of equity for an up-leg purchase, making a sizable down payment may not be an option. The government has long recognized that accumulating a down payment is the primary barrier to homeownership and has developed loan programs with lower down payment requirements to make owning possible for more people. With the recent announcement of higher loan limits for Conventional, FHA and VA loan programs let's review how much house can be had for how little upfront cash.  Here's a cheat sheet.



Structuring financing around your specific scenario and goals can have an enormous impact on your real estate investment experience and results. I encourage you to start working on your financing early on for greater clarity and confidence.