Starting Jan 1, 2010 Fannie and Freddie will no longer purchase loans with a DTI over 45%. This means that even with a huge downpayment, excellent credit and any other positive factors will no longer be considered. So once again the lending window will close for millions of qualified borrowers. Where this really will impact is on someone that wants to purchase a home and hasn't sold their current home but has it on the market for sale. I have many people that are doing just that and FNMA understands what they are trying to do. No longer. Also if people want to turn the primary into a rental property because the market is down and don't want to sell that will become much harder. Lenders because of the GSE'S are not allowed to count and rental income unless you have 25% equity. This means if you have a 50 DTI on paper because you don't have enough equity you will not be buying that new home. Lenders were expected to begin the new rules in mid Jan but BOA announced today their cutoff is December 11th 2009. Please contact me NOW if you are planning a purchase so we can help provide you all the information before it's too late.
Thanks,
Brent
Maximum DTI
• Maximum DTI lowered to 45%, with flexibilities offered up to 50% (as approved by DU)
Minimum credit score requirement
• Minimum credit score increased from 580 to 620
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