Conventional – High Balance and Conforming
Who are our Conventional – High Balance / Conforming Loans Best Suited For
Conventional loans are typically geared towards borrowers with more robust Credit / Income / Asset profiles. Conventional loan borrowers are held to a higher qualification standard.
How Conventional – High Balance and Conforming Loans Work
These loans are secured by Fannie Mae and Freddie Mac. Currently these institutions are Government entities that provide all the Conventional loan programs. These loans are typically secured by borrowers with better credit / income / asset profiles. Conventional loans are recognized as superior loans for more qualified borrowers. geared for A paper borrower. Approvals are generated by an Automated Underwriting System “AUS” called (DU or LP). As a lender we run your loan file through the system and the “AUS” and a DU or LP approval is generated. As a lender we make sure to satisfy all conditions called for by the AUS.
Program Highlights for Conventional – High Balance and Conforming Loans
- Conventional High Balance Loan Limit $765,600.00 for an SFR. Loan limits are higher for 2-4 Units
- Conventional Conforming Loan Limit $510,400.00 for an SFR. Loan Limits higher for 2-4 Units
- Maximum Loan to Value is 97%. On a High Balance 97% LTV is limited to Home Ready Loan. Home Ready Loans have Income restrictions. Typically, on High Balance loans 95% is Max Financing
- Mortgage Insurance is required for any loans over 80% LTV. This is not government insurance. This Insurance is Private Mortgage Insurance provided by third party companies. We as the lender will shop for the best Mortgage Insurance providers for your loan.
- To qualify it must be Full Documentation ONLY. We require Tax Returns / Pay Stubs and Bank Statements
- Freddie Mac does offer a 1-year tax Return Program. For this Program you must be Self Employed for at least 5 years
- A minimum credit score of 620 is required for High Balance and Conforming loans.
- Max DTI ranges between 43% - 47%. In some cases, we have seen higher DTI’s get approved. All approvals are generated through an Automated Underwriting system called DU (Desktop Underwriter) for Fannie Mae loans and LP (Loan Prospector) for Freddie Mac Loans
- There is no reserve requirement on Owner Occupied purchases or refinances however it does help. There are reserve requirements on Investment properties.
- This program is eligible for Purchase transactions or Refinance Rate and Term or Cash Out. Unlimited Cash Out options are available. Maximum LTV on a SFR Cash Out is 80%. LTV’s range based on Occupancy and Home type.
- The occupancy is limited to Primary Residence, Second Home and Investment properties are eligible on this program
- Single Family Homes, Condominiums and 2- 4 Unit homes are all eligible for financing. If you are financing a 2-4 unit home the borrower must occupy one of the units. Financing for 2-4 Unit Investment properties is eligible as well
- Non-Occupying Co Borrowers may be used to Qualify
- First Time Home Buyers are Eligible
- Delayed Financing options are available
- 30 Year Fixed, 15 Year Fixed, 5/7/10 year ARM – Available