New Fannie/Freddie Guidelines Coming May 1, 2023

[Jon Puente]

VERY important factors to consider for home buyers coming soon are the LLPA adjustments coming on Fannie/Freddie Conventional loans.  Here are some things to watch out for - 

1. Credit scores less than 679 with 5% down will be getting a nice decrease in upfront costs for par rates.

2. 720-760 credit scores with 15-20% down will be getting a big upfront cost increase for par rates. 

3. Other factors to include is that Second Homes and Investment properties, using Conventional loans, are typically 1%-1.5% higher than Primary Residence rates, regardless of credit score. You can put as little as 15% down on an investment property and 10% down on a second home, HOWEVER rates/costs become much more advantageous at 70%-75% LTV.

4. PMI on Conventional loans is MUCH less for higher credit scores, so even with 5% down, your PMI might not be as much as you think if you are 740+ credit.

I guess the point is to encourage people to become homeowners regardless of credit score and down payment, and basically level out the playing field from those who have 700+ credit scores with higher down payments.  

I am curious about your thoughts?  

[Jay Hurst]

Quote from @Eric James:

Quote from @Jon Puente:

I guess the point is to encourage people to become homeowners regardless of credit score and down payment, and basically level out the playing field from those who have 700+ credit scores with higher down payments.  

I am curious about your thoughts?  

2008 here we come again. Whenever the government tries to "help" people the exact opposite always happens.

 except it was NOT government subsidized loans that got us into trouble in 2008, it was free market wall street firms buying subprime loans from non-banks.