All Forum Posts by: Alan Lacey

No need to guess fnma makes guidelines available to everyone. 

https://selling-guide.fanniemae.com/Selling-Guide/Originatio...

The “Do It Yourself” option is available for renovations made to one-unit properties by the borrower. This option is not available for manufactured homes. “Do It Yourself” renovations may not represent more than 10% of the “as completed” value of the property. The lender must review and approve the renovations in advance, and must inspect the completion of all items that cost more than $5,000.

A borrower may request reimbursement for their payments for the cost of materials or for the cost of properly documented contract labor, but not for the cost of their sweat equity (labor). When a borrower chooses this option, the lender must fully budget for the cost of labor and materials related to the renovation so that, should the borrower be unable to complete the work, a contractor can be hired to finish any of the “Do It Yourself” repairs.

there is no cap at a 70 ltv. Does your initial LE show that loan was locked? If it wasn’t then that is something that should have been noted when they disclosed, and my guess is  they are trying to get closer to the terms on the LE by going to a 70 ltv as that has fewer price adjustments. Fannie publishes what they charge to price in adjustments based on different loan factors if you google fnma llpa it will come up. 

The only other reasons I could think of is 1. If going to 75 ltv and additional price adjusters were just enough to make it the loan exceed fnma points  and fees test so they have to limit to 70 to meet that requirement. 2 It was a Dti issue and they couldn’t approve you for a higher loan, but presume if that was the case they would have mentioned either reason before.

Your issue at moment is that higher note rates are not paying additional premium to lenders to allow for as many no point and low cost options as in the past and no immediate expectation that will change. So if you are taking about a Fannie/Freddie loan with substantial loan level price adjusters due to credit score, ltv or occupancy type that could be a factor as could size of the loan as well. Always compare lenders but it is a common theme particularly in last month or so.

I wouldn’t get caught up in what is going to interest. You can pay more than minimum in payment on the heloc and unless you are Ina really short amortization half your payment will not go to principal.

Also heloc or fixed second is not likely to impact ltv being 80 or 90. Main consideration is rates. Heloc advantage is that if prime goes down over next few years your rate will drop without refinancing, and you only have to borrow and pay interest on what you need when you need it unlike fixed second where you take out full amount at close.

The reason for most lenders rules is simply the Fannie/ Freddie lending guidelines.

If they do not occupy the home I. Most states seller disclosures are not required to be completed, or limits liability from how they answer. If it doesn’t indicate that they don’t have to answer the. It should be completed fully. 

They issue that it is not a long term rental to use short term rental ( which is anything less than Annual) they need to see history. Otherwise in first year they would let you use 75% of  lease agreement. You could ask if they will let you use rental income from rent schedule from appraisal as that maybe allowed with in the first year. However typically only see that used when purchasing property as a rental not one being used as rental already.Most CU’s are originating Fannie Freddie loans so I personally dont understand people making big deal about local CU or banks unless you are doing a portfolio or commercial loan product. Best of luck.

If you are doing conventional delayed financing you can not take out more than you invested. If free and clear you can wait 6 months and then just do a cash out refi however.

There isn’t much you can do, just prime rising like every one else just need for inflation to cool or a recession to happen to see it come back down and first mortgage rates drop. Otherwise it is shopping around for whomever can offer you a fixed rate and then having to refinance that when rates eventually come back down. Probably best bet is to ride it out if you are below 9 so you can have the i/o option.