San Mateo Mortgage Blog » FHA

2010 FHA Loan Limits for San Mateo County

Chris Williamson — Mon, 01 Mar 2010 14:00:26 +0000

HUD recently released FHA loan limits for 2010. In virtually all California counties, loan limits remained the same as 2009. Great news for San Mateo home buyers, the single unit limit will not roll back to $625,000 as once thought.

2010 FHA Loan Limits for San Mateo County

Loan Limit	# of Units
$729,750	1 Unit
$934,200	2 Units
$1,129,250	3 Units
$1,403,400	4 Units

What about other Bay Area Counties? 2010 FHA Loan Limits for…

Santa Clara County, San Francisco County, Santa Cruz County, Napa County, Marin County, Alameda County, Contra Costa County, Monterey County, San Benito County

These counties have the same loan limits as San Mateo County which are:

Loan Limit	# of Units
$729,750	1 Unit
$934,200	2 Units
$1,129,250	3 Units
$1,403,400	4 Units

Solano County

Loan Limit	# of Units
$557,500	1 Unit
$713,700	2 Units
$862,700	3 Units
$1,072,150	4 Units

Sonoma County

Loan Limit	# of Units
$662,500	1 Unit
$848,100	2 Units
$1,025,200	3 Units
$1,274,050	4 Units

What is an FHA Loan?

An FHA Loan is a mortgage loan insured by the Federal Government against default. Because they are backed by the Federal Government, lenders will accept lower standards than for a conventional loan because they are protected to some degree from the borrower’s default.

Main Benefits of an FHA Mortgage Loan

The main benefits of a San Mateo FHA loan today are:

Only 3.5% down payment required
Lower credit requirements than most programs making it easier to qualify
Easier to accept gift funds from family
Allows seller credits towards closing costs
Not just for San Mateo first time home buyers – anyone can qualify

Need an FHA Loan?

Call me at (650) 520-0915 or email me at info@SanMateoMortgageBlog.com to schedule a no obligation consultation. I’ll help you determine whether or not an FHA loan is right for your San Mateo home purchase. If not, we’ll look at other programs and how they may benefit you more.

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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.

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FHA Announces Increased Upfront Mortgage Insurance for April 2010

Chris Williamson — Mon, 25 Jan 2010 13:30:49 +0000

The Mortgage Industry is an Ever Changing Industry

As I always preach, the mortgage industry is a constantly evolving industry. It seems like every day we get new regulations, new disclosure requirements and new guidelines. The newest batch comes from The Department of Housing (HUD) in the form of changes to FHA financing.

New FHA Financing Rules for San Mateo Borrowers

In an effort to strengthen FHA’s capital reserve and to manage their risk while continuing to support the nation’s housing market recovery, FHA’s Commissioner David Stevens announced the following policy changes that will affect all San Mateo FHA borrowers.

For all FHA loans with case numbers that are assigned April 5, 2010 or later, FHA has increased their upfront mortgage insurance premium for purchases and non-streamline refinances from 1.75% to 2.25% of the base loan amount. For FHA to FHA streamline refinances, the increase is from 1.5% to 2.25%. Most San Mateo borrowers finance this upfront mortgage insurance premium with their loan amount, but you do have the option to pay this as a closing cost.

More Changes for San Mateo FHA Loans Scheduled for Later in 2010

Other announced changes that will take place later in the year are:

Seller contributions towards a San Mateo home buyer’s closings costs have been reduced from 6% of the purchase price down to 3% of the purchase price. This means that a borrower will have to put more of their own skin into the game on top of their 3.5% down payment
IF you want to put the minimum 3.5% down on your home purchase, you must have a credit score over 580. If you are 580 or below, you will be required to put 10% down on your purchase.

Considering an FHA Loan? Get it While Today’s Guidelines are Still in Place

With these impending changes coming soon to an FHA purchase near you, give me a call at (650) 520-0915 or send me an email at info@SanMateoMortgageBlog.com and let’s see if we can get a jump on your FHA financing while the current guidelines are in place.

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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.

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Temporary Changes to Financing a Condo with an FHA Loan

Chris Williamson — Wed, 16 Dec 2009 01:00:20 +0000

As the ever changing lending world keeps turning and churning out new changes and regulations, we’ve got the latest updates on FHA financing for San Mateo condos. The Dept. of Housing (HUD) has announced a temporary change to their FHA condo financing policy that took effect December 7,2009 and will expire December 31,2010.

The Biggest Changes for Financing a San Mateo Condo with FHA

“Spot Loan” Approval Process

HUD stated in their November 6, 2009 mortgage letter they would be eliminating spot approvals for San Mateo condos as of December 7, 2009, which has now been extended to February 1, 2010. Spot approvals are required by lenders for complexes that are not on the FHA or HUD condominium approval list. This means that we can currently approve one specific unit in an unapproved complex.

On February 1, 2010 the new regulations will eliminate the practice of spot approvals. After February 1, 2010, we will no longer be able to just approve one San Mateo condo; we will have to approve the entire complex. This translates to more time and more paperwork to get a San Mateo condo approved when the complex is not on the HUD or FHA approved condominium list. The complex approval can add additional weeks to your transaction and there are no guarantees the complex will even be approved.

FHA Concentration Requirements

One positive for San Mateo borrowers in the new condo financing regulations are an increase in the allowed percentage of units encumbered by FHA loans in a particular complex from 30% to 50%. If a condo complex has four or more units, only 50% of the units can have an FHA loan. However in the temporary guidelines this percentage can be increased to 100% concentration of FHA loans in a complex if:

The complex is 100% complete and construction has been completed for at least 1 year.
100% of the units have been sold and no entity owns more than 10% of the units ( for 10 or fewer units an investor may own no more than 1 unit)
The project’s budget provides for the funding of replacement reserves for capital expenditures and deferred maintenance in an account representing at least 10% of the budget
Control of the Homeowner’s Association has transferred to the owners
The owner-occupancy ratio is at least 50%

Owner-Occupancy Requirement

At least 50% of the units in a project must be owner-occupied or sold to owners who intend to occupy the units. For under construction or projects still in their initial marketing period, FHA will allow a minimum of 50% owner occupancy for the number of presold units. Vacant or tenant-occupied foreclosures do not count in this number.

Pre-Sale Requirements

For new construction, the pre-sale requirement will be temporarily reduced to 30%, down from 50%, meaning 30% of the units must be sold before HUD will lend on the property.

Considering Buying a Condo in San Mateo?

To help San Mateo home buyers make sense of all of the condo financing new rules and regulations, I’ll be presenting a seminar with Raymond Stoklosa, Broker at The RayChel Realty Group in San Mateo to discuss the new condo financing rules, the pros and cons of buying a condo and what you can do to protect yourself. This program will be presented in San Mateo.

I’ll also be presenting a webinar that discusses the new condo financing rules and guidelines. This program will be presented online and can be accessed through any computer with an internet connection.

Sign Up Info for Upcoming Classes and Webinars

For sign up information and dates all of our upcoming home buyer education workshops and webinars, check our Class Schedule page or click the Sign Up button below.

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Using FHA Financing to Finance a San Mateo Condo? Get Your Lender Involved Early

Chris Williamson — Wed, 14 Oct 2009 22:17:10 +0000

I always preach when it comes to the home buying process, you need to get your loan professional involved early. This becomes even more critical when you usnig FHA financing to buy a townhome or condo in San Mateo County. Why? The complex you chose may not be FHA approved. FHA and HUD have their own list of approved condo complexes for San Mateo County. If your complex is not on the list, your lender has some work to do.

San Mateo County Condo Not on the FHA Approved List?

If your complex does not show on the FHA approved list the lender will have to do a spot approval. The spot approval is not only for your unit alone, but for the entire complex.

Requirements for Complex Approval

Here are the requirements for complex spot approval:

Condominium complex must consist of 2 or more units.
No more than 25% of the complex can be used for commercial purposes.
No more than 10% of the units may be owned by one investor.
No more than 15% of the total units can be delinquent in their HOA dues.
At least 50% of the total units must be sold.
At least 50% must be owner occupied.
For projects with 3 or less units, no more than 1 unit can be encumbered by FHA financing. Projects of 4 or more units will have no more than 30% of the total units encumbered by FHA Financing.
The reserve study must be no more than 12 months old and must show the project is at least 60% funded.

Work With a Mortgage Professional Who Understands FHA Condo Requirements

Using an FHA home loan to finance your San Mateo County condominium does have its advantages, but you need to make sure you are working with a San Mateo mortgage professional that understands the FHA condo requirements. If a lender needs to perform a spot approval, it can add an additional 2 to 4 weeks to the loan process. Remember, always get your loan professional involved early.

Financing a Condo in San Mateo County?

If you plan to finance a condominium in San Mateo County at some point in your future, give me a call at (650) 520-0915 or email me at info[@]SanMateoMortgageBlog.com for a free, no obligation consultation. We’ll take a look at your financial situation and help you determine which loan program is right for you.

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2009 FHA Loan Limits in San Mateo County

Chris Williamson — Fri, 25 Sep 2009 22:44:46 +0000

What is an FHA loan?

For those of you who don’t know what an FHA loan is, it is a loan insured against default by the Federal Housing Administration (FHA). FHA insures the lender against default by the borrower, which means FHA will pay the lender back should you default. This insurance encourages lenders to make larger loan amounts to more people since the risk for them is very low.

What are the Main Benefits of an FHA Loan?

The main benefits to an FHA loan are:

Low down payment (3.5%) required
Easier to use gift funds for down payment
Easier to qualify
Credit requirements lower than most programs

Is FHA Financing Only for First Time Buyers?

No. Almost anyone can qualify. There are not any income requirements, but there are limits on the loan amounts. You need to have decent credit to qualify, but it doesn’t have to be great.

What are the 2009 FHA Loan Limits in San Mateo County?

In high cost areas, which include San Mateo and Santa Clara County, the most money you can borrow with an FHA mortgage loan are:

Units	Max Loan Amount
1	$729,750
2	$934,200
3	$1,129,250
4	$1,403,400

These are temporary increased figures and may go back down at the end of 2009.

Why You May Decide Against an FHA Loan?

If you need to borrow more than the loan limits, FHA won’t work for you. If you have more than 3.5% available for a down payment, you’ll likely be able to find better financing options provided you have good credit. Also, FHA requires an upfront mortgage insurance premium, which is 1.75% of the loan amount ($12,770.63 for a loan amount of $729,750). This upfront premium can be paid upfront, negotiated and paid for by the seller or you can finance this into the loan. You will also have a monthly mortgage insurance payment on top of your principal and interest payment.

Considering an FHA Loan?

We’ll sit down with you and review your financial goals to determine whether or not an FHA loan is the best option for you. Call us at (650) 520-0915 or send us an email at info[@]SanMateoMortgageBlog.com to schedule a free, no obligation consultation.

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FHA Streamline Refinance Guidelines Changing in 2010

Chris Williamson — Wed, 23 Sep 2009 01:10:01 +0000

New FHA Guidelines for Streamline Refinance in 2010

Under today’s 2009 FHA streamline refinance guidelines, homeowners with FHA mortgage loans are able to lower their monthly mortgage payment when FHA reduces the interest rate. Today’s guidelines allow homeowners to refinance without an appraisal or verifying income and assets with fast turnaround times. Even homeowners with low credit scores and no jobs are eligible. FHA figured since they were insuring the mortgages to begin with, helping homeowners lower their monthly mortgage payment which in turn should lower their risk of foreclosure.

What’s Changing with FHA Streamline Refinances in 2010?

In a letter from The Office of Housing and Urban Development dated September 18, 2009, the guidelines for 2010 FHA streamline refinances, effective January 1, 2010, are changing drastically. The biggest changes to the FHA streamline refinance are:

FHA homeowners must be employed when they submit their FHA streamline refinance loan application
FHA homeowners will be required to verify assets needed at closing
FHA homeowners must have a full appraisal done in order to add “roll-in” closing costs to the refinance
The maximum mortgage amount for a streamline refinances without an appraisal cannot exceed the outstanding principal balance and the new upfront mortgage insurance premium
For streamline refinances with an appraisal, discount points (buying down the interest rate) can no longer be rolled into the new mortgage

2009 Streamline Refinance vs. 2010 Streamline Refinance

2009 Streamline	2010 Streamline
No appraisal	Appraisal is recommended
No maximum loan-to-value	Max loan-to-value to 97.75%
No asset verification	Assets verified
No income verification	Income verified
Low credit scores ok	Higher credit scores required
Quick closings	No quick closings

What Does this Mean to a San Mateo Homeowner with an FHA Loan?

If you currently have an FHA loan, you should explore whether or not it would be beneficial for you to do a streamline refinance in 2009 before the guidelines change. Start this as soon as possible to make sure you can take advantage of the 2009 FHA streamline refinance guidelines.

How Do I Determine Whether or Not I Would Benefit?

With some basic information about your FHA loan, we’ll be able to help you determine whether or not you’d benefit from a 2009 FHA Streamline Refinance. If you won’t benefit, we’ll tell you. Then, we’ll put your information into our loan analysis software and when we can help you, we’ll call you. No need for you to monitor the San Mateo mortgage market.

Need an FHA Streamline Refinance Before the Rules Change?

Are you a California homeowner with an FHA home loan? Give me a call at (650) 520-0915, send me an email at info@SanMateoMortgageBlog.com with your loan information and we’ll tell you if you can save money with a 2009 FHA Streamline Refinance. Alternatively, you can submit your information through our secure online mortgage application. We’ll analyze your loan situation and call you with some answers.

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Maximum Allowed Debt Ratios for San Mateo Mortgage Loans

Chris Williamson — Thu, 03 Sep 2009 21:33:32 +0000

Debt ratios are a percentage of your continuing debt compared to your gross monthly income. Continuing debt would include a car payment, student loans, monthly credit card payments or any other type of debt that will carry over with you and continue with your new San Mateo County home purchase. This does not include utilities or other types of living expenses. Your debt ratio is one of the components a lender will use to determine how much home you can afford and determine their risk in giving you a loan to buy a home in San Mateo County.

What is Your Front End Ratio?

Your front end ratio takes your total house payment, including your monthly tax and insurance payment divided by your monthly gross income. For example, say your San Mateo mortgage payment including taxes and insurance is $3,000 and your gross monthly income is $10,000, your “front end ratio” is 30%.

What is Your Back End Ratio?

Your back end ratio includes your housing ratio plus any other debt listed on your credit report, divided by your gross monthly income. For example, say you have a $3,000 monthly mortgage payment, a $350/month car payment, a $250/month student loan payment and a $100/month credit card payment with a gross monthly income is $10,000. Your total debt per month is $3,700 and your back end ratio is $3,700/$10,000 = 37%

How Does My Debt Ratio Affect How Much I Can Afford?

Each lender and loan program has different guidelines for debt ratios and they are just that…guidelines. There are no hard and fast rules as your assets, down payment and income all could compensate and offset a higher than normal debt ratio.

What is the Maximum Debt Ratio Allowed?

To give you an idea of the lender’s guidelines, the following debt ratios are considered reasonable:

Loan Type	Front End	Back End
Conventional	28%	36%
FHA	31%	43%

Although these are posted guidelines by Fannie Mae, Freddie Mac and FHA, these ratios can be pushed as high as 55% on the backend with compensating factors.

There is Only One Way to Know What You’re Qualified to Borrow

Get pre-approved. Come in and sit down with us, call us on the phone at (650) 520-0915, or send us an email at info[@]SanMateoMortgageBlog.com. We’ll gather all of the necessary information, present loan programs that meet your short and long term financial goals and give you a genuine pre-approval, which will explain exactly how much you can afford in today’s lending market.

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9 Questions to Ask When Financing a Condo with FHA

Chris Williamson — Tue, 18 Aug 2009 22:16:11 +0000

Financing a condo with FHA financing in today’s San Mateo County real estate market is getting more difficult. With FHA lenders tightening their guidelines, borrowers are required to jump through more hoops to buy a condo in San Mateo County. Not only must the borrower be pre-approved and qualified to the lender’s satisfaction, but the complex will be scrutinized as well. Lenders want to make sure the complex is financially sound and has the reserves to make any necessary repairs and do any required maintenance. With the rash of foreclosures in the market, lenders want to make sure they have sufficient collateral to offset their investment.

Which Questions Should Be Asked when Buying a San Mateo County Condo?

We suggest to the San Mateo County Realtors and clients we work with ask the following 9 questions early in the home buying process to avoid any unexpected surprises along the way.

Is the complex FHA approved? You can find out by entering the complex information into HUD’s form. If it is not FHA approved, it doesn’t mean you won’t get the loan. It does require a “spot approval” which requires some extra time.
What has sold in the complex recently? How does it compare to this unit? San Mateo County appraisals are now more thoroughly reviewed and may require two independent reviews.
Is the complex in a flood zone?
Have there been any special assessments in the last three years?
Are there major maintenance or improvement projects anticipated in the next 12 months?
Are there sufficient reserves to cover those expenses?
Is the HOA involved in any lawsuits?
Are at least 85% of the units current on their HOA dues?
Are the buyers aware that “walls-in” insurance is now required by all lenders in addition to the policy the HOA should have on the structure?

Why Ask Why?

These are the same questions the lender will ask, so why not be proactive and learn the answers before too much time, energy, effort and even money is invested in the transaction? Red flags are best addressed from the get go. If ultimately the lender will not make you the loan, why even make an offer? Why not spend the time finding a property that will be approved?

Considering a San Mateo County Condo?

If you are considering purchasing a condo in San Mateo County, contact me today for a free, no obligation consultation. We’ll go over what you can afford and help you put your financial house in order. We can even recommend several great Realtors we’ve worked with that will do a great job finding you a San Mateo County home.

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Mortgage Myth Busted: I Must Have Steller Credit to Buy a Home

Chris Williamson — Mon, 29 Jun 2009 21:19:09 +0000

Many people think they need to have stellar credit and no debt in order to get a home loan. That’s just simply not true. Different loan programs have different credit score qualifications. Some programs will accept credit scores as low as 580. For those of you who haven’t established credit, or don’t have an extensive credit history, other programs will even allow you to use alternative credit (rental history, utility bill history, etc) to qualify.

How Often Should I Check My Credit?

We recommend you check your credit score yearly. You can do this for free by going to www.AnnualCreditReport.com. At this site you can run your own credit report with each of the three credit reporting bureaus. Although the report will not be as detailed as our report because our report pulls a more thorough history, you will get a sense of where your credit is and if there are any errors. Running your credit at this site once per year will not affect your credit score and is a good way to keep tabs on your credit history.

What Should I Avoid When Thinking About Buying a Home?

Remember, even though you don’t need perfect credit to get a home loan, you should avoid large purchases like cars before and during the home buying process because large purchases may have a negative impact on your ability to qualify for a home loan.

Free Report: How Does Your Credit Affect You as a Home Buyer?

For our free 5 page report on your credit and how it affects you as a home buyer, please fill out the form below and it will be sent to your email immediately.

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Have Questions About Your Credit?

To discuss your credit score and its impact on your home purchase in further detail, please send me an email or give me a call at (650) 520-0915.

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Mortgage Myth Busted: I Don’t Have 20% to Put Down So I Can’t Buy Now

Chris Williamson — Mon, 22 Jun 2009 19:21:39 +0000

In the past, lenders have required at least 20% down payment on a home loan. However, new financing programs only require you to put 3% down, or even 0% down in certain geographical areas of the Peninsula. (For a $300,000 home, a 3% down payment is $9,000.)

How Can I Buy With No Money Out of My Own Pocket?

Certain programs allow your down payment and closing costs to be a gift. This means if Mom or Dad, or other family members are willing to put up the money for your down payment and closing costs, you could potentially come to the closing table with none of your own money. As long as you can qualify for the loan and can make the monthly payments, gift money is ok.

What if I Don’t Have Any Family Members Willing to Give Me Money to Buy a Home?

As a first time home buyer, if you purchase a home before December 1, 2009, you qualify for an $8,000 tax credit from the federal government, which may now be used towards closing costs. Also, with certain loan programs, sellers are allowed to contribute up to 6% of the purchase price towards closing costs as well. Plus, if you buy a new home, you may be eligible for California’s $10,000 tax credit in addition to the federal income tax credit.

I’ve Heard You Need Cash Reserves to Qualify

Not always. Certain loan programs do not require cash reserves. Before, lenders required you had a few months cash reserves in the bank so you could still make your mortgage payment if you lost your job. Now, there are programs available that will allow you to spend every last penny in your bank account in order to close the loan, although we don’t recommend you do that.

How Can I Find Out How Much I Can Afford?

To find out how much you can afford, send us an email or give us a call at (650) 520-0915. We’ll evaluate your financial situation and show you what you can afford with no obligation or commitment.

Ready to apply now? Check out our secure online mortgage application.

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