Monday, January 26, 2015

FHA Premiums to Drop by Half Percent on Certain FHA Loans

As of today, January 26, 2015, the annual mortgage insurance premium on an FHA 30 year term just got a little more affordable. News of the new MI premiums broke on January 7th and President Obama confirmed this in a speech on housing policy the following day. In reasoning according to The White House press release...
"there’s more work to do: too many creditworthy families who can afford—and want to purchase—a home are shut out of homeownership opportunities due to today’s tight lending market."

There seems to be some mixed sentiment whether or not the reduction is a sound choice for the fiscal health of the FHA loan program which has been in the habit of increasing the rates over the last several years but of course only time will tell. Although I agree it will make a positive impact to the affordability for potential homeowners who are feeling the pinch of rising rents in the Portland Metro Area; the issue of the duration of the MI remains a concerning factor. As that annual mortgage insurance premium will remain in effect for the life of the loan for all loans where the loan to value is 90% or more, under 90% and your MI will cancel after a minimum of 11 years. Of course not everyone purchasing a home is going to commit to a mortgage for 30, or even 15 years, so if your looking to get your foot in the door, it is just that... a means to an end. Do proceed with caution if you're looking to go through with a streamline refinance, if your original loan was originated before June 3, 2013 when the new MI duration went into effect that reduction to the payment will likely be negated under the newer structure.

Other low down financing options such as the VA Loan for qualified Veterans, USDA Rural as eligible, MyCommunity, or Conventional with private mortgage insurance may be a better fit, and a side by side comparison will guide you in choosing the right home loan based on your individual needs and goals. If you would like more information or to apply for any of these loan products contact me today!

Additional Resources:

White House Press Release

HUD Press Release

Mortgagee Letter 2015-01

FHA Loan Limit Lookup

Wednesday, December 24, 2014

2015 VA Loan Limits

According to the latest VA Circular out today the VA maximum guaranty amount (aka VA Loan Limits) will now be based on the One-Unit (single-family residence) limit, as prescribed by the Federal Housing Finance Agency and are now published. We are reminded that only the amounts in the "one-unit column" will apply. A total of 46 counties saw increases this year... three of those being in Washington State which included King, Pierce, and Snohomish County.

Additional Resources:

VA Circular 26-14-39

2015 FHFA Loan Limits

2015 Loan Limits for 46 Counties

VA Loan Limit Historical

Oregon Mortgage ConneXion - VA Loans

Wednesday, October 29, 2014

VA Guarantees its 21 Millionth Home Loan

I thought this was pretty cool so I thought I would pass it along!


October 29, 2014, 12:30:00 PM

VA Guarantees its 21 Millionth Home Loan
Milestone comes during year-long commemoration of 70 years of the GI Bill

WASHINGTON – The Department of Veterans Affairs (VA) announced this month that it has guaranteed 21 million home loans since the Home Loan Guaranty program was established in 1944 as part of the original Servicemen’s Readjustment Act of 1944, better known as the “GI Bill.” This achievement comes during the year-long commemoration of 70 years of the “GI Bill,” which established a wide range of benefits for Veterans returning from World War II, including low-cost home loans, education and vocational training.

“This vital program offers Veterans, Servicemembers and their families the keys to homeownership and is truly a testament to our Nation’s commitment to enhancing the lives of those who served our country,” said Allison A. Hickey, VA’s Under Secretary for Benefits. “Twenty-one million home loans guaranteed, with the last one million guaranteed in just two years, is just one example of how VA employees are privileged to continue to serve and give back to our Veterans through the GI Bill.”

VA’s Home Loan Program provides housing-related benefits and services to make home ownership possible and affordable for eligible Veterans, Servicemembers and surviving spouses, who want to buy, build, repair or adapt a home. Nearly 90 percent of all VA loans are made with no down payment. In fiscal year (FY) 2014, the Home Loan Program guaranteed roughly 35,000 loans per month, resulting in a total of 438,398 VA home loans guaranteed for the year. The total value of all outstanding VA loans exceeds $380 billion. During FY 2014, the program also approved 1,253 grants to seriously disabled Veterans for the purchase, modification, or construction of a home specially adapted to meet their individual housing needs.

Through loan servicing efforts, the Home Loan Program also assisted nearly 80,000 borrowers avoid foreclosure in FY 2014.  These actions saved taxpayers nearly $2.8 billion in avoided claim payments.  Data from the Mortgage Bankers Association show that mortgages guaranteed by VA have had the lowest foreclosure inventory rate for the last 25 quarters when compared to all other types of home loans in the nation, including prime loans.

Veterans may obtain a certificate of eligibility for a VA-guaranteed home loan through the joint Department of Defense—VA web portal eBenefits, at, or by contacting their lender.

For more information about the VA Home Loan Program, visit the program’s home page at

To apply for this or any other loan program contact me today! That's okay if you don't have your Certificate of Eligibility (COE) we can get that for you electronically all you need is your DD-214, no need to make a special trip.

Additional Resources:

Oregon Mortgage ConneXion - VA Loans

Thursday, September 25, 2014

USDA Rural Area Changes Delayed Once Again

Big news from the national USDA RD Office in DC... 

Implementation of New Rural Area Ineligible Area Maps Delayed!
On September, 19, 2014, “Continuing Appropriations Resolution, 2015,” (Public Law 113-164) was signed by the President.  The continuing resolution extends a current general provision regarding housing program eligibility.   This means that if a community is eligible today, they will remain eligible under the continuing resolution.  Barring further Congressional action, RHS will delay implementation of the revised rural area maps based on the changes to the rural area definition as revised in the Agricultural Act of 2014 (Pub. L. 113-79).  During the continuing resolution and as provided in the FY   2014 Appropriations Act (P.L. 113-76), RHS will not reclassify any area eligible for rural housing programs on September 30, 2013 as not eligible for such programs.  The “Future Eligibility Maps” are posted on the Eligibility Website.
It appears this delay to the first phase is in effect through the end of the 2015 fiscal year unless/until further congressional action is made. A little more insight to the delayed changes are explained in an update we received from USDA last week regarding the determination of eligibility by the loan guarantee application date.
The “Farm Bill” revised the eligible rural area definition for USDA housing programs by amending population limits used to determine eligibility for program benefits.  It also retained the requirement for eligible areas to be rural in character and have a serious lack of mortgage credit.  However, on August 21, 2014, the Secretary of Agriculture suspended any changes to an eligibility determination based solely on the “rural in character” clause through September 30, 2015. 
On October 1, 2014, the USDA Rural Housing Service will update maps used to determine property eligibility.  The updated maps will include all eligibility changes.  Changes that were originally slated to take effect due to the "rural in character" clause will not be implemented at this time."
This is very good news... we will be revisiting this change again next fall unless another act of congress takes place. In the meantime it is status quo for those seeking to take advantage of the USDA Rural Loan. To apply for this or any other loan program contact me today! 

Additional Resources

USDA Guaranteed Housing Loan

OregonMortgageConneXion - USDA

Friday, September 5, 2014

USDA Rural Loan to Increase Fee

The annual fee that is charged by the USDA is set to increase "on October 1, 2014. The annual fee for both purchase and refinance loans will increase from .4% to .5%.  This change is required to maintain a neutral cost of the program" according to the  national RD office and has been in effect since October 1, 2011. This is the second increase to this fee, which was effective October 1, 2012. 

The upfront fee charged remains the same at 2% and may be added to the initial loan amount.

Additionally USDA RD offices suggest that...  "Lenders should communicate with Rural Development (RD) State Offices to understand current processing timeframes and determine which annual fee structure should be utilized..." Many RD State Offices are currently working through a backlog of guaranteed applications and lenders will need to begin processing loans using the .5% annual fee when it is estimated that RD will be unable to issue a conditional commitment prior to the close of business on September 30, 2014." backlog they mean 35 business days, at least here in Oregon due to budget cuts and staff reductions. 

The compounding effects of the upcoming changes and the current underwriting turn-times are astronomical between the impending boundary changes, aging documents, increased debt to income ratios due to the increasing fees, and re-disclosure / compliance requirements. We might see some serious fallout if all parties aren't on their toes. Hopefully we will see some relief to that "backlog" sooner rather than later and we see the boundary changes delayed albeit again and/or temporary.

To apply for this or any other loan program contact me today!

Additional Resources:

Wednesday, May 7, 2014

USDA Rural Loan Service Area Definition Remains an Ongoing Battle

In the umpteenth release from USDA Rural Development regarding eligible areas read on... 

New Rural Area Maps for USDA Rural Housing Programs!

The rural area definition was revised with the passing of the Agricultural Act of 2014, H.R. 2642 (Farm Bill) by modifying the second sentence of section 520 of the Housing Act of 1949 (42 U.S.C. 1490).  The rural area definition is amended as follows:

(1) by striking "1990 or 2000 decennial census shall continue to be so classified until the receipt of data from the decennial census in the year 2010" and inserting "1990, 2000, or 2010 decennial census, and any area deemed to be a 'rural area' for purposes of this title under any other provision of law at any time during the period beginning January 1, 2000, and ending December 31, 2010, shall continue to be so classified until the receipt of data from the decennial census in the year 2020;" and
(2) by striking "not in excess of 25,000" and inserting "not in excess of 35,000."

Additionally, section 737 of the Consolidated Appropriations Act, 2014 (H.R. 3547) authorized any area that was eligible as of September 30, 2013, to remain eligible until September 30, 2014. 

As a result of the legislation, Rural Development revised the eligible area maps, based on the Farm Bill, on May 6, 2014.  At this time, only areas that could be transitioned from “ineligible” to “eligible” are reflected in the map changes.  The maps are available on the Eligibility website (  Select “Single Family Housing” under the Property Eligibility menu.

Stakeholders are advised that additional changes to eligible rural areas for USDA Rural Housing Programs as outlined in H.R.933, Consolidated and Further Continuing Appropriations Act of 2013 and the 2010 Census will take effect on October 1, 2014, barring further Congressional action.  A preview of the “Future Eligible Areas” will be available on the USDA Income and Property Eligibility Site later this summer. 

The USDA Rural loan remains a popular loan program in the outlying areas in the Portland Metro Real Estate Market. The loss of a program that allows for low-moderate income families to finance 100% would not go unnoticed. See the link below for more insight... 

To apply for this or any other loan program contact me today!

Additional Resources

OregonMortgageConneXion - USDA