Fannie is Your Friend

At the end of 2015, Fannie Mae made some changes to their loan programs that will make it easier to qualify for conventional loans.  These changes include:

• This one is our fav: Up to 95% loan to value on high balance loans ($474,950 in our area – it used to be only 90% on high balance and 95% up to $417K)
• Non occupant co-borrowers (…Mom & Dad) can now blend their income with the primary borrower, allowing the borrower to qualify for more.  In most cases the maximum a borrower can go when co-borrowing will be 95% loan to value ratio.
• Self-employed borrowers will now get the opportunity to submit only one tax return, instead of two (subject to automated approval). 
• HomeReady is Fannie Mae’s new affordable conventional lending product (it used to be My Community) to help low to moderate income borrowers purchase or refinance their first home.
• Here are some highlights:
  • 97% loan to value on purchases
  • Non-occupant coborrower allowed – coborrower income does not count against income limit eligibility
  • Lower mortgage insurance
  • Education is required for this product

Call the Easterbrook Team

For Purchase, Refinance, and Pre-Purchase Loan Counseling

John Easterbrook NMLS#226555 916.224.7653 Patty Aguon NMLS#994635 916.833.5063
EasterbrookTeam@spmc.com 916.850.6050

New Program Reduces Federal Income Tax a Homebuyer Pays!

New money is now available for the SHRA MCC program. This program blows away the $8,000 First-time Homebuyer Tax Credit, if the borrower keeps the loan in place for more than five years as an owner occupant.

The Sacramento Mortgage Credit Certificate (MCC) Program is designed to provide homeownership assistance on home purchases within the cities of Sacramento, Elk Grove, Folsom, Isleton, Galt, Citrus Heights, Rancho Cordova and the County of Sacramento. The MCC reduces the amount of Federal income tax a homebuyer pays, thus giving more available income to qualify for a mortgage loan and to make monthly mortgage payments. This new allocation won’t last very long, so take advantage of it while you can. Below are a few keep points on the MCC loan program.

Program Features:

• 20% Mortgage Credit Certificate – a tax credit of 20% of the annual mortgage interest paid (amount of the credit cannot be more than the annual federal income tax liability after all other credits and deductions have been taken into account)

• MCC will be in effect for the life of the original mortgage loan provided property remains owner occupied

• MCC may be reissued one time, upon the first refinance of the original mortgage loan

• MCCs may be used with conventional loans, fixed-rate or adjustable loans, FHA and VA loans (MCCs are not available with bond-backed loans such as CHFA or Cal-Vet)

• 40 percent of an MCC allocation is reserved for households whose income does not exceed 80 percent of the area median adjusted for family size

Eligible Applicants Include Homebuyers:

• Who are first-time homebuyers (have not owned and occupied a home as a principal residence within the preceding three years) (in federally designated target areas, you do not have to be a first-time homebuyer)

• Able to qualify for a loan to purchase the home

• Who will live in the home being purchased

Who do not exceed the following income limitation:

• 1 or 2 person household $73,100 (non-target areas) $87,720 (target areas)

• 3 or more person household $84,065 (non-target areas) $102,340 (target areas)

Eligible Properties Include:

• Single family homes that are located within the cities of Sacramento, Elk Grove, Folsom, Isleton, Galt, Citrus Heights, Rancho Cordova and the unincorporated areas of the County of Sacramento.

Maximum purchase price limits:

• New and Existing Homes $506,795 (non-target areas) $619,417 (target areas)

John Easterbrook (916) 224-7653 john.easterbrook@spmc.com Licensed – NMLS # 226555