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Conventional - High Balance and Conforming Mortgage
Who are our Conventional – High Balance / Conforming Mortgages Best Suited For?
Conventional mortgages are typically geared towards borrowers with more robust credit / income / asset profiles. Conventional mortgage borrowers are held to a higher qualification standard.
How Do Conventional – High Balance and Conforming Mortgages Work?
These mortgages are secured by Fannie Mae and Freddie Mac. Currently these institutions are government entities that provide all the conventional mortgage programs. These mortgages are typically secured by borrowers with better credit / income / asset profiles. Conventional mortgages are recognized as superior mortgages for more qualified borrowers. Geared for a paper borrower, approvals are generated by an automated underwriting system “AUS” called (DU or LP). As a lender, we run your mortgage file through the system and the “AUS” and a DU or LP approval is generated. As a lender we make sure to satisfy all conditions called for by the AUS.
Program Highlights for Conventional – High Balance and Conforming Mortgage
- Conventional high balance mortgage limit $765,600.00 for an SFR. Mortgage limits are higher for 2-4 units
- Conventional conforming mortgage limit $510,400.00 for an SFR. Mortgage limits higher for 2-4 units
- Maximum loan to value is 97%. On a high balance 97% LTV is limited to home ready mortgage. Home ready mortgages have income restrictions. Typically, on high balance mortgages 95% is max financing
- Mortgage insurance is required for any mortgages over 80% LTV. This is not government insurance. This insurance is private mortgage insurance provided by third party companies. We as the lender will shop for the best mortgage insurance providers for your mortgage
- To qualify it must be full documentation only. We require tax returns / pay stubs and bank statements
- Freddie Mac does offer a 1-year tax return program. For this program you must be self employed for at least 5 years
- A minimum credit score of 620 is required for high balance and conforming mortgages
- Max DTI ranges between 43-47%. In some cases, we have seen higher DTI’s get approved. All approvals are generated through an automated underwriting system called DU (Desktop Underwriter) for Fannie Mae mortgages and LP (Loan Prospector) for Freddie Mac mortgages
- There is no reserve requirement on owner occupied purchases or refinances however it does help. There are reserve requirements on investment properties
- This program is eligible for purchase transactions or refinance rate and term or cash out. Unlimited cash out options are available. Maximum LTV on a SFR cash out is 80%. LTV’s range based on occupancy and home type
- The occupancy is limited to primary residence, second home and investment properties are eligible on this program
- Single family homes, condominiums and 2-4 unit homes are all eligible for financing. If you are financing a 2-4 unit home the borrower must occupy one of the units. Financing for 2-4 unit investment properties is eligible as well
- Non-occupying co-borrowers may be used to qualify
- First time home buyers are eligible
- Delayed financing options are available
- 30 year fixed, 15 year fixed, 5/7/10 year ARM – available
- Minimum mortgage amount is $300,000.00
More reserves will be required for mortgage amounts over $1,000,000.00**
