01/30/2023
Fannie Mae and Freddie Mac have eliminated all loan level price adjustments, or surcharges for First Time Homebuyers(FTHB) making under $138840/year in the majority of Orange County. The savings can be credited towards reduced closing costs or towards a better rate. No courses or training are needed to take advantage of the discount. The borrower just needs to apply to a participating loan provider.
The advantage will vary depending on the borrower's down payment, credit score, and the type of property purchased. Condo purchasers will see the biggest benefit along with those under 740 credit scores.
Here are a couple of examples where the difference is greatest;
Condo purchase, 5% down, 700 score, 300,000 sales price, $285,000 loan. This borrower will save $4987.50 towards closing costs or $132/month in payment.
Single family purchase, 20% down, 675 score, 300,000 sale price, $240,000 loan. This borrower will save $6600 towards closing costs or $180/month in payment.
I can think of 2 opportunities;
1. Buyers that might have needed to go FHA can now do a conventional loan.
2. Potential condo purchasers (can't go FHA) who were previously priced out because of surcharges may now qualify to buy a condo.
As always if you need more information or assistance prequalifying any customer, please feel free to call.
Best,
Fred Goncher
845-786-1610
