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June 5, 2009
Conforming Loan Question
We are looking to buy a coop or condo in Brooklyn. We recently spoke with a mortgage broker who told us that per Fannie Mae guidelines, the maximum loan we could get would be $417K if we put down less than 20% (we plan to put down about 15%, but $417K puts us just shy of what we were hoping to spend). Our understanding was that that limit was higher, something like $625K in high-cost areas like NYC, buy she told us this increased limit was only for FHA loans. Is that correct?
Thanks,
Jessica
Comments
Most coops require at LEAST 20%. Only way you can do less is purchasing a sponsor-owned unit in a coop coversion -- not many come on the market.
Posted by: BH76 at June 4, 2009 3:56 PM
Thanks. This may be ignorant, but I am not sure that answers my question. We are looking at coops that have advertised that they will accept 10% down (even though we will put down more than that) if we can get the loan for the rest. What I am asking is what the Fannie Mae limit is for the loan in that situation.
Posted by: figandplum at June 4, 2009 4:09 PM
Fannie Mae's loan limits can be found here:
http://www.fanniemae.com/aboutfm/loanlimits.jhtml
For Kings County, NY the limit is $625,500 for a single family unit. This indicates what mortgages Fannie Mae is allowed to buy not what the banks will lend. I have friends going through the mortgage process and no matter how often they tell the bank/broker about the higher conforming loan limits for NYC, the lenders don't want to lend more than $417,000 for a conforming loan, and there's nothing a potential borrower can do. Good luck.
Posted by: bohuma at June 4, 2009 4:39 PM
I also though the limit was around $600,000 or so.
Posted by: mopar at June 4, 2009 4:41 PM
I'm surprised you're hearing this from a mortgage broker. Maybe find one who specializes in Brooklyn coops, if yours does not. Or what about trying a Brooklyn-based credit union? Or a bank such as Wells Fargo that does lots of coop lending in the city?
Posted by: mopar at June 4, 2009 4:43 PM
You can finance up to 85% if your loan amount is over 417k in Brooklyn currently. Not because Fannie won't let you but because you can not get Mortgage Insurance. The MI companies currently have Brooklyn as a declining market so if your loan amount is under 417k you can get 90%, if over 417k you can get 85%.
FHA does not lend on COOP properties only Condos and you would need to have the Condo FHA approved if it currently is not which can be a whole other issue.
adahill@approvedfunding.com
Posted by: Adam Dahill at June 4, 2009 6:11 PM
"Most coops require at LEAST 20%. Only way you can do less is purchasing a sponsor-owned unit in a coop coversion -- not many come on the market."
This is false. Many brooklyn coops only require 10% down.
Posted by: squaredrive at June 4, 2009 6:34 PM
Adam, hi!!!!!!!!!!!!!!!!!!
Good info.
What kind of rates are you seeing these days?
Posted by: mopar at June 4, 2009 10:57 PM
UGLY. The Fed needs to step in and push them back down.
Posted by: Adam Dahill at June 5, 2009 9:42 AM
Hm! What do you suggest buyers should do now?
Posted by: mopar at June 5, 2009 9:55 AM
mopar, this is the debate I am having and I raised it earlier this week in the Biggest Weekly Sales thread. Interest rates have pushed up 90bps in the past five weeks. In order for affordability to remain the same, prices would need to come down to reflect this... unless the rise in interest rates is a reflection of increased expectations for inflation in which case people should be willing to pay more today because they expect they will be paying even more in a year or two. I can't figure out if the rise interest rates is a reflection of rising inflation expectations or signs that Treasury buyers are losing confidence in our government's fiscal discipline, which would be a negative sign for economic growth and housing prices. Next week's Treasury auctions should help answer that question.
Posted by: bkhabitant at June 5, 2009 10:21 AM
Buyers can't do anything. You can't lock a rate without a property. Rates have moved up too much too quickly. This is going to hurt the housing recovery going on across the country. Bernanke needs to come in here and start buying treasuries to make MBS look more attractive.
Posted by: Adam Dahill at June 5, 2009 10:38 AM
I am currently in the process of purchasing a coop in Brooklyn. I saw allot that would allow less then 20% down but you have to get loan insurance. It costs an extra 100 a month until you build enough equity to cancel it each threshold is different so talk to your lender about it.
Also I am using CHASE
Posted by: 646 at June 5, 2009 10:40 AM
"The Fed needs to step in and push them back down."
We're in this mess because of the Fed's meddling. Abolish the Fed.
Posted by: bridges at June 5, 2009 11:04 AM
This is not a specific recommendation for your situation since your specific circumstance is unknown, but generally for future homebuyers the best bet would be to wait and save so you can put a bigger percentage down or ideally pay cash. Otherwise, you are basically using excessive leverage which easily could go against you as many homebuyers have recently discovered.
Posted by: cjmorris1201 at June 5, 2009 11:30 AM
"Bernanke needs to come in here and start buying treasuries to make MBS look more attractive. "
Adam you're are fucking retard!!!!!!!!!!!!!! You know damn well if The Fed announce that the Bond Market will implode!!! Stop fucking lying to yourself and others OK!!!!!
"UGLY. The Fed needs to step in and push them back down.
Posted by: Adam Dahill at June 5, 2009 9:42 AM"
The Bond Market is telling Bernanke to get bent!
Take a look right here!
http://www.bloomberg.com/markets/rates/index.html
Say Buh Bye Retards
The What
Someday this war is gonna end...
Posted by: Return of The What at June 5, 2009 12:40 PM
What- You are a classless bully. Existing home sales were up 6.7% because rates were held below 5%. All those FTHB that are currently in contract are going to blow their escrow since they can no longer qualify. Rates moving this quickly will squash any housing recovery that we are starting to see throughout the US. You will see the DOW selloff again within the next few weeks and rates will drop along with it.
The market is getting ahead of itself. The DOW rallys 200pts the day GM goes bust? Those 250 thousand GM employees are going to be filing for unemployement in the next few weeks. How do you think that Jobs report will look?
Posted by: Adam Dahill at June 5, 2009 1:29 PM
Adam, I think you are talking your book to a certain extent. Adam, no doubt people will be coming in to refi/buy houses in larger numbers if the Fed comes in and buys Treasuries, pushing rates down again. The problem with that decision is that it crushes the dollar, which in truth really isn't good for anyone except those who overextended themselves and used all of their savings to buy a house that was at or above their means. What we need is the true correction back to real pricing where homes cost three to four times annual salaries and people reduce their debt to historical levels.
I do agree with you that the market is getting ahead of itself, but what we need is to reverse the absurd leveraging that occurred for the last decade.
Posted by: bkhabitant at June 5, 2009 1:49 PM
Hey Fuckface! When the retards was "dancing and prancing" throwing out poor people from their homes and neighborhoods no one cared then so why I should give a fuck about them???!!!
Remember "Real Estate only goes up", Riiiiiiiiiiiggggggghhhhhhhhttt???????!!!!!
I see you lost some your swagger Adam, what happen between now and last week????
Fuck all of you, Seriously!!! Now go tell your clients you have FAILED!!!!
The What (Adam Dahill just go PWNED!!)
Someday this war is gonna end...
Posted by: Return of The What at June 5, 2009 3:07 PM
You have some serious control issues what. Again classless.
Had two purchases this week, both were FTHB and both got great rates. Rates will simmer back down.
In the mean time you are and will continue to be a classless loser.
Posted by: Adam Dahill at June 5, 2009 3:34 PM
Borrowing by consumers fell by $15.7 billion in April as U.S. households continued to trim spending and put away their credit cards amid a severe recession.
The Federal Reserve says the April decline was the second largest ever in dollar terms following March's drop of $16.6 billion. March's decline originally was reported as $11.1 billion, which had been the most on records dating to 1943.
The April decline is more than double the $6 billion drop that economists had expected.
Posted by: Adam Dahill at June 5, 2009 3:37 PM
This is incredibly helpful, cannot thank you enough Adam. Thank you! And everybody else too.
Posted by: mopar at June 6, 2009 12:00 AM
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