Here's Fannie Mae's new rules for conforming loans. (from Calculated Risk). In case you didn't read about it in the Press Enterprise they did raise the conforming loan limit for Riverside to $500k. The based that on a median of $400k. I don't know why they did that other than pressure from NAR or the government. It makes no sense since the actual median is closer to $300k which would have meant no change for the IE.
1. Fixed rates can be sold to Fannie on or after April 1; ARMs on or after May 1. The loan has to be closed on or after March 1 to be subject to the following rules; inventory loans (closed from last July to March) have to be subject to a "negotiated commitment."
2. No AUS approvals. It seems they plan to update Desktop Underwriter (their automated underwriting system) before the year is out, but they haven't done so yet and they're rollin' without it.
3. For principal residences, fixed-rate loans are limited to 90% LTV/CLTV for a purchase, and 75% LTV/95% CLTV for a no-cash-out refi. ARMs are limited to 80%/80% on a purchase and 75%/90% on a no-cash-out refi. CASH OUT REFIS ARE NOT ALLOWED.
4. For second homes and investment properties, the maximum LTV/CLTV is 60% in all cases for purchases and no-cash-out refis.
5. Minimum FICO for any loan is 660, with a minimum of 700 for LTVs greater than 80%.
6. One-unit properties only.
7. On a primary residence, existing subordinate liens must be resubordinated. The new loan cannot "cash out" an existing subordinate lien.
8. No late mortgage payments in the preceding 12 months.
9. 45% maximum DTI, with ARMs qualified at fully-amortizing fully-indexed rate.
10. Full doc only.
11. For purchases, the borrower must make at least 5% of the down payment from his or her own funds.
12. A full appraisal with interior inspection is required on all loans; if the property value is more than $1 million, a field review appraisal is also required.
13. Loans are subject to all current pricing adjustments, plus another .25 for FRMs and .75 for ARMs.
What does all this mean? I'm sure a few people will benefit from this. Those will be higher income families that have a down payment and can qualify (full doc) for a loan. I doubt it will help more than a handfull of people refi since hardly anyone that purchased in the last 5 years has 25% equity in their home.