FHA Versus Conventional Loans California Mortgage Guidelines

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FHA Versus Conventional Loans California Mortgage Guidelines

This BLOG On FHA Versus Conventional Loans California Mortgage Guidelines Was UPDATED And PUBLISHED On September 10th, 2019

FHA Versus Conventional Loans California
Gustan Cho Associates Mortgage Group

California is a unique state than any other states in the United States.

  • California has one of the highest home prices in the nation
  • Home values in many areas of California are substantially higher than most parts of the country
  • HUD as well as Fannie Mae and Freddie Mac and the Department of Veteran Affairs recognize the economic impact of California
  • Home loan limits for all loan programs are higher in the state of California than the rest of the United States
  • Most areas of California are classified as high-cost areas
  • Lending loan limits are higher than the standard loan limits for FHA loans, Conventional loans, VA loans, and USDA loans

In this article, we will cover and discuss Comparisons Of FHA Versus Conventional Loans California.

FHA Versus Conventional Loans California High-Cost Areas

FHA Versus Conventional Loans California High-Cost Areas

Both HUD and FHFA has increase FHA and Conforming Loans Limits for 2010. FHA Loan Limits were increased two years in a row due to rising home prices. Federal Housing Finance Agency also increased conforming loan limits for two years in a row. FHA Loan Limits is now at $314,827 and Conforming Loan Limits is capped at $484,350. Loan Limits in high-cost areas of California has also increased to $736,525.

  • However, FHA did make exceptions to the FHA loan limits to high-cost areas throughout the United States
  • For example, the counties surrounding the Chicagoland area, Cook County, Lake County, DuPage County, McHenry County, and Will County are deemed high-cost areas
  • FHA loan limit is $368,00 instead of $314,827

However, the rest of the state is $314,827.

Conforming Loan Limits

What is Conforming Loan Limits

With conventional loans, the loan limit has increased to $484,350 except for high-cost areas:

  • The disadvantage of FHA versus Conventional loan is the FHA loan limit is capped at $314,827 unless it is high-cost areas where loan limits are capped at $736,525
  • Many home buyers who need higher-priced homes and larger loan amounts will no longer qualify with an FHA loan unless the property is located in a high-cost area
  • FHA lending guidelines are much more lenient than conventional lending guidelines as well
  • However, many California home buyers are in luck
  • In California, depending on the high-cost county you are in, FHA loan limits are higher and many counties have caps of $736,525

FHA Versus Conventional Loans California Max Loan Limits

FHA Versus Conventional Loans California Max Loan Limits

Home Buyers in California in a high-cost area and are purchasing a higher-end home surpassing the high-cost loan limit of $723,525, non-QM loans may be the loan program of choice:

  • There are many areas in California where the FHA loan limit is $726,525
  • Maximum conventional loan limits are capped at $484,350
  • But in California, conventional loan limits are higher in areas classified as high-cost areas
  • For example, if a home buyer were to purchase a home in Los Angeles Count, the FHA loan limit is $725,525
  • Ironically, the conventional lending loan limit in Los Angeles County is also $736,525
  • VA loans no longer have a maximum loan limit
  • For a two-unit owner-occupied property in Los Angeles County, the maximum lending loan limit for all three loan programs ( FHA, VA, and Conventional) is capped at $930,300
  • For a three-unit owner-occupied property in San Diego County, all three loan program caps the lending loan limit at $1,124,475
  • For a four-unit property in Los Angeles County, the maximum lending limit for FHA, VA, and Conventional loan is capped at $1,397,400
  • Other counties can higher and/or lower FHA and Conventional lending loan limits for single-family and multi-unit homes

Please contact us or text us at 262-716-8151 for FHA Versus Conventional Loans California Loan Limits

NON-QM Loans Versus Government And Conforming Loans

NON-QM Loans Versus Government And Conforming Loans

Gustan Cho Associates Mortgage Group offers Non-QM loans in California as well as nationwide where there is no waiting period after housing event or bankruptcy.

  • NON-QM Loans has no loan limits
  • However, it does require 10% to 20% down payment
  • The higher the down payment, the lower the mortgage rates
  • The higher the borrowers credit scores, the lower the down payment requirement
  • There is no private mortgage insurance required with Non-QM loans
  • California homebuyers who do not qualify for Jumbo Mortgages due to the higher credit standards can qualify for Non-QM loans with credit scores down to 600 with no loan limits
  • GCA Mortgage Group also offers bank statement loans for self-employed borrowers
  • Many self-employed borrowers had a hard time qualifying for home loans due to write offs on their income tax returns
  • Our bank statement loan program does not require any tax returns
  • Two years bank statement deposits are averaged and that monthly average is used as borrowers monthly income
  • We can go up to 50% debt to income ratios

FHA Loans With No Lender Overlays In California

FHA Loans With No Lender Overlays In California

Home Buyers who are told they do not qualify for an FHA Loan in California due to lender overlays , look no further and contact us or text us for faster response at 262-716-8151.  We are a no overlay direct California FHA mortgage lender.  Minimum credit scores required for a 3.5% down payment home loan in California is 580.  Most California mortgage lenders will require a minimum credit score of 620 even though the minimum credit score required is 580.  California lenders can mandate a higher credit score requirement even though the federal minimum credit score guidelines set by FHA is 580.  FHA maximum debt to income ratios is capped at 46.9% front end and 56.9% back end to get an approve/eligible per AUS.  However, many California mortgage lenders will have debt to income ratio overlays capped at 45% on FHA Loans.  We are FHA mortgage lenders with no mortgage lender overlays and will go by the minimum federal FHA lending guidelines.  Whatever the minimum FHA lending guidelines are and you get an automated underwriting system, we go off the automated finding per DU FINDINGS or LP FINDINGS.

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