Do the math. Better yet, allow me...

The days of 100% financing with no documentation are gone, but with upgraded FHA loan guidelines buyers can put as little as 3.5% down and obtain a conservative 30-year fixed-rate mortgage.

In the nine-county San Francisco Bay area, the FHA loan limit is $729,750. Put 3.5% down, and this translates into a $756,217 home purchase price. With 10% down, it translates to an $810,833 purchase price.

You might not get a Pacific Heights mansion, but you could certainly get a Cole Valley condo.

Feel like house hunting? Me, too! Email me or call 415/602-9056 to get started.

How low can they go?

This article by Luke Mullins for U.S. News & World Report spells out the seven things to know about the incredible shrinking mortage rates. There's something so tidy and concrete about a numbered list.

Mullins also wrote this article on home buyer tax credits.

The Treasury Department's next move

According to the Washington Post, the U.S. Treasury Department is strongly considering a plan to intervene directly in the mortgage industry to dramatically force down rates.

Read the entire article here.

Fannie Mae to temporarily halt foreclosure sales and evictions

Breaking news!

The following is reprinted from a Fannie Mae email announcement.
Please note the Lender Letter is a link to a PDF.

Fannie Mae has issued Lender Letter 04-08 announcing that we are halting all foreclosure sales on occupied single-family properties that are scheduled to occur from November 26, 2008 through January 9, 2009. This temporary halt also applies to eviction lockouts of occupied single-family properties.

These actions allow affected borrowers to retain their homes while we work with our regulator and conservator, the Federal Housing Finance Agency, to implement the previously announced streamlined loan modification program by December 15, 2008.

To facilitate borrower communications, servicers must instruct foreclosure attorneys to send letters to borrowers whose foreclosure sales are halted urging them to contact their servicer, so that together, the servicer and borrower can continue working to resolve the delinquency.

For complete details, including other servicing and reporting requirements, please see Fannie Mae Lender Letter 04-08 (PDF) on our 2008 Lender Announcements and Letters page on eFannieMae.com and the news release on fanniemae.com.

Conforming loan amount to increase

Susan Weber Pomilia shared some good news.

Conforming loan amounts for San Francisco and Marin Counties will be increased from the current $417,000 to $625,500 as of the first of the year. This translates to a purchase price of $781,875 with a 20% down payment. Much more realistic for our part of the real estate world.

Rates have also improved over the past two weeks. Right now conforming loans ($417K ) are at 5 7/8% with 1 point, while Jumbos (729K and above) are at 6 1/4% with one point. Remember, the Jumbo conforming category is being phased out, and will be gone by January 1, 2009.

What's the big deal about Jumbos?

Right now, rates on conforming loans (up to $417,000, or 80% of a $521,000 property) can be had at roughly 6% for a 30-year fixed rate, with one point to the lender at closing. However, in San Francisco that's not going to get you more than a smallish condo or a TIC (tenants in common) property.

If you're looking for a single-family home, you need to know about conforming Jumbo and Jumbo loans So, what's the diff?

The conforming Jumbo is for loan amounts between $418,000 and $729,000 (or an 80% loan on a 912K purchase price). However, the limits on conforming Jumbos are being lowered to $625,000 at the end of 2008. Presently, conforming Jumbos will run you 6.25% for a 30-year fixed rate with one point to the lender at close of escrow.

The Jumbo includes loans over $729,000. They’re currently available for loans of up to $1.1 million at around 6.75% for 10 years fixed, going to variable for years 11 through 30. The standards on these loans are even more stringent than those of lower value loans, and they also require at least a point at close of escrow.

While the financing arena is certainly tougher than its been for years, it is still possible to finance a home. (Do I need to mention that I'm just the person who can help you jump through lenders' hoops?)

Only the loan-ly...

The U.S. economy is in massive turmoil, stocks look like they’re in free fall, and most of my friends are putting their money under their mattresses. The news says the credit markets are frozen.

There can’t be any way to get a home loan now, right?

Well, not exactly. While lending standards have gotten tougher (long overdue, in my opinion), there are lenders out there making loans.

Earlier this week I asked Susan Weber Pomelia of Residential Pacific Mortgage for her take on the lending market. Here's the skinny:

1. Make sure you pre-qualify before you fall in love with a house.
Lenders are much more stringent about down payments, verifying income, and credit scores. While a very few lenders are willing to make 90% loans, most are requiring at least 20% cash down.

2. Be prepared to provide two years of tax returns, W-2’s and other financial documentation.
Lenders want to see a ratio of no more than 45% of income going to total debt (including credit cards, car loans, etc.). The days of stated income/no documentation loans are over.

3. Manage your credit carefully to keep your credit scores high.
This is a good idea any time.

If you have specific questions about financing or buying a home in the San Francisco Bay Area, please email me at Vision Real Estate.