1/2% Down Payment...Mediocre Credit "OK" ..No Closing Costs *
Home Buyers …….effective Jan 1, 2010 there’s now a new loan program with just “one-half (1/2%) percent down” and little or no closing costs*(see # 5) with marginal credit acceptable criteria ........ move you into your next home?
For borrowers it's a deal maker & for agents it’s a commission generator.
Currently many potential buyers EITHER don't have a down payment to buy OR they need to pay down debt to qualify for the loan.
Now you may not have to choose.
With a reduced down payment (only .5% ... vs. the typical 3.5% of the purchase price) borrowers can use savings to pay off debts
1) This program is available to all buyers...WHO FALL BELOW THE MAXIMUM INCOME LIMIT....NOT just 1st Time Buyers.
However if you are a current homeowner and is keeping your current residence as a "rental"...this will be a real obstacle. (Call for details).
2) Although the official loan amount is $725,250 ...the loan amount is effectively limited by INCOME LIMITS imposed by FHA...in the county where the property is located.
This loan program is a 96.5 FHA loan with a 3% investor 2nd. (Hence the name “Cal Chaffa Plus”)
The second is 15 year loan @ 8.25% rate (hence the name Cal Chaffa Plus)
3) Its a "full doc" ("no stated income") & borrowers must provide complete Fed. Tax returns, bank statements and recent paystubs.
4) Primary residence only.
5) Condo & SFR s "ok" (no manufactured homes)
5) *Home Seller and/ or RE agent can pay up to 6% in buyers closing costs (call for details).
6) Borrowers can receive a gift funds from family members.
7) No “non occupying Co-signers” ..all borrowers must plan to reside in the home.
8) There is no "minimum credit score to qualify" if your credit score is below 620...your interest rates will be higher.
Borrowers can have no late payments within the last 12 months.
9) Borrowers who have a "BK" must wait 2 years from date of discharge before they can close escrow....provided that a home was NOT foreclosed upon or short sold as part of the proceeding.
a) Borrowers must have re - established credit—(3 accounts) that are "seasoned" for more than 1 yr.
b) Borrowers who have had a short sale or foreclosure must effectively wait 4 years from the date of short sale to close escrow on the new home.
10) All "unpaid" collection accounts, charge-offs and/or liens must be paid off...in order to qualify.
Note: Those debts must not be paid off until the close of escrow!
Paying off old debt before the loan closes will reduce the borrower's credit score and probably kill your deal.
(Yes, I know that may go "counter" to what borrowers have been told....but that's how credit scoring is done).
So get your calculator...& remember all $$$ are rounded off.
INCOME LIMITS
Orange and Ventura County: $103,320
San Diego, Riverside, San Bernardino County: $77,400
Los Angeles: $74,520
So let me illustrate the highest price scenarios based on the maximum purchase price in each county.
Orange and Ventura County
Purchasing a SFR home: $465k with $2250 Down
1st Loan Amount: $449,250 @ 5.5% = $2,465
2nd Loan Amount 13,950 @ 8.25% (15 yr.) = $135
Borrower(s) Current Financial Situation
$8,605 monthly income ($103,250 annually)
$300 monthly debt service (credit card / car payment)
Property Information
Prop Tax: $465 ...Haz. Insurance: $100
HOA: None ....Mortgage Insurance: $205
Variables:
Buyers have some flexibility in this scenario.
For example:
They could have $300 LESS in "monthly debt service" and buy a condo with a HOA fee of $300.
They could use a "gift" from a relative to pay off debt and purchase a slightly higher priced home.
Los Angeles-San Bernardino-
Riverside- San Diego
With such little variance in income limits, let's lump all of these calculations together.
Purchasing a SFR home: $310 k with $1,550 down
1st Loan Amount: $288,500 @ 5.5% = $1,638
2nd Loan Amount $9,300 @ 8.25% (15 yr.) = $62
Borrower(s) Current Financial Situation
$6,425 monthly income ($77, 100 annually)
$300 monthly debt service
(ie. credit card / car payments)
Property Information
Prop Tax: $310 ...Haz. Insurance: $70...
HOA: None …..Mortgage Insurance: $138
Variables:
Buyers have some flexibility in this scenario.
For Example:
1) Buyers can have $300 LESS in "monthly debt service" and buy a condo with a HOA fee of $300.
2) Buyers may use a” gift" from a relative to pay off debt & purchase a slightly higher priced home.
One last thing.... transactions are requiring a 30 day escrow period ....that's only possible with this program if a borrower has a complete application together BEFORE offers are being written!!!!!!
If you'd like your application to be underwritten:
PLEASE CALL ME AND I'LL FOLLOW UP WITH AN APPLICATION AND FOLLOW UP PHONE CALL.
Within 48 hours I can provide you with max. purchase price & lists of items/actions needed to close escrow.
Sincerely
Dan Dobbs
Sr. Loan Officer
American Commerce Mortgage
Cell: 949 250-3981 Fax: 949 716-4474
Dandobbs6@gmail.com