conventional

What is the FNMA Fully Amortizing Fixed Rate Loan? The fully amortizing fixed rate loan provides a popular option for first-time homebuyers and repeat buyers alike, because of the fixed monthly payments and 30 year term. With a fixed interest rate, the mortgage payment won’t increase due to a change in the market. Because a shorter term mortgage isn’t always an affordable option for borrowers, a 30-year mortgage is attractive to many consumers. The FNMA High Balance loan program offers the same fixed rate benefits but provides for higher loan limits for properties in specific high-cost areas. High-balance loans are considered to be between $424,000 and $636,150. The amount is determined based on where the property is located. FNMA Fully Amortizing Fixed Rate and High Balance Loan Basics Purchase and Refinance Options 620 minimum qualifying credit score 10, 15, 20, 25, 30 year terms for fully amortizing fixed rate program 15 and 30 year fixed rate for high balance program Standard Appraisal requirements apply One to Four Unit primary homes One Unit second homes One to Four Unit non-owner occupied residences FNMA Approved Condos/PUDs Multi-width manufactured housing (Investment properties are not permitted) What are the benefits? Low Monthly Payments Fannie Mae offers competitive interest rates which help keep payments low. The 30-year term makes budgeting easier. Fixed Payments Fully amortizing fixed rate loans means the fixed rate never changes, and neither does the principal and interest payment. Many homeowners prefer a fixed interest rate because it provides a sense of stability and security in contrast to adjustable rate loans with introductory interest rates that can move higher once the introductory period is over. Increased Loan Limits for Higher Cost Areas Fannie Mae sets higher loan limits in specific high-cost areas, as a reflection of the average home prices there. This means more homeowners can take advantage of this program and avoid jumbo financing, which is often more costly. Who is eligible for a Fannie Mae Fully Amortizing Fixed Rate and High Balance Loan? Borrowers will need to meet the employment, credit, income, asset, and property requirements of FNMA loans. Other eligibility requirements include: Minimum qualifying credit score of 620. A minimum qualifying credit score of 680 is required if utilizing Lender Purchased Mortgage Insurance (LPMI). Eligible property types: One to Four Unit primary homes, One Unit second homes, One to Four Unit non-owner occupied residences, FNMA Approved Condos/PUDs, and Multi-width manufactured housing. Manufactured housing is not permitted as an investment property. Single wide manufactured housing and Co-ops are not permitted. In which scenarios is the FNMA Fully Amortizing Fixed Rate and High Balance Useful? A widely used and versatile program, the FNMA Fully Amortizing Fixed Rate High Balance mortgage can be a great fit for many purchase and refinance transactions. When not limited by specific restrictions such as not having any funds available for a down payment, or having poor credit, this can be an excellent choice offering low mortgage rates. This product can be used by first time or move up home buyers, and buyers of a second homes or investment properties. Current homeowners interested in refinancing have both rate and term and cash out options. Buying a Home with a FNMA Fully Amortizing Fixed Rate and High Balance Loan Borrowers should know their goals before deciding on a term length for a Fully Amortizing Fixed Rate or High Balance loan. 30 year terms are feasible to many because the monthly payments will be lower, but extending a mortgage means it will take longer to build equity through repayment. It is always possible that additional equity will be gained through an increase in property value. FNMA Fully Amortizing Fixed Rate and High Balance Loan Refinancing The FNMA Fully Amortizing Fixed Rate and High Balance Loan is an ideal loan solution for home buyers, but it’s also an exceptional product for existing homeowners who want to refinance. Whether borrowers are looking for a shorter term mortgage to save money and interest and pay off the loan sooner, or want to consolidate debt or have funds available for other expenses through a cash out, this program can be a great fit.What is the FHLMC Fully Amortizing Fixed Rate? The FHLMC (a.k.a. Freddie Mac) Fully Amortizing Fixed Rate and Super Conforming Loan is a conventional mortgage product designed to help qualified borrowers secure competitively priced home financing for conforming and super conforming loan limits. FHLMC Fully Amortizing Fixed Rate & Super Conforming – The Basics Borrower must receive a benefit in the form of a reduced principal and interest payment, lower interest rate, shorter loan term, or a less risky mortgage product such as when moving from an adjustable rate mortgage to one with a fixed rate. Conventional mortgage product that fully amortizes (no interest-only or balloon payment). Super conforming option available. 15, 20, 25 and 30 year fully amortizing fixed rate options available. ARMs not permitted. 620 minimum FICO 680 minimum FICO if Lender Purchased Mortgage Insurance (LPMI). Eligible transaction types include purchase, no cash-out refinance, cash-out refinance, and Texas Home Equity 50 (a)(6). 1-4 unit primary residences permitted. 1 unit second homes permitted. 1-4 unit non owner occupied residences permitted. Condominiums/PUDs permitted. Multi-width manufactured housing permitted however, manufactured housing cannot be a super conforming mortgage, a singlewide unit, an investment property or a leasehold estate. Co-ops not permitted. Maximum LTV 95% for 1-unit primary residence on purchase or no cash-out refinance. Follow Freddie Mac guidelines for all additional LTV scenarios. AFR does not permit loan with a subject property in Hawaii for all programs in all channels with the exception of Correspondent Delegated UW transactions. What are the benefits? Competitively Low Rates Loans owned or guaranteed by Freddie Mac, a government-sponsored enterprise (GSE), can help homeowners save through low interest rates on their mortgage loans. Super Conforming Option for High-Cost Areas Freddie Mac’s super conforming mortgages allow larger loan amounts. These higher loan amounts are permissible in designated high-cost areas such as Southern California, Alaska, NYC or the Washington, D.C. area. With the super conforming option, borrowers in high-cost areas can still get a competitively priced interest rate on a conforming mortgage product and avoid having to get a jumbo mortgage. This also provides a benefit to lenders working with borrowers in higher-priced regions, as it offers an alternative to higher risk jumbo financing. Flexibility in Terms, Properties & More The FHLMC Fully Amortizing Fixed Rate & Super Conforming product from AFR Wholesale is one of the most versatile lending products on the market. This loan product not only offers a range of fixed rate terms (15, 20, 25 and 30), it is also available for purchase, refinance, cash-out refinance and with the Texas Home Equity 50 (a)(6) cash out refinance option. This program also offers flexibility when it comes to eligible property types. Whether your borrower’s subject property is a primary residence, second home, or multi-width manufactured home, they can use the FHLMC Fully Amortizing Fixed Rate & Super Conforming product to finance their purchase, presuming all other eligibility guidelines are met. Who is eligible for an FHLMC Fully Amortizing Fixed Rate & Super Conforming Loan? Eligibility for the FHLMC Fully Amortizing Fixed Rate & Super Conforming is determined by the borrower’s ability to meet the criteria listed in the basics section above, as well as additional program guidelines. There are numerous criteria for eligibility however, two key factors are: Credit Score A minimum qualifying FICO score of 620 is required for all qualifying borrowers. A minimum qualifying FICO score of 680 is required for all qualifying borrowers if there is Lender Paid Mortgage Insurance (LPMI). Loan Limits: Loan limits on the FHLMC Fully Amortizing Fixed Rate product follow Freddie Mac guidelines. There is a $1,000,000 maximum loan limit for the FHLMC Super Conforming product. In which scenarios is the FHLMC Fully Amortizing Fixed Rate and/or Super Conforming loan a good option? Whether they’re a first-time buyer or repeat buyer, the FHLMC Fully Amortizing Fixed Rate program allows qualified borrowers to obtain competitively priced home financing with flexible underwriting standards. A few scenarios that could be ideal for FHLMC Fully Amortizing Fixed Rate financing/refinancing include… A borrower purchasing a single-unit primary residence who can’t afford a down payment higher than 5%. A borrower interested in purchasing a second home. A current homeowner with at least 20% equity who needs cash to help pay off a big expense. And a few scenarios that could be ideal for FHLMC Super Conforming financing/refinancing include… A borrower purchasing a single-unit home (priced at or below $1,000,000) in a high-cost area. A borrower who wishes to refinance their high-cost property and shorten the amortization period in order to pay off their mortgage debt sooner. A borrower who wishes to refinance their high-cost property and lengthen the amortization period in order to lower their monthly mortgage payments. Why was the FHLMC Fully Amortizing Fixed Rate & Super Conforming Program Created? Fully Amortizing Fixed Rate The FHLMC Fully Amortizing Fixed Rate mortgage program is a flagship program of the Federal Home Loan Mortgage Corporation – a.k.a. Freddie Mac – which is a public government-sponsored enterprise (GSE). The FHLMC was created in 1970 to expand the secondary mortgage market in the United States. Along with its sister GSE, the Federal National Mortgage Association (Fannie Mae), Freddie Mac buys mortgages on the secondary market, packages them together and sells them as mortgage-backed securities (MBS). The FHLMC Fully Amortizing Fixed Rate loan is a loan that is written to guidelines set by Freddie Mac and is one of the conforming loans Freddie Mac is allowed to buy. Super Conforming The Super Conforming loan was created by the Economic Stimulus Act of 2008 to allow Freddie Mac and Fannie Mae to purchase mortgages in designated high cost housing markets. The higher limits of the Super Conforming loan are set equal to 115% of local median house prices up to a maximum of $636,150 with higher limits permitted for 2-4 unit homes and homes located in Alaska, Hawaii, Guam and the U.S. Virgin Islands. Buying a Home with the FHLMC Fully Amortizing Fixed Rate & Super Conforming Loan Buying a home with the FHLMC Fully Amortizing Fixed Rate and/or Super Conforming loan should begin with the borrower getting pre-qualified or pre-approved. From there, the borrower will likely complete the typical steps involved in securing conforming/super conforming home financing. This can include but is not limited to… Providing the lender with all necessary documentation to prepare the loan application for approval and underwriting. Verification of all income, credit, debt and asset information by the lender. Home appraisal. Home inspection. Closing. Refinancing Options Refinancing is an option under the FHLMC Fully Amortizing Fixed Rate & Super Conforming. Qualified borrowers can take advantage of competitive rates on non cash out refinancing, cash out refinancing and the Texas Home Equity 50 (a)(6) cash out refinancing options.