Category Archives: Conventional

Foreclosure Rehab Program Do Not Have To Be A MN First Time Home Buyer

The Homeownership Opportunity Program (HOP) provides short-term, temporary financing for the purchase and rehabilitation of vacant properties in, or in imminent danger of foreclosure, and for properties in a foreclosure impacted area. HOP loans are paid off by standard first mortgage products when the rehabilitation is completed.

Borrower Eligibility
To qualify, borrowers must:
Intend to owner-occupy the property;
Meet income limits (total income less than $96,500 – adjusted annually);
Be pre-approved for a standard first mortgage with a loan amount sufficient to pay off the HOP loan when the work is completed.

Property Requirements
Cannot be in industry standard mortgage condition, and;
Must be a single family detached, zero-lot-line townhome, owner-occupied duplex, manufactured home on permanent foundation, and be;
– Vacant as a result of foreclosure, or
– In imminent danger of foreclosure with a negotiated short-sale, or
– Located in a foreclosure impacted area

Low Interest Rates Minnesota Mortgage Program

For buyers who do not need or qualify for down payment assistance we have the Minnesota Mortgage program comes with a subsidized interest rate .375% – .625% below market rate for government loans and .25% less for conventional loans.  Mortgage daily interest rates can be seen at www.mnhousing.gov

Mortgage Condos Townhomes Minneapolis St. Paul Twin Cities

Condominiums are just airspace within the unit surfaces. Legally known as “vertical subdivisions,” condominium owners own just the expensive airspace between their floor, ceiling and walls to the inner surfaces. The building structure is owned by the HOA, including the plumbing and wiring. The HOA usually also owns the common areas, such as hallways, elevators, land and parking areas. However, sometimes the common areas are owned by the individual condo owners as tenants in common, with the HOA responsible for maintaining the common areas.

Condominium owners often have the exclusive use of a specific additional area, such as a patio, balcony, storage area, and/or garage parking space. But the HOA usually has maintenance responsibility for those exclusive control areas that are part of the common area.

Townhouses and PUDs (planned unit developments) are slightly different. Townhouses are usually two-story condominiums with common walls shared with the adjoining townhouses. A few townhouses include ownership of the land beneath each townhouse, but many do not include the land that is owned as a common area by the HOA. However, if the townhouse is part of a PUD, then the homeowner usually owns the land beneath their unit. Either way, the HOA is responsible for the townhouse exterior maintenance, just as it is for traditional condominiums. Of course, individual townhouse and PUD owners are responsible for their interior maintenance, such as a dripping faucet or a plugged toilet.

There is much confusion over townhomes that are legally condos. Please make sure prior to viewing townhomes that the legal description on tax records is lot/block NOT CIC. If it is a CIC it is legally a condo even though marketed as a townhome. There is a link to the tax records on all online MLS links. Or you can go directly to the county website. Often times the listing agent will incorrectly state FHA/VA financing available because they haven’t done there homework. We get numerous clients who fall in love with a townhome that is legally a condo and not FHA approved prohibiting them from purchasing. If it is a CIC you will then need to check here https://entp.hud.gov/idapp/html/condlook.cfm to make sure it’s FHA HUD approved. You aren’t done yet, then you must make sure to check the expiration date and the concentration percentage. There cannot be more than 51% FHA concentration in any one development.

MN HomePath mortgage 3% Down No Mortgage Insurance

Clients now are able to access Fannie Mae’s extensive REO portfolio with streamlined, online access to HomePath Mortgage financing. HomePath Mortgage provides special financing terms exclusively for Fannie Mae real-estate-owned properties and can deliver distinct advantages in a down market:

Search for homes here www.homepath.com

Fannie Mae to pay 3.5% in closing costs through June 30, 2011

Low down payment and flexible mortgage terms

Available for Owner-Occupied, Second and Investment Properties

Down payments as low as 3%

No appraisal fees No Mortgage Insurance required

FHA VA Mortgage Disputed Tradeline Credit Accounts

Disputed Tradelines update to policy

The FHA TOTAL Mortgage Scorecard User Guide states that the loan casefile must be manually downgraded to a Refer recommendation and the loan must be reviewed by a Direct Endorsement (DE) underwriter if the borrower is disputing any credit accounts or public records. As a result, the following new message will be issued on all FHA loan casefiles to remind lenders of this requirement, but the recommendation will not be changed to a Refer due to this message:

If the credit report reveals that the borrower is disputing any credit accounts or public records, the mortgage loan application must be referred to a DE underwriter for review

See our page on disputed credit accounts.

Disputed Credit Accounts Fannie Mae Freddie Mac FHA HUD VA USDA

Recently, Underwriting guidelines have changed. You can no longer have a disputed account on your credit report and get approved for a mortgage. It must be removed, in order to get approved. When you have a disputed account it is taken out of the scoring model, causing the underwriter to not get a fair and complete picture of your credit situation. You must get this disputed account removed before the file goes into underwriting. The process of removing a disputed account can take 30-60 days. Here is my suggested process to remove a disputed account:

First contact the creditor and make sure that they in fact have it in their system as disputed. If they do not, then have them mail/fax a letter stating “this account #123 is not in a disputed status” If it is disputed verbally ask that they “undispute” the account and mail you a letter. If they refuse revert to the following instructions.

  1. Write a letter to the credit agency asking them to remove the language stating the disputed account.  Please understand that the process of investigating the account can take 30 days in itself.
  2. At the same time that you are doing #1, you will also want to write a letter to the creditor(that you are disputing) stating “that this account is no longer in dispute” and to remove it.
  3. The next step is to WAIT! You do not want to hound the creditor or agency, or send more then one request. When you send another request it can start the process all over.
  4. Pull a new credit report 35-40+ days after you do #1 and #2. At this time hopefully it shows the account is no longer in dispute.

Fannie Mae, Freddie Mac and HUD(FHA) have all adopted this new guideline.  It is possible to get an exception if there is just one account in dispute or on a FHA loan(if there is more then one). Keep in mind that if this disputed account is not caught until a file is in underwriting, it could cause your closing to be delayed or worse case you not getting approved.

Under the Fair Credit Reporting Act, consumers are guaranteed the right to dispute erroneous information on any account in their credit files. Once a consumer challenges that information, a notation to this effect must be made on the file. As long as it remains, credit-scoring systems due to new FACTA laws will not factor the disputed account into the computation of the consumer’s score.