First off.. Well done to Brian, Kris and Jeff (good stuff).. I can only stand so much of the ‘canned’ news coverage of the situation in So Cal.. I used to work 2 1/2 yrs in San Juan Capistrano (yes, while commuting from Northern Cal) as the “real estate guy” for an East Coast Tower company.. I know the Fallbrook area very well and hope everyone will continue to stay safe..
I heard from my Broker (a close friend and honest lender) @ Pride Lending Group that select banks are raising their current maximum loan amount on VA loans as a result of Ginnie Mae eliminating the restriction on the size of mortgage loans guaranteed by the Department of Veterans Affairs (VA) on Oct. 24th. The increased VA loan limits are expected to expand the availability of $0 Down loans to Veterans (with valid certificates of eligibility) by raising their current maximum loan amount to $1,000,000 plus the VA Funding Fee (for a maximum total of $1,033,000).
I know that there are a couple of experts on the panel in this field (I haven’t been involved in the retail lending side of the business since the early 90’s), can we confirm this? Does the VA still comprise a relatively small percentage of the available buyers? I would assume that this is another attempt (albeit a good start) to get the government involved in addressing the ‘credit crunch’ and move this market in a positive direction. One of my calls today involved a private builder looking to offload hundreds of finished lots at any price. Any attempt (by the gov’t) to address market perception has to be positive at this point, doesn’t it?
Steve Berg says:
Sean – I just recently heard this same thing from a mortgage broker in San Diego. If true, this is amazing. What would be much more effective, however, would be for the VA to drop their interest rates. There are few veterans who can afford a no down payment, million dollar mortgage or anything close. There are many who could benefit from a smaller loan at a much lower rate.
October 24, 2007 — 11:16 am
VA Loans says:
it’s about time they raised it. Now a lot of CA residents can purchase a home
October 24, 2007 — 12:04 pm
Anonymous says:
Actually, GNMA has no limit on the VA loan amount but VA will only insure up to $417,000. Any amount above $417,000 will require 25% from the Veteran.
Example: A Veteran want to purchase a $1,000,000 home. The maximum loan amount he could qualify for under VA would be $854,250 (Difference between $417,000 and $1,000,000 is $583,000 and 25% of that is $145,750). The Veteran would be required to put down $145,750 for a loan to value ratio of 85.43%.
One would have to compare the numbers. Would it be more beneficial to put almost 15% down and have a 1.25% to 1.5% funding fee or put almost 15% down and have single premium or monthly mortgage insurance (not utilizing a VA mortgage).
October 26, 2007 — 2:59 pm
Nas Man says:
I’ve been told by WellsFargo that they will start doing close to Zero down on VA loan upto 700K starting 19th of November. Close to meaning if the loan is higher than 417k Zero down than they will ask for very small amount of down payment. If they do give me this deal and its final I will submit my pose here 🙂 wish me luck.
November 21, 2007 — 10:39 pm
Sean M. Broderick, CCIM says:
Nas.. Good luck and let me know.. my partner is very much interested in finding out VA funding avenues..
November 22, 2007 — 10:55 am
Nas Man says:
I sure will Sean. I called them other day and the agent from Wells fargo said they have received an internal email that starting 19th they will start doing VA loans upto 700k but as this info is so new their computer system is not yet updated so he had to sent my info to under writer to get my paperwork done. I should find out next week. Will post my story here.
November 23, 2007 — 9:44 pm