Property Types

• SFR / Condo / Townhouse / PUD
• 2 Units
• 3-4 Units

Acceptable property types for Fannie Mae and Freddie Mac loans include single homes, condos, townhouses, and PUD’s. Other acceptable property types include 2 unit, 3 unit, and 4 unit dwellings.

Income Docs Needed

• 2 years taxes
• Last two pay stubs
• 3 months bank statements
• Source of down payment

For a salaried person, in general, you will want to be prepared to present 2 years federal income taxes, 2 recent pay stubs, and 3 recent bank statements, as well as the source of your down payment.

Debt Ratios

• 45% – 50% max full doc
• 45% – 50% max full doc  w bank statements

The debt-to-income ratio is the percentage of your gross monthly income that goes to paying your monthly debt payments. The DTI ratio is one of the metrics that lenders, including mortgage lenders, use to measure an individual’s ability to manage monthly payments and repay debts. This ratio is generally maxed out at 45% – 50% for a Fannie Mae or Freddie Mac purchase loan. There are exceptions however.

LTV’s & Loan Amounts

• 97% to $822,375 – High Cost Areas
• 97% to $548,250 – Current max most areas

For 2021, the FHFA (Federal Housing Finance Administration) set the baseline conforming loan limit for 1 unit properties at $548,250 for Conventional financing (Fannie Mae & Freddie Mac) and up to $822,375 on high cost counties California. The maximum loan amounts are the 2021 Conforming Loan limits.

Benefits

• Market liquidity
• Indusry standard underwriting standards
• Low Rates

Fannie / Freddie Loans are the most common loan type due to the ease in which lenders can buy and sell these loans in the secondary market. Underwriting is the easy to understand and also common. Lastly, rates are the best the market has to offer.

Best Features

• Low down payments
• Best market rates
• Lower fico requirements

Appraisal Requirements

• (1) Appraisal per property for conventional loans 1-4 units.

Appraisal requirements are similar for most residential single family, condos, townhiuses, and PUD’s. The primary items of concern are condition of the home, condition of appliances, furnace, air conditioning, water heater, and other mechanicals. The size of the home and property, quality of landscaping, as well as the quality of roofing and foundation. Appraisal fees can range from $400 – $800 depending.

Notes:

Self-Employed Mortgage Loans are Non-Conforming loans that offer enhanced mortgage solutions and higher limits for loan amounts above the conforming loan limit of $548,250 for most U.S. counties.