Category Archives: Mortgage Programs

Calmer Market

The mortgage market has calmed down somewhat since last week’s Fed meeting, which caused a negative reaction for mortgage rates. Neither the Bank of Japan meeting early this week nor the recent economic data had much impact. Mortgage rates ended the week lower.

Although they did not affect mortgage rates much, a couple of economic reports released over the past week were notable. On the surface, Thursday’s report on orders for durable goods appeared to reflect weakness in the economy. Durable goods are products which are expected to last more than three years. The overall figure revealed that orders for durable goods in November declined 4.6% from October. The decline was mostly due to a drop in volatile aircraft orders, however. Investors also like to look at a core indicator of business investment called nondefense capital goods excluding aircraft, and this component showed a nice increase of 0.9% from October.

The core PCE price index is the inflation indicator favored by the Fed. Core PCE excludes the volatile food and energy components. November’s data released Thursday contained a couple of offsetting surprises. First, October’s results were revised higher to an annual rate of 1.8%, which was the highest reading since October 2012. By contrast, November’s data showed that core PCE inflation unexpectedly was just 1.6% higher than a year ago. While the average of the last two months matched the expected level of 1.7%, this report leaves investors wondering if inflation is trending lower.

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Loan Limits Will Increase for Conventional and FHA Loans in 2017

The conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will increase from $417,000 to $424,100 for one-unit properties. The loan limit for one-unit homes in designated high-cost areas will increase to $636,150.

The new loan limits affect mortgages originated on or after January 1, 2017.

The limit on two-unit properties will increase to $543,000, three-unit properties will increase to $656,350, and four-unit properties increase to $815,650. These new loan limits apply to the lower 48 states, the District of Columbia and Puerto Rico. Higher amounts are in effect for Alaska, Guam, Hawaii, and the U.S. Virgin Islands.

A list of the 2017 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found here.

It was also recently announced that FHA loan limits for one-unit properties will increase to $636,150 in high-cost areas and $275,665 in low-cost areas. All of the new FHA loan limits can be found here.

Loan limits are calculated on a yearly basis.

If you would like to learn more about how these changes might affect your customers, please call me today.

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Self-employed Borrowers May Qualify to Buy with Their Most Recent Tax Return

Self Employed Mortgage Loan

Self-employed borrowers can use their most recently filed tax returns to qualify for a home loan. This is a change from most programs, which require returns from the previous two years, using an average of the two years.

Buyers who may have experienced an isolated period of lower income prior to the most recently filed tax year may benefit by having the opportunity to qualify for a larger loan amount.

Program highlights include:

  • Self-employed borrowers with a minimum of two years in the current owned business
  • Owner-occupied, second-home or investment property purchases
  • 30% down payment required for loan amounts to $1.5 million on owner-occupied, single-family residences in CA*
  • Loan amounts to $3.5 million with 40% down payment on owner-occupied, single-family residences

The One-Year Tax Return Program lets you work with even more borrowers than those traditionally employed with W-2 earnings. Don’t turn these potential clients away. I can review your clients’ needs and help them navigate their financing options.

Contact me by phone or email to see how many of your clients could benefit from this or any of my other loan programs.


Informational materials for Builder and Real Estate Professionals Only. Materials are not intended for use by or distribution to consumers as defined by Section 1026.2 of Regulation Z, which implements the Truth-In-Lending Act.

For this loan program we are a Mortgage Broker only, not a mortgage lender or mortgage correspondent lender. We will arrange loans with third-party providers but do not make loans for this program. We will not make mortgage loan commitments or fund mortgage loans under this program.

Loan program not available in all states. Please speak to a Prospect Mortgage Loan Officer for more information.

*For owner-occupied, single-family residences located outside of CA, LTV is up to 70% for loan amounts to $1 million. (1216-3381) LR 2016-546B

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