I swear on my dog, I found money for loans!
No. Not in the couch. And not at the pawn shop either.
See, it seems there are a lot of frustrated loan officers in the Twin Cities these days. And they have nothing to do but call and or/write to every real estate agent they’ve ever met.
Believe it or not, they aren’t frustrated by their inability to get money to lend people for houses. To the contrary.
They’re actually frustrated because they actually HAVE money to lend and nobody seems to believe them.
For example, last week I received an e-mail from Burnet Home Loans. It read: “First, frankly we have access to more funds to lend than we can actually use! Our warehouse facility has a $350 Million capacity. Given that most loans cycle through the warehouse in 15 days our group effectively has access to $700 Million a month! This morning we were only using a fraction of the line.” ), I received a letter today from Vern Atwater over at Wells Fargo. It read: “There is plenty of money available for FHA loans (up to $365,000 locally) as well as conventional, conforming loans up to $417,000. It is true that the required documentation is more extensive than it used to be, but it is about the same as it was 20 years ago.”
Of course, those figures represent single family limits. In Hennepin and Ramsey county, FHA loan amounts are available for duplexes in amounts up to $467,500. Triplexes are capped at a $564,800 mortgage amount, and four-plexes at $701,900.
Burnet Home Loans adds that they still have more than 450 loan products to offer owner occupants.
So why does the public think money’s not available? True, it is tougher to get. Well, sort of. It seems you now have to be able to actually prove you have a job and something of a down payment in order to qualify. Nonetheless, it’s important to remember the down payment amount for an owner-occupied FHA loan is just 3 percent until January 1, 2009, at which point it increases to just 3.5 percent.
For the time being, money is a bit tighter for investors. Mortgage insurance companies are requiring lenders to secure a 10 to 20 percent down payment before they’re willing to insure a loan. In light of the wildly speculative nature of the market the past few years, it makes sense that for the time being, they would be more cautious.