Washington State Mortgages, Made Clear. Buying or Refinancing? Let's find the right loan together.
Not all mortgage loans are the same — and choosing the right program can make a significant difference in your payment, qualification, and long-term financial flexibility.
This section covers the most common and specialty mortgage programs available to homebuyers and homeowners, including:
Understanding eligibility guidelines, loan limits, credit requirements, and program benefits allows you to compare options strategically rather than relying on headlines or general advice.
As a Mortgage Advisor with over 25 years of experience, I help clients evaluate which program best aligns with their income, assets, and long-term plans.
Explore the programs below to better understand your options.
⚠ Program Ended October 2014
The Fannie Mae HomePath Mortgage was retired in October 2014. This post was the updated version at the time — but both it and the original are now historical. Fannie Mae and Freddie Mac foreclosures are still available to buy today using standard mortgage programs. See the fully updated HomePath guide for what’s available now →
On last week’s State of the Union Address, President Obama announced a plan to help underwater homeowners who do not qualify for a Home Affordable Refinance. In order to qualify for a Home Affordable Refi (aka HARP 2.0) the home owner’s mortgage needs to have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009 and meet other qualifications. If the home owner currently has a jumbo loan, they are instantly disqualified for HARP 2.0. since jumbo mortgages are non-conforming (not Fannie or Freddie programs). HARP is also restricted by existing conforming loan limits and in the greater Seattle area, the current conforming loan limit is $506,000. Even if you have a conforming loan amount of $567,500 (last year’s conforming loan limit in Seattle), current HARP guidelines limit you to a $506,000 loan amount.
President Obama’s proposal is to help underwater home owners who have made their mortgage payments on time and who do not qualify for HARP 2.0 is to allow them to have an FHA insured mortgage without an appraisal. FHA insured mortgages have different loan limits than conforming. In the Seattle area, the FHA loan limit is $567,500. Obama’s new refi program, should it come to fruition, will be limited to FHA loan amounts.
FHA mortgages are a great program, however they’re also very expensive when compared to conventional loans. This is because they have both upfront and monthly mortgage insurance fees, which are constantly being raised by Congress. FHA mortgages have both upfront and monthly mortgage insurance regardless of the loan to value of the property.
As of 8:30 this morning, an FHA rate on a loan amount of $567,500 in Seattle – Bellevue with a 720 or higher credit score is 3.750% for a 30 year fixed rate (apr 4.767). Principal and interest with the financed UFMIP is $2,654.46 and the monthly mortgage insurance premium is an additional $515.85 for a total (PIMI) payment of $3,170.31, not included property taxes and insurance. This PIMI payment equals an interest rate in the low-to-mid 5% range if you compare it to a conventional mortgage.
This program is also costly as Obama plans to pay for it by charging banks additional fees and we all know that this trickles down to the consumer. The Temporary Payroll Tax illustrates how banks have increased mortgage rates AND the cost to extend a rate lock commitment.
It’s reported that the new program will not require an appraisal or proof of income and will be available for primary residences only. Employment will need to be verified and mortgage payments must have been made on time for the last 6 months. Although this is “Obama’s Refi Plan”, we have to wait and see if Congress approves it and how the big banks and lenders will embrace this program.
If you currently have an FHA insured mortgage, you don’t need to wait and see if Obama’s refi plan will help you. You may already be able to refinance with an FHA streamlined refi without an appraisal.
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If you are interested in a mortgage for a home located anywhere in Washington state, I’m happy to help you! I have been originating all types of loans at Mortgage Master Service Corporation since 2000. Click here for your no-hassle mortgage quote on your Washington property.
UPDATE: HUD HAS ANNOUNCED THIS WAIVER WILL BE EXTENDED THROUGH DECEMBER 2014.
HUD recently announced they will extend their anti-flipping waiver through December 2012. From HUD:
In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity…[HUD] will extend FHA’s temporary waiver of the anti-flipping regulations.
With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days… The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA. All other terms of the existing Waiver will remain the same. The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers. The Waiver continues to be limited to sales meeting the following conditions:
In addition to what HUD covered in their email on Friday, the waiver also specifies that:
When a home is being resold 20% or higher than what the seller purchased the property for in less than 90 days, often times a second appraisal will be required and the seller will need to show documentation to support the increased value in the home, such as receipts for the improvements made. A property inspection report will also be required by the lender to assure the quality of the improvements made to the property. Any health or safety issues disclosed by the property inspection will need to be corrected.
If a home has been re-sold withing 91-180 days at more at 100% or more than the seller’s acquisition cost, the same conditions will apply. If a second appraisal is required, the home buyer is not allowed to pay for it per HUD. Thanks to LO Comp, which the Fed passed in April, your friendly mortgage originator cannot use their commission to pay for this cost either.
Investors who are reselling in a short period of time for a much higher amount than their acquisition cost should be prepared for the cost of the second appraisal when the buyer is using FHA for financing. Folks should also retain detailed records of improvements (including all receipts) when they’re planning to quickly resale a home. The seller’s acquisition cost is the sales price of the home, plus the seller’s closing cost, including real estate commissions. It does not include any repairs.
If you are considering buying a home located anywhere in Washington State, I’m happy to help you! Click here for a mortgage rate quote for homes located anywhere in Washington. I’ve been originating home loans at Mortgage Master Service Corporation since April 2000, including FHA insured loans.
Please visit our FHA Guide that features current FHA loan limits for homes located in Washington state.
A few days ago, HUD confirmed the 2012 FHA Mortgage limits which have been restored to the higher “temporary” higher loan limits effective November 18, 2011. This morning, HUD’s site is reflecting the revised loan amounts.
Here are the 2012 FHA loan limits which are retroactive for case numbers obtained November 18, 2011 or later for homes located in Washington: [Read more…]
I just received notice from HUD announcing higher FHA loan limits are to be retroactive for case numbers issued November 18, 2011 and later via Mortgagee Letter 2011-39. This means that in the greater Seattle area, FHA loan limits will be restored to $567,500 instead of $506,000. With that said, when I pop over to HUD's loan limit site, it's still reflecting $506,000 for King County (as of the time of publishing this post).
I did tweet to HUD earlier today asking them when the loan limits will be updated.
Perhaps everything will be updated in the morning and I shouldn't be blogging at 10:39 in the evening… when I receive an email like this from HUD at 9:55pm, I consider it "breaking news".
I'll have more information soon.
