This is great news for first time home buyers that might have gotten their loan declined due to higher interest rates. FHA has relaxed their debt to income thresholds...
VHDA DPA Grant Program Changes:
VHDA continues to monitor the use of our DPA Grant Program. We appreciate our lender’s flexibility in implementing the recent changes to preserve the resources and ensure predictable funding for borrowers planning to purchase homes in the future. While it is impossible to guarantee the long term funding of any program, we are doing our best to assess program demand to create a sustainable resource to meet the needs of Virginia’s first time homebuyers. The program changes implemented in September did address the demands on the program funding, however, feedback from our lenders indicated that the reduction in the debt to income and increased credit score requirements significantly impacted the ability for many borrowers to take advantage of the program.
Therefore, in an effort to provide more flexibility for potential borrowers and create greater consistency in our program guidelines, we will be changing the maximum debt to income ratio and minimum credit score requirements for the DPA Grant program:
Maximum Debt to Income: 45.00%
Minimum Credit Score: FHA loans 620 Fannie Mae loans 660
These changes will keep the debt to income ratio and credit score requirements for loans with grants consistent with other VHDA programs. In addition VHDA will allow manual approvals that receive a refer decision on FHA loans with the DPA grant. The lender is fully responsible for meeting all FHA manual underwriting requirements including cash reserves and any requirement for compensating factors. VHDA will not purchase loans or fund the grant for loans that do not fully comply with FHA guidelines.
The maximum grant amount noted in our September announcement will remain the same:
Maximum grant amount is; 2.50% with VHDA FHA loans
2.00% with VHDA Fannie Mae loans.
The changes to the DPA Grant are effective immediately and will also apply to existing grant reservations.
Increase to Fannie Mae Loan Limits:
The maximum loan amount for VHDA Fannie Mae programs is being increased to the new Fannie Mae conforming limit of $424,100. The change will be effective with new locks beginning Friday, January 13, 2017. Should you need to lock a loan using the higher loan limit prior to Friday, you may lock the loan at the current lower limit of $417,000 and then change the loan amount after the system change date.
VHDA is in the process of updating the program guidelines, promotional materials and web information referencing the above changes. Please feel free to contact your assigned VHDA Business Development Officer or VHDA’s Underwriting Department with any questions.
Author:DJ Jenkins Phone: 703-625-1347 Dated: January 16th 2017 Views: 393 About DJ: If You're in the Market for buying or selling your home, You Need a Great Real Estate Agent. With th...
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