At the end of 2021, the FHFA released new loan limits which is great news for home buyers in CA and Los Angeles specifically, where the cost to buy and own a home is significantly higher.
How Does this Affect me as a Los Angeles Home Buyer?
- Put less money down – as little as 3% in some scenarios
- It’s easier to qualify – higher debt-to-income ratios
- Self-employed buyers become easier to qualify
- Condos, single-family homes, and income property become options for those putting 5-15% down.
- You can buy a condo/single family home up to purchase price $1,021,894 with as little as 5% down. See below for more details.
- Lenders can perform computer-generated underwriting, in most cases, which will give you a great idea if you can get the loan before you even make an offer.
For Condos & Single-Family Homes: as little as 3% down for conforming loans up to max $667,216 purchase price; 5% down for conforming high balance loans up to $1,021,894 purchase price; 3.5% down for FHA loans up to $1,006,010 purchase price.
For Duplexes - Income Property - 2 Units: as little as 15% down for conforming loans up to max purchase price of $974,941; 15% down for conforming high balance loans up to $1,462,411 purchase price; 3.5% down for FHA loans up to $1,288,134 purchase price.
For Triplexes - Income Property - 3 Units: as little as 15% down for conforming loans up to max purchase price of $1,178,411; 15% down for conforming high balance loans up to $1,767,617 purchase price; 3.5% down for FHA loans up to $1,556,969 purchase price.
Does Putting 5% Down Decrease my Chances of Getting an Accepted Offer?
With conforming loans, most lenders can perform computer-generated underwriting for the borrower/buyer before they even make an offer. If the underwriting produces an approval, this can be provided to the Seller with your initial offer presentation and demonstrates that you will be able to get the loan. This is extremely helpful when competing against multiple offers.
Are Buyers Taking Advantage of These Loan Programs?
Jagger is having his preferred lender run these computer-generated approvals for all his clients that can qualify for the conforming loan programs. It increases the chances of his offer being accepted and decreases the loan contingency. Most notably, recent clients who bought in Hawthorne, Culver City, Mar Vista have been able to take advantage of this program with Jagger. First time buyers at technology companies that can come up with 5% can now buy homes and Jagger is making sure they understand the process and timing of capitalizing on this program and still historically low interest rates.
Please consult a lender for applicable rates, your individual financial position, verifying the down payment amount and loan amount, as well as your ability to qualify. For lender suggestions, please contact Jagger who can send you a list of several highly professional lenders
and mortgage brokers.