Appraisal Cheat Sheet
The appraisal process is subjective. There is no list of repairs that every appraiser will require. But these are the kinds of repairs an appraiser is likely to require.
There have been many changes to home loan products and guidelines since the onset of the Coronavirus in the US. Here's what you need to know:
Faster Appraisals
Guidelines have been loosened for most purchase transactions to allow for exterior only appraisals at least through the end of June. This means appraisals are coming back faster (no need to wait for access to the property) with little chance of repair conditions.
Mortgages in Forbearance
Fannie Mae and Freddie Mac recently announced waiting times for borrowers with mortgage payments in forbearance. Borrowers must make three months of on-time payments before they're eligible for a new mortgage loan. That's great news since the previous rule was one year!
Self-Employed Borrowers
Lenders are taking extra precautions to make sure self-employed borrowers will be able to afford their mortgage payments, despite potential COVID-19 closures and slowdowns. Lenders may request business bank statements to make sure current income is consistent with previous tax returns. And additional analysis will assess the demand for the product or service offered by the business, temporary restrictions on business operations, and business liquidity in light of current economic conditions.
While some lenders have reduced self-employed income across the board, we're very lucky that New American Funding hasn't taken this approach. Instead we're assessing each business individually using common sense underwriting principles.
Escrow Holdbacks
While renovation loans have largely disappeared since the onset of the pandemic, we're still allowing escrow holdbacks for repairs. In fact, we're giving customers longer to complete repair escrows than we did pre-pandemic. This has enabled us to put buyers into homes that need a little love to make them eligible for financing.
Down Payment Assistance
We're dedicated to providing financing for affordable housing in our community. And we're still originating down payment assistance loans to help low- to moderate-income individuals and families become homeowners. In 2019, we helped 35 first time buyers become homeowners. And in 2020, despite the pandemic, we've vowed to increase that number.
Portfolio Loans
While many non-QM and portfolio lending products have evaporated, we're still offering our internal portfolio program. This home loan allows self-employed and commissioned borrowers to use bank statements (instead of tax returns) to qualify, asset depletion, and jumbo loans (loan amounts > $510,400 in most areas). This program also allows a departure residence to be excluded from a borrower's debt ratio as long as it's listed for sale at loan closing.
We're Adding Staff
At New American Funding Port Townsend, we're committed to providing the best experience for our borrowers and referral partners - whether interest rates are 3% or 6%. In the last 30 days we've added a new loan officer and a transaction coordinator to our team, so we can meet the increased demand without sacrificing customer service. While we're thrilled to help so many homeowners refinance, purchases are our top priority. And purchase transactions always move to the front of the line.
As we near the 2020 half-way mark, we can definitely say it's been a wild ride! We are delighted to have helped so many in our community, during a time when they've needed it most. We're excited to continue to serve our referral partners. And we're eager to deliver innovative solutions and impeccable customer service during the next half of 2020, whatever it may bring. Thank you for being a part of our journey!
