Nick Pakulla - Mortgage Lender Loan Officer in MD, DC, VA

FHA Updates Loan Limits as of November 18, 2011

On November 18, 2011, the President signed into law H.R. 2112, Consolidated and Further Continuing Appropriations Act 2012 (HR2112). Section 238 of HR 2112 re-establishes the FHA loan limit at the higher of the dollar limit in Section 203(b)(2) or the dollar limit prescribed in Section 202 of the Economic Stimulus Act of 2008 for Forward mortgages.

Therefore, effective for all Forward mortgages with a case number assigned on, or after, November 18, 2011 through December 31, 2011, the loan limits referenced in Mortgagee letter 10-40 shall be in effect.

The Department will be issuing a Mortgagee Letter by mid-next week that will include more detailed guidance and applicable updated loan limit tables for 2012. We expect supporting system changes to be completed within that same time frame.

VA Funding Fees Revert Back to pre-change levels

FUNDING FEE UPDATE AS OF NOVEMBER 22, 2011:  On November 21, 2011, the President signed H.R. 674. Section 265 of the law raises funding fees to the pre-November 18, 2011 levels.  The fees specified in Section 265 are valid through September 30, 2016.

First Time Use

• < 5% down = 2.15%
• 5-10% down = 1.5%
• 10% or more = 1.25%

Second and Subsequent Use

• < 5% down = 3.3%
• 5-10% down = 1.5%
• 10% or more = 1.25%

Nick Pakulla

First Place Bank

Loan Officer

15400 Calhoun Drive Suite 170

Rockville, MD 20855

Direct: 301.585.RATE (7283) | Cell: 443.956.8774 | Fax: 301.560.6303

NMLS# 728211

Email:  NPakulla@fpfc.net

Apply now: http://www.firstplacebank.com/NickPakulla

It was just announced today that a bill has been approved that will raise the FHA (FHA only) mortgage loan limit back to $729,750 for the DC area and $560,000 for the Baltimore metro area.  Unfortunately, they did not raise the Fannie / Freddie conventional mortgage loan limit and they still remain at $625,500 and $494,500 respectively.  Although the conventional limits are not raised, this will still help buyers who don’t have 10% down and are looking to buy above the conventional limits.  

Below is the link to an article if you would like to read more about the change.  Remember, for borrowers with 10% down our bank’s 2^nd Mortgage can bridge the gap between conforming and true jumbo, and will be much more cost effective than going FHA (see example below).  Please call us with any questions.  Thanks and Happy Friday! 

http://www.bloomberg.com/news/2011-11-18/u-s-congress-votes-to-raise-top-limit-for-government-insured-mortgages.html 

Example – FHA with 10% down vs. First Place Bank second mortgage:

$800,000 purchase with FHA 10% down:
$720,000 financed @ 4.25% = $3,542 per month
FHA MIP = $660 per month ($0 going towards principal / not tax deductible)
Total = $4,202  

$800,000 purchase with First Place Bank Second Mortgage 10% down:
$625,500 first mortgage @ 4.25% = $3,077 per month
$94,500 second mortgage @ 7.25% = $645 per month (tax deductible and part of payment is going towards principal)
Total = $3,723 – much better option!

Thanks,
Nick 

Nick Pakulla
First Place Bank
Loan Officer 
15400 Calhoun Drive Suite 170
Rockville, MD 20855
Direct: 301.585.RATE (7283) | Cell: 443.956.8774 | Fax: 301.560.6303
NMLS# 728211
Email:  NPakulla@fpfc.net
Apply now: http://www.firstplacebank.com/NickPakulla