Maui Real Estate Blog

Fannie Mae and Freddie Mac Continue to Tighten Loan Guidelines

I received an important update from several of my lending partners today. The change will definitely have an impact on homebuyers and sellers. So what are these changes:

  1. Stated Income Loans will officially be a thing of the past, at least for Fannie Mae and Freddie Mac loans. There may be some financial institutions that continue to provide these as portfolio loans.
  2. Debt to income ratios will be tightening.
  3. Second Homes will no longer be a “loan category” under Fannie Mae and Freddie Mac. They will officially lend on “primary residences” or “non-primary residences”. Interest rates for non-primary residence loans will be at least 75 basis points higher than current rates.

I will admit that the changes in loan guidelines are not a surprise to me. Two years ago it was simply too easy to get a loan. Now the pendulum may swinging the other way. I believe there are a few valuable takeaways from this important news for both buyers and sellers.

For Sellers, your audience of qualified buyers continues to shrink. Be sure you price your property carefully.

For Buyer’s, if you are considered a marginal buyer today, you may want to pow-wow with your lender and your Realtor and put together a strategy to make an offer ASAP. Or you may choose to wait until your financial situation improves.

Pete Jalbert

More from our Blog

What Does the end of Forbearance Mean for Borrowers and Maui The Real Estate Market?

The initial economic impacts of Covid-19 included lost jobs and…

Read More

Maui County Property Tax Rates for the 2021/2022 Fiscal Year

July 1 marks the start of the new fiscal year…

Read More

Support Maui Farmers

Maui Farmers need support now more than ever. With many…

Read More