Posted 03/14/2017

Gina Pogol writes about personal finance, credit, mortgages and real estate. She loves helping consumers understand complex and intimidating topics. She can be reached on Twitter at @GinaPogol.

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2017 Mortgages Are Different: Fannie Mae Changes You Need To Know

2017 mortgages

Gina Pogol

The Mortgage Reports Contributor

Fannie Mae And Freddie Mac: New Rules For 2017 Mortgages

During late 2016 and early 2017, Fannie Mae and Freddie Mac made some changes to their processes. Since these two organizations back about half of all mortgages in the US, it's a big deal. Here are some important things to know about conforming 2017 mortgages.

Verify your new rate (Nov 23rd, 2017)

You May Not Need An Appraisal

For some refinances, you may not need a property appraisal. Your lender may give you a PIW, or Property Inspection Waiver. To qualify, the loan must be underwritten electronically through Fannie Mae's Desktop Underwriter (DU) system.

Fannie Mae possesses appraisal information for millions of properties. It uses this data to check your home value. If the software decides your home value is acceptable, you're good to go. No appraisal needed. DU issues decisions within minutes, so you know right away if you qualify for a waiver.

Freddie Mac has a similar program called Home Value Explorer. It's available for refinance loans underwritten by its Loan Prospector (LP) program.

Loan Limits Are Higher

More homebuyers can get 2017 mortgages without paying higher jumbo interest rates. Because of rising property values, the Federal Housing Finance Agency (FHFA) raised standard conforming loan limits from $417,000 to $424,100.

This is the first increase in a decade.

The standard loan limit applies to most of the US. However, in designated "high cost" areas, the FHFA set limits at 115 percent of the local median home value. That maxes out at 150 percent of the standard limit, or $636,150.

Homes In Wetlands May Not Qualify

Freddie Mac made this change effective December 2016, so 2017 mortgages won't be approved if coastal tideland, wetlands or setback laws apply. For instance, if by law, you would not be allowed to rebuild a damaged or destroyed home, you can't finance your property with a Freddie Mac loan.

Fannie Mae's eligibility guidelines don't specifically exclude wetlands, but additional restrictions and processes apply to "environmentally sensitive" areas.

Verify your new rate (Nov 23rd, 2017)

Solar Panels Get Special Treatment

Starting in March 2017, Freddie Mac mortgage guidelines will be kinder to homes with solar panels, whether owned by the borrower or leased from a third party.

Its guidelines are being updated to allow underwriters to exclude solar panel lease payments from applicants' debt-to-income ratios. New updates will indicate how the lease must be structured to qualify.

HARP Extended And Replaced In 2017

The HARP program was created to allow eligible borrowers with Fannie Mae or Freddie Mac loans to refinance, even if their loan balance exceeds their property value.Those eligible for the Home Affordable Refinance Program (HARP) have until September 2017 to complete it before the program terminates.

However, in October 2017, HARP will be replaced by a high loan-to-value refinance program. This option has fewer restrictions than HARP. For example, the old cutoff date (June 1, 2009) won't apply.

This combination of HARP ineligibility and negative equity might be the reason that nearly one-fourth of mortgage borrowers are still paying five percent or higher, according to CoreLogic. 2017 mortgages could offer sweet relief to these homeowners.

DU 10.0 May Cut Processing Time And Costs

Fannie Mae's latest edition of its Desktop Underwriter software features a validation service for assets, employment, and income. Lenders can opt into DU Validation Service and automatically verify your application information.

This may allow them to close your purchase or refinance mortgage faster. And hopefully, at a lower cost to you.

What Are Today's Mortgage Rates?

Current mortgage rates are slightly lower following the end of the holiday season. However, mortgage interest rates are constantly updating. The offers you receive depend on your risk profile. You can also pay less by getting more quotes from lenders and shopping aggressively.

Verify your new rate (Nov 23rd, 2017)

Gina Pogol

The Mortgage Reports Contributor

Gina Pogol writes about personal finance, credit, mortgages and real estate. She loves helping consumers understand complex and intimidating topics. She can be reached on Twitter at @GinaPogol.

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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2017 Conforming, FHA, & VA Loan Limits

Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)