Non-Conforming Home Loans in California

A residential mortgage that does not conform to the loan purchasing guidelines set by the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation is called a non-conforming loan. The significant difference between a conforming and a nonconforming loan is the loan’s limits. Non-conforming loans in California or jumbo loans have higher limits, and therefore different guidelines because the mortgage can’t be sold to Fannie Mae, Freddie Mac, FHA, and VA.

Non-Conforming/Jumbo Guidelines

Eligible Options

Non-Conforming/Jumbo ARM Features:

  • 5/1, 7/1, 10/1 ARM (adjustable rate mortgage) Fully Amortizing, 30-year term
  • Margin: 2.25 (the difference between the total value of securities held in an investor’s account and the loan amount from a broker)
  • Floor: 2.25 (minimum amount of money that a lender is willing to lend in order to enable the builder to begin the construction of a building that is to be occupied by tenants)
  • Caps 2/2/5 (Initial, Subsequent, Lifetime) 5/1, 7/1, 10/1 ARMs Caps 5/2/5 allowed on 7/1, 10/1 ARM
  • Index: 1 Year LIBOR (benchmark used to adjust interest rate for securitized loans. A LIBOR-based loan normally resets on a monthly basis and impacts the payment accordingly)
  • Assumable
  • No Conversion Option
  • Qualifying Rate: 5/1 ARM, qualify with greater of the fully indexed rate or the Note rate +2%. 7/1 ARM & 10/1 ARM, qualify with the greater of the fully indexed rate or the Note

Eligible Borrowers

  • First-Time Homebuyers is defined as a borrower who has not owned a home in the last three years. For loans with more than one borrower, if either party has owned a home in the last three years, first-time homebuyer requirements do not apply. Maximum loan amount is $1,000,000.
  • 720 Minimum FICO score
  • No gift funds allowed
  • Primary residence only
  • US Citizens
  • Permanent Resident Aliens with evidence of lawful residency (Must be employed in the US for the past twenty-four months.)
  • Non-Permanent Resident Aliens with evidence of lawful residency are eligible with the following restrictions:
    • Primary residence only
    • Maximum LTV/CLTV/HCLTV 75%
    • 20, 25, 30-year fixed rate only
    • No other financed properties in the US
    • Unexpired H1B, H2B, E1, L1 and G Series Visas only. G Series Visas
    • must have no diplomatic immunity.
    • Credit tradeline requirements must be met, no exceptions.
    • Borrower must have a current twenty-four-month employment history in the US.
  • Documentation evidencing lawful residency must be met.
  • Illinois Land Trust.
  • Inter Vivos Revocable Trust (agreement between the individual creating the trust and the person or institution that is to manage the assets held in trust)
  • All borrowers must have a valid Social Security Number.

There are options for loans that do not meet Fannie Mae and Freddie Mac requirements. Check eligibility and loan selections to choose the right option for your loan.

Golden State Mortgage Can Help

At Golden State Mortgage, we are a California-based mortgage company. We want to help you through every step of financing your new home. Fill out the quick contact form or call Golden State Mortgage today at 1-800-536-8171 to speak with one of our California mortgage specialists and get a free good faith estimate.

 

 

 

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