HBA member South State Bank announced this week a $100 million initiative to offer mortgages to consumers in low- to moderate-income and minority areas.
The $100 commitment, which is planned over a five-year period, will target the bank’s combined markets following its merger with Park Sterling Bank, another HBA member. The combined bank will serve South Carolina, Georgia, North Carolina, and Virginia, with a strong presence in the Greater Greenville area.
The Federal Housing Finance Agency today announced that the maximum baseline conforming loan limit for mortgage loans acquired by Fannie Mae and Freddie Mac in 2017 will increase to $424,100 from $417,000. This will be the first increase in the conforming loan limit since it was raised to $417,000 in 2006.
The Housing and Economic Recovery Act of 2008 established $417,000 as the baseline loan limit and mandated that after a period of price declines, the baseline loan limit would not be permitted to rise until home prices had returned to pre-decline levels.
The loan limit will rise 1.7% in 2017 because the Federal Housing Finance Agency has determined that the average U.S. home value in the third quarter of this year increased 1.7% above its level in the third quarter of 2007.
Higher loan limits will be in effect in higher-cost areas as well. In areas where 115% of the local median home value exceeds the baseline loan limit, the maximum area loan limit will be higher. The new ceiling loan limit in high-cost markets will be $636,150 (150% of the $424,100) for single-family properties. The previous ceiling was $625,500.
Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $636,150 for single-family properties, but actual loan limits may be higher in some specific locations. A list of the 2017 maximum conforming loan limits for all counties and county-equivalent areas in the country may be found here.
The Federal Housing Finance Agency (FHFA) has announced that the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2016 will remain at $417,000 for one-unit properties in South Carolina. That amount is the conforming loan limit for the majority of the county. The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 (HERA) and are calculated each year.
HERA sets maximum loan limits as a function of median home values. In 39 high-cost counties, loan limits will rise because those counties experienced increases in local home values. These metro areas include several west-coast counties as well as Boston, Denver, and Nashville.
The Housing and Economic Recovery Act of 2008 (HERA) established the baseline loan limit at $417,000 and mandated that after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels. The $417,000 loan limit will stay the same for 2016 because FHFA has determined that the average U.S. home value in the third quarter of this year remained below its level in the third quarter of 2007.
HERA provides for higher loan limits in high-cost counties by setting loan limits as a function of area median home value. Although the baseline loan limit will be unchanged in most of the country, 39 specific high-cost counties in which home values increased over the last year will see the maximum conforming loan limit for 2016 adjusted upward.
Although other counties also experienced home value increases in 2015, after other elements of the HERA formula — such as the statutory ceiling and floor on limits — were accounted for, these local-area limits were left unchanged.
A list of the 2016 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found here.
Responding to concerns from the Consumer Financial Protection Bureau, Wells Fargo announced on July 29 that it is voluntarily discontinuing affiliated marketing agreements with builders and realtors. In general, these type of agreements benefit both builders and lenders. Lenders receive business from builders who refer their buyers and because the lender is familiar with the builder, it helps to make the home buying lending process proceed more smoothly.
While these marketing agreements are legal, Wells Fargo has acted unilaterally to take this action to avoid any appearance of paying for referrals.
The Wells Fargo announcement is expected to have a limited impact on our industry, as the vast majority of our members do not have such agreements with Wells Fargo. However, if the Wells Fargo action causes other financial institutions to follow suit, this could affect builders who have similar agreements with other lenders.
Note that Wells Fargo is not a member of the Home Builders Association of Greenville.
The U.S. Department of Agriculture’s Rural Housing Service (RHS) is increasing its upfront fee paid by borrowers on a no-downpayment loan from 2% to 2.75% effective Oct. 1. According to an RHS official, the difference in monthly payments is $4.83 for a typical $135,000 loan.
RHS is permitted to raise this fee up to 3.5% under federal statute, but RHS says it does not anticipate any additional increases in its guarantee fee at this time.
RHS is raising its upfront fee to 2.75% in order to keep the program self-funding and to avoid having to request appropriations from Congress.