Congress Approves Broader PPP Loan Terms
Congress recently approved a bill to add more flexibility to the Paycheck Protection Program. Instead of the original eight week period, borrowers now have twenty-four weeks to disperse their loan funds in order to have them forgiven. In addition, the amount of money that must be directed towards payroll has been reduced from 75% to 60%. The remainder can be used for expenses such as utilities, rent, or mortgage interest. Independent contractors and self-employed will have an amount equal to twenty-four weeks of their 2019 net earnings with a cap of $15,385 forgiven. Under this new bill PPP borrowers will have until the end of the year to use their funds, but the program is only accepting new applications until June...Fannie Mae Issues Lender Letter for Self-Employment Income
Last week, Fannie Mae issued a lender letter containing additional requirements for self-employed people looking for a home mortgage loan. Income from a business affected by changing economic conditions is not necessarily ineligible for use in qualifying a borrower for a home mortgage loan, but additional information will be required to determine if the income is stable. As of June 11th, lenders will be required to follow these new standards when qualifying a borrower for a home mortgage loan. The documentation now required by Fannie Mae includes a year-to-date profit and loss statement reporting revenue, expenses, and net income as well as the two most recent depository account statements. If these two documents do not support each other, additional statements or other documentation to support the year-to-date profit loss statement must be...Metrics Show Housing Market Seemingly Rebounding from COVID
Quite a few economic metrics in recent weeks can lead one to believe the housing market may be rebounding from the COVID-19 drop. The beginning of the flattening of the curve, the end of most stay-at-home orders, the 10-year yield approaching 1%, the decline of credit stress, and data from hardest-hit sectors starting to trend up are all positive signs things may be returning to normal. All of these metrics are reason for optimism considering the housing market and economy as a...Fannie Mae and Freddie Mac Forbearance Guideline Update
The Federal Housing Finance Agency has recently announced that Fannie Mae and Freddie Mac will now allow borrower’s who went into COVID-19 induced forbearance to refinance their loan or buy a new home as long as they have made three straight monthly payments after their forbearance ends. In addition, last month Fannie Mae and Freddie Mac announced that they would begin buying loans that went into “first-payment forbearance”. This would mean loans where the borrower went into forbearance within the first month of the loan closing could be purchased by Fannie Mae and Freddie Mac. This policy was set to expire at the end of May, but the FHFA decided to extend it through the end of August...Mortgage Rates Hit Another All-Time Low
For the sixth consecutive week, the amount of people applying for loans to purchase homes has risen. According to Freddie Mac, the 30-year fixed-rate mortgage has hit its lowest point since they’ve started recording rates, resulting in the higher number of loans. The previous record low for interest rates was at the end of April. This now marks the third time in 2020 that the mortgage market has recorded a historical low for interest rates. One factor leading to these low rates is the decreased financial volatility of the market in recent weeks. Consumers looking to buy homes in the coming months should try to take advantage of these low rates and judging by the uptick in purchase applications, they seem to be doing...Connect With Us
