| In March of 2008, H.U.D. (U.S. Department of Housing | | | | as well as selling the condos. This means that instead |
| and Urban Development) published new loan limits for | | | | of sitting down with the building's ownership and a large |
| FHA and GSE loans which were based upon median | | | | bank, as well as a real estate broker, a perspective |
| prices of homes. This was done as part of the | | | | condominium buyer in the area could sit down with one |
| Economic Stimulus Act put forth by the Bush | | | | person. This provides them an opportunity to have a |
| Administration. These limits are based on 125 percent | | | | broader range of lending options, as well as fewer |
| of the HUD published median prices, and although they | | | | headaches with all of the administration involved. |
| are temporary, they are often much lower than the | | | | This is the case for areas like Southern California, |
| home prices of many people. The HUD range is from | | | | where the median home prices are much higher and |
| $417,500 to $793,750 depending on where you live. | | | | where borrowers are having a hard time with Wall |
| Underwriting Guidelines | | | | Street lenders such as Wells Fargo, Citi and JP |
| The question remains, is every jumbo mortgage lender | | | | Morgan Chase. Condos, town home and community |
| dead? What it comes down to is underwriting | | | | developments may have ties to local lenders who are |
| guidelines. For large banks such as Bank of America | | | | more willing to offer a jumbo mortgage loan to a |
| and Wells Fargo, as well as the mega-mortgage loan | | | | family that meets their criteria. They may also be able |
| service companies Fannie Mae and Freddie Mac, there | | | | to offer alternative forms of lending to people who |
| are strict underwriting guidelines. This is due to their | | | | may not meet those criteria. |
| investors and federal restrictions. Also, with the new | | | | Overall, the Wall Street lending institutions are cutting |
| restrictions based upon the bank bailouts, any lender | | | | down on more out of the ordinary forms of |
| that took federal money is facing intense scrutiny from | | | | mortgages, and Fannie Mae and Freddie Mac are in |
| Congress, the Obama Administration and the general | | | | such debt that they have to be incredibly strict with the |
| public. | | | | home buyers they lend to. A jumbo mortgage lender |
| However, smaller banks and even some local banks | | | | that has a better, more intimate relationship with |
| have broader guidelines when it comes to underwriting, | | | | housing developments, condominium complexes and |
| making them the perfect fit for a jumbo mortgage | | | | town home developments might be a much better |
| lender. One great example is that there are condos in | | | | option for a jumbo mortgage. In the end, tightening |
| Southern California (where the real estate crisis hit | | | | guidelines may have restricted credit, but they certainly |
| hardest) that have local lenders offering lending options | | | | haven't killed it. |