I want to highlight a few creative lending solutions today because it will get worse before it gets better.. inventory that is.  So if inventory will tighten in December and into January; how do you solve the problem of getting your clients under contract?  Get creative.  There are so many solutions lenders don’t discuss as they get stuck in a rut.  So let’s jump the ruts and throw out some creative options available today… starting with higher loan limits and the options they give

Loan Limits

Conventional – FHA – Reverse Mortgage 2022 loan limits have been announced giving home buyers opportunities to purchase with less documentation and the constraints imposed by Jumbo loans.  Denver Metro buyers can take advantage of new loans amounts of $684,250, which means they can purchase a $720,000 home with as little as 5% down.  Need 3% down as a first time homebuyer?  Then you need to stick to conforming loan amounts of $647,200, which means a purchase price of $667,000.

OR.. you could do only 3.5% down on the new FHA loan limit for Denver of $684,250.  That means a purchase price of $709,000.  WOW is right!  My poor Weld buyers are still stuck behind lower FHA loan limits.  Weld FHA limit is $420,680.  If you are out shopping with FHA buyers and cross county lines.. make sure to confirm with your lender (hopefully me 😉) or look them up here.

HECM limits also went up! This gives senior buyers more options!  If you have not taken the time to learn how reverse mortgages have changed, you need to.  They are a great way to improve cash flow in retirement; put less down when purchasing or pull equity out and never have a mortgage payment again.  FHA limits increased to $970,800. NON-FHA options are also available as young as 55 and up to $4,000,000!

Jumbos Getting Easier – Have you heard?  We have jumbo loans with as little as 3.5% down.  That doesn’t even seem right, but it is!  3.5% down will require more in reserves, so this program is fantastic for buyers who have the money, but with their investments doing so well, they don’t want to put more down given today’s low rates.  Another amazing advance in the jumbo world is the AUS Jumbo.  AUS is “automated underwriting system” or Fannie Mae and Freddie Mac’s automated underwriting engine.  This means Jumbo loans are now being underwritten like they are a conventional loan.  So what I said above about those borrowers needing to stay conventional.. maybe jumbo isn’t so scary after all!

1 Year Business Tax Returns – if your business has existed for more than 2 years, many times we can get a 1 year income approval. This is especially helpful if your income has been increasing or if your first year was a dud. If your business has existed for more than 5 years, we can go Freddie Mac every time with only 1 year.  But what if your business has only existed for one year?  Now we can use non-QM products with 20% down using only 1 year business returns or 12 months bank statements.

Bank Statements – Some self employed people have the blessing of very creative CPAs 😉 with little to no income on their tax returns.  Have no fear, bank statement options are here!  24 months bank statements up to 85% loan to value and a minimum of 680 FICO.  Have 12 months bank statements? 25% down required and a minimum FICO of 720.

Asset Depletion – For buyers who are asset heavy but income light; asset depletion allows us to use the “after purchase” balances and calculate a monthly income.  A minimum of $500,000 must be left over after the purchase and 20% down.. but this is an incredible solution given the rise in investment values!

Bridge Loans – Who’s doing them?  We are. 680 minimum FICO, 50% maximum debt to income ratio, minimum $400,000 to a maximum of $1.5 million.  This provides cash through a first lien loan (bridge loan) on a property listed for sale towards the purchase of another property.  These loans are only available when the new purchase primary is also sourced through The Rueth Team. (*rates are higher)

ITIN Loans with 10% Down! Traditionally, you needed anywhere from 20 to 40% down for an ITIN loan.  The Rueth Team not only has a 10% down ITIN option, we now have a Spanish Speaking Power Team!!  Sales, Support, Operations and Closing all fluent in Spanish. 10% down does require 720 FICO and 6 months reserves.

DSCR.. Some investors either can’t or don’t want to qualify using their income.  GREAT NEWS!  Now, with the Debt Service Coverage Ratio program, they can qualifying only using the rent payments on the investment property we are purchasing.  Buyers will need a primary home, as little as 20% down, credit scores down to 640.  Interest only payments and waiving escrow is also available.  Sound too good to be true?  It’s for real!

USDA Financing Manufactured Homes – Did you know that USDA opened up financing to manufactured homes as well as modular homes in leased-land communities.  Housing is getting more expensive and often manufactured and modular homes offer solutions for first time home buyers.  Down payment assistance and USDA can help a first time home buyer who has little down.  If you have buyers looking in rural areas, USDA is a perfect fit!


Nicole Rueth has been passionately advising clients on their wealth building and home financing strategies for over 17 years. Her path has been non-conventional and it is a benefit to her clients.  www.TheRuethTeam.Com.