A borrower wants to purchase a $900,000 condominium in an area with a $750,000 conforming limit. The condo project has 150 units, and the borrower plans to use it as a second home. What additional requirement must be met for GSE eligibility?
Correct Answer
C) A jumbo loan is required regardless of project approval
Since the loan amount ($900,000) exceeds the conforming limit ($750,000), this would be a jumbo loan regardless of the condo project's approval status. Jumbo loans don't conform to GSE purchase limits.
Why This Is the Correct Answer
Since the loan amount ($900,000) exceeds the conforming limit ($750,000), this would be a jumbo loan regardless of the condo project's approval status. Jumbo loans don't conform to GSE purchase limits.
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A borrower is purchasing a home for $350,000 in a county where the FHA loan limit is $420,680. The borrower makes a 5% down payment and finances the MIP. What is the loan-to-value ratio used for calculating the annual MIP?