SF Mortgage Spot

Just a reminder:  as you know, the Fannie Mae loan limit of $729,750 on a single family residence,  has been extended through December, 2010.   Beyond that, the limts on 2 to 4 units have also been extended as follows:

2 units:  $934,200

3 units:  $1,129,250

4 units:  $1,403,400

These limits apply both to Fannie Mae and Freddie Mac conventional loans as well as FHA-insured government loans.

You may be hoping that today's low 30 year fixed rates will reduce your monthly payments on your TIC unit with a simple refinance.   Yes, it would be great to convert to a more predictable 30 year fixed rate loan while you wait another year for a more favorable lottery.  

But don't get too excited.  Some owners will benefit by the change, but most won't, not unless they purchased their unit long ago or with a sizeable down payment.  

Under the extended guidelines, the maximum loan to value on a 2 unit building is 80%, but on a 3 to 4 unit building, it's only 75%.  Translation:  if you purchased your TIC interest within the past tive years with 10% down, it's unlikely your loan to value is now low enough to take advantage of a 30 year fixed rate loan.   Secondly, if you obtained an interest ony loan, even if you have the equity (a low enough loan-to-value ratio), you probably won't like the payment jump from the interest only payment to the fully amortized payment. 

Feel free to contact me if you'd like me to run a scenarios for you to see if refinancing will make sense under the extended loan limits.