3/12/2024 – – FHA vs. Conventional and LLPA’s!

3/12/2024 – – FHA vs. Conventional and LLPA’s!

President | Loan Officer
Mike Meena
Published on March 12, 2024

3/12/2024 – – FHA vs. Conventional and LLPA’s!

We have spoken a lot about townhouses and condos lately, but I will give you a quickie and change the page. We got approval on a conventional Fannie Mae loan in the Madisons yesterday! Due to litigation, this has been a problem complex for many transactions, and I had 3-4 investors say NO and one say YES! My buyer, who is purchasing, initially wanted to go with an FHA loan because that was what his original lender told him was a better deal! I explained that with his strong credit score and his income being under $126,000 as a first-time buyer, he is getting a better rate with no Loan Level Price Adjustments (LLPA’s) and saving the $7000.00 Up Front Mortgage Insurance Premium (UFMIP) he would pay if he got an FHA Loan! The PMI is lower on a conventional loan, and the rate is a little higher, but he will refinance because rates will go down, and he should not pay UFMIP if he can avoid it!


Ahhh, so now we will talk about LLPA’s. LLPAs are added fees for lower credit scores and higher loan-to-value loans, along with other risk factors charged by Fannie Mae and Freddie Mac! FHA has these, too, but they are not as crazy as conventional fees. Example:

A 780 credit score on a condo may have a 6.875% rate with no points, but with a 640 credit score, you may pay 2 points. If you are a first-time buyer making less than $126K annually, you will get a 6.50% rate even with a low credit score because all of the LLPA’s go away for a first-time buyer on a conventional loan.


Here is the best part! If your buyer goes to a broker and is a first-time buyer and qualifies for the lower interest rate, the broker won’t know because the bank behind the broker will take that money as their “PROFIT” rather than pass it on to the first-time buyer!


Fun stuff, I know!


I am available all week if you need anything. Let me know if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text, text (661-714-6258) or email me at Mike@AugustaFinancial.com.


But wait, there’s more!


Condo / Townhome – issues we know of now. Properties can be financed with 10% down and are considered NON-WARRANTABLE:

  1. American Beauty Condos – The brown ones – Insurance – 50 Mil in coverage for 748 units is not nearly enough!
  2. American Beauty Village West: Reserves
  3. Bouquet Canyon Village – Insurance – On Fannie’s list!
  4. Bridgewater, Emeryville - On Fannie’s list!
  5. Brookside Walk – Insurance –
  6. Cabrini Villas, Burbank - On Fannie’s list!
  7. Canyon Oaks – Insurance On Fannie’s list!
  8. Casa Marabella – 13951 Sherman Way, Van Nuys -On Fannie’s list!  
  9. Cornerstone – Insurance -On Fannie’s list!
  10. Encino Oaks – 5460 White Oak Ave – On Fannie’s list!
  11. Liberty Canyon HOA – 27409 Country Glen Road, Agoura Hills, CA- On Fannie’s list!
  12. Mariposa: Insurance On Fannie’s list!
  13. Penn Court HOA – 4201 Pennsylvania Ave La Crescenta On Fannie’s list!
  14. Rainbow Sierra Terrace – Underinsured and voting on Insurance in March!
  15. Scenic Hills – Insurance – On Fannie’s list!
  16. Shadow Ridge – Oak Park – Insurance -On Fannie’s list!
  17. Sherman Way Condos – 17900 Sherman Way Reseda – On Fannie’s list!
  18. Sierra Glen Condos – Insurance – On Fannie’s list!
  19. The District Community Association – 19533 Cardigan Dr, Northridge – On Fannie’s list!
  20. The Met at Warner Center, Woodland Hills  -  On Fannie’s list!
  21. Treana – Stevenson Ranch:  On Fannie’s list!
  22. Valle Di Oro –  On Fannie’s list!
  23. Walnut Gardens II – 7320 Lennox Ave Van Nuys CA – On Fannie’s list!
  24. Warner Center Condos – 5515 Canoga Ave, Woodland Hills, CA –  On Fannie’s list!
  25. West Creek Condos and Townhomes: Insurance On Fannie’s List!

Condo Watch List: This means I am not sure, but I will let you know. I can do it, but I doubt everyone can!

American Beauty Gardens: We should know by Thursday!

Madisons: I know we can do them, but this one will be bad if it gets in the wrong hands!


Please let me know if you hear anything new on condos or townhouses.


Interest rates had a solid week, and let’s continue this run for March! Rates are at their best levels since February 2nd, 2024! Yes, I put the 2024 for you sarcastic comedians.

  • 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
  • We do loans in all states, so call me with anything you need.  
  • Government Loans (FHA / VA) are in the high 5’s and low 6’s
  • Conventional Loans up to $765,550.00 are in the low to mid 6’s
  • High Balance Loans $765,550.00-$ 1,148,325.00 are in the mid to high 6’s
  • Jumbo loans above $1,148,325 are in 6’s
  • Bank statement loans - They are available with 10% down again! 6’s to 9’s depending on down and credit score.
  • No income qualifier – 40% down with reserves! In the 8’s!
  • 0 down loans are in the high 7’s – 660 credit score min right now, up to $793,000.00.
  • Private Money lenders - Hard Money Loans – 35% down!
  • No Ratio Loans 30% down
  • Debt Service Coverage loans with as little as 25% down
  • Bridge Loans - typically 7.49% with limited fees – and they get you where you need to go!
  • 0 down California Dream for all Equity Share – Postponed until April 2024??? Ya better hurry and get started!
  • 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice! The above are LA County Loan Limits.


I am available all week if you need anything. Let me know if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is working again at 661-291-2222. When you text, text (661-714-6258) or email me at Mike@AugustaFinancial.com.


Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow!

President | Loan Officer
Mike Meena President | Loan Officer
Click to Call or Text:
(661) 714-6258

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