FHA Guideline Twists Every Agent Should Have on Their Radar

Did you know that FHA no longer requires us to use 1% of a borrower’s student loan balance when calculating debt-to-income? Instead, lenders now use the actual monthly payment that shows up on the credit report. If no payment shows, we use just 0.5% of the balance. This new guideline is a significant shift because so many buyers are on income-based repayment plans, and now their real payment - not an inflated one - counts toward qualifying.

If a borrower is in forbearance or deferment, FHA still requires us to count 0.5% of the balance as a placeholder. Even if the borrower’s payment is technically $0, FHA wants a number factored in. That’s something to keep in mind when working with clients who are "pausing" their student loans.

Here’s another curveball: as of May 25, 2025, FHA financing is limited to U.S. citizens and lawful permanent residents only. Borrowers on temporary visas, DACA status, asylum seekers, or those working with an ITIN but no Social Security number are no longer eligible for FHA loans.

And finally, there’s a positive update in the credit space. The agencies are now accepting VantageScore 4.0. This model factors in rental history, utility payments, and other data points that weren't always considered before. That means more buyers who have thin or non-traditional credit files may now have a better chance at qualifying.

These little changes might not make headlines, but they change how deals get done.

Please let me know if you have any questions or if a client needs my guidance. I’m just a call, text, or email away.

📞 Direct Line: 661-291-2222 – Text OK

📞 Cell: 661-714-6258 – Text OK

📞 Office: 661-260-2970 ext. 2222 – Text OK

📧 Email: Mike@AugustaFinancial.com

But wait, there’s more…

Interest Rates

Interest rates are slightly higher again today! My Crystal ball is in the shop, and I will let you know what it says when I get it!

Loan Programs

• We do loans on Non-warrantable condos!
• We offer 12-day escrows for pre-approved buyers, including conventional FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the high 5’s and low 6’s.
• Conventional loans up to $806,500 are in the low to mid 6s.
• High-balance loans from $806,501 to $1,209,750 are also in the 6’s and 7’s.
• Jumbo loans above $1,209,750 are in the 6’s and 7’s.
• Bank statement loans are available with 10% down again, with larger down payments in the 6’s++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No-Ratio Loans require a 30% down payment.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

**Good News for Condos:**   

Canyon Village – No Longer Naughty! CV did their time, and I explained that I don’t want to see them here again! They get it, but who knows with these HOAs nowadays?

**Bad News for Condos***     

Arroyo Park – Critical repairs. We have seen others fix critical repairs in approximately 60 days, but we will see what Arroyo Park does.

Brookside Walk – They removed the 5% cap on the deductible for the Insurance, and now they are non-warrantable! Deductible is now too high!

CONDO HELP!!!

If you have a listing or a buyer interested in a specific condo, and you’re unsure whether the condo is warrantable or Non-warrantable, please call me, and we can look up Fannie’s list in real time. I have already done that on three condos today, and my list was accurate on all 3. We don’t know when something has changed, and it would be impossible to track everything day by day, but we don’t mind looking up a few each day!

The full state of California’s naughty list has been added to: MikeMeena.com! See the link below:

https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses.

I am available every day if you need anything.

📞 Direct Line: 661-291-2222 – Text OK

📞 Cell: 661-714-6258 – Text OK

📞 Office: 661-260-2970 ext. 2222 – Text OK

📧 Email: Mike@AugustaFinancial.com

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