June 21, 2022

I hope you had a wonderful Father's Day weekend, and yes, I understand we are not celebrated like Mother's on Mother's Day, and I am good with that. Remember that we now have a 3-Day Father's Day weekend thanks to Juneteenth, and Mother's Day is only a two-day celebration. Not that it matters to me as I worked Father's Day and Juneteenth!

Last week, Freddie Mac came out with some good news! Freddie now allows loans on 2 and 3-unit properties with an Accessory Dwelling Unit (ADU). More importantly, they are now allowing us to use the income from an ADU to help a Borrower qualify if the main property is an owner-occupied Single Family Unit! Below are a few other details you should know:
We cannot accept an Appraisal waiver when a borrower uses income from the ADU to qualify.
The ADU income cannot exceed 30% of the buyer's overall income.
You cannot use ADU income on an investment property.
You cannot use ADU income on a 2, or 3-unit property with additional ADU making it 3 or 4 units.
A 4 unit property with an ADU added would be ineligible for sale to Freddie Mac!
The great part here is that an ADU can help your buyers qualify for a mortgage when that was not available just a week ago. Say you have a buyer approved to buy a $900,000.00 house with 10% down. They would now qualify for $1,000,000.00 with 10% down, assuming the ADU is bringing in $2000.00 per month. I guess we should start converting our garages so we can offset the higher interest rates.

Interest rates are slightly worse today than last week but improving somewhat over the past hour. We have a long road ahead before we see relief, which means rates will likely go higher before they come down again.
30-year Government Loans (FHA / VA) are in the 5's
Conventional Loans up to $647,200.00 - High 5's low 6's
High Balance Loans $647,201.00-$ 970,800.00 are in the high 5's and low 6's
Jumbo loans above $970,801 are in the high 5's and low 6's.
5/1, 7/1, 10/1 Arms are in the 4's for over $647,201. Under that, don't bother right now!
Bank statement loans - They are available with 10% down again! 7's+ depending on down and credit score.
Stated income loans - I have one bank with 30% down, but everything else has to be perfect! Interest rates are in the high 6's.
0 down loans are in the 5's - 620 credit score min right now! Mid 6's, for the most part, up to $670,000.00 Price.
0 down Jumbo to $975,000.00 - 680 credit score - call for a quote
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 - are typically 6.49 - 6.99% with limited fees - But they get you where you need to go!
Interest rates are subject to change without notice! Above are LA County Loan Limits.

I will be around all week if you have any questions or if someone interested in buying a property! My cell is (661) 714-6258, and my office line is (661) 260-2970 xt. 2222. Please text me at (661) 714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!