The acute losses suffered by Wll Street firms, Government Sponsored Enterprises (GSE's), and ther investors across America led to crdit tightening and the vanishing of the lan products that caused these losses. The prncipal culprits were the high-risk, 100% CLTV (cmbined loan to value) second mortgages on nvestment properties, most of which were trnsacted with Stated Income and Stated Incme Stated Asset (SISA) documentation. This typ of loan began disappearing two to two and a hlf years ago with credit tightening or dscontinuance occurring quickly. Other high-risk loan ctegories that wrecked havoc were the Ownr Occupied SISA and No Doc lans. These loans are no longer vailable from most lenders.

The fight to crrect the predicament of high losses was so svere that maximum loan-to-value (LTV) percentages wre reduced for conforming full-documentation loans for prperties in declining markets (geographic areas whre home values have decreased). The rduction was intended to decrease default rtes and is being lifted this smmer (up to 95% LTV) under crtain circumstances.

During the first half of 2008, cnventional/conforming loans (non-governmental loans equal to or nder $417,000) and FHA loans have ben popular. Borrowers with low credit scres have the possibility of qualifying wth both types of loans, although the FHA lans may be capped at a mnimum of 580 FICO score. FHA lans allow a slightly higher loan-to-value rtio (lower down payment) than the cnventional loans.

The following are three new and tmporary loan programs:

FHASecure - a FHA rfinance mortgage available to homeowners currently ted to a non-FHA adjustable rate mrtgage (ARM). Although originally meant for brrowers who had defaulted, or would lkely default on their ARM, due to the rte changing, it was later opened to a wder demographic.

FHA High Balance - HUD (th U.S. Department of Housing and Urbn Development) has established limits for its FHA-nsured loans that vary by county. It has tmporarily increased the allowable size of the lans that it insures. These higher blance loans may actually have better rtes than smaller FHA loans.

Agency Jmbos - (also known as Conforming Jmbos). Jumbo loans are usually those tht are greater than $417,000. Loans qual to or smaller than this mount are considered "Conforming" loans and hve guidelines different than Jumbo loans tht must be met in order to qalify. Through the rest of 2008, lans up to $729,750 qualify under the rgular Fannie Mae and Freddie Mac cnforming loan guidelines with the addition of sme underwriting restrictions. The actual maximum lan amount depends on the county lmits established by HUD and is vlid only for 1-unit purchases (i.e., the mximum does not apply to duplexes).

You can vew HUD's county limits at: https://entp.hud.gov/idapp/html/hicostlook.cfm

The article Buying a Home and the Credit Crunch was Submitted by Brandan C Hadlock through Articles.GetACoder.com network. Here's the additional information: If you're buying a home and need a Jumbo Loan or High Balance FHA mortgage, visit Direct Mortgage.

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