Hi all,

Here’s some exciting news affecting the ability of buyers to qualify for home purchases.  Please let me know if you have any questions.

FHFA 2024 Loan Limits

Today, the new limit for conforming loans (one-unit conventional and HECM reverse mortgages) in Hawaii for 2024 was announced at $1,149,825, up from $1,089,300 in 2023.  We can now do these loans up to the $1,149,825 loan amount limit.

With the easier underwriting and higher debt-to-income ratios allowed at higher loan amounts, combined with declining mortgage rates, more people will be able to qualify for higher-priced homes going forward.  We can combine conforming loans with piggyback HELOC’s to allow people to qualify for higher amounts than they can using a jumbo loan.

Mortgage Rates Drop

The average 30-year fixed mortgage rate has dropped from a peak over 8% last month to 7.30% today, and we can get borrowers rates well below average.  Although rates move up and down, we expect them to trend lower in coming years, allowing more people to qualify to buy homes at current prices.

If you know anyone who has been waiting for rates to drop before buying, please let us know, and we’ll be happy to help them.

Update:  Master Hurricane Gap Lending Options

Unfortunately, Fannie Mae and Freddie Mac, the Government-Sponsored Enterprises (GSE’s) that set the guidelines for conventional loans, which most lenders follow for other types of loans, too, require that a condo building’s master hurricane insurance policy provide 100% coverage of the replacement value for the building. 

There are a number of condo buildings in Hawaii that currently don’t have sufficient master hurricane insurance coverage to meet this requirement.  As a result, most lenders can’t finance units in these buildings.

National Lenders

Fortunately, one national lender we work with has confirmed with their head of credit that they have no minimum coverage requirement for condo master hurricane insurance.  They do full documentation, bank statement, jumbo, foreign national, asset dissipation, and DSCR loans, but not conventional, VA, FHA, or USDA loans, with a minimum 10% down payment.  Their rates are a little higher than a conventional loan, with rates varying quite a bit depending on the down payment, credit score, type of loan, and other factors.

Another national lender we work with has a condo department that hasn’t been checking the master hurricane coverage on conventional, VA, FHA, USDA, or jumbo loans, but we don’t know how much longer that will be the case.

Local Lenders

Most local lenders will not lend on these buildings at this time.  One local lender we work with, Finance Factors, has decided to finance units in these buildings with their standard ARM program (no fixed-rate mortgages), as long as the borrower obtains hurricane “gap” insurance, though they’re still discussing internally what their insurance requirements will be to close these loans – they haven’t yet closed any and they expect to have an update very soon.  Their standard ARM rates are higher than conventional loans, and they require a bigger down payment, but at least they are allowing financing on these buildings.

If you’d like a flyer on these options, or more details, please let me know.