FHFA, Fannie/Freddie's regulator, just announced an increase on loans delivered to the two agencies in the form of higher loan level adjustments but any where from 1.250 to 3.875. That is NOT that rates will go up that much but that is the cost to lender to deliver that loan. So, that will effectively raise rates a .250% on lower loan to values up maybe 1.5% on higher loan to values. or, simply increase the upfront cost by a 1% up to 2-3 points.

Second homes in this context are vacation homes. Investment properties already had very similar rate adjustments.


https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=FHFA-Announces-Targeted-Increases-to-Enterprise-Pricing-Framework.aspx

Note: the last two posts are gibberish. Ignore them.

I assume this will be priced in to rates well prior to the April 1 effective date?

Yes because it is typically at least 45 days from when a rate is locked to when it is actually delivered to Fannie/Freddie even on a 30 day rate lock. So, investors will price it in early to be sure.

SteveBott said:

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Note: the last two posts are gibberish. Ignore them.

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I don't understand... we need to make it easier for people to buy second homes, investment properties?

We are in a housing crisis. Rents and home values are through the roof FYI

jja79 said:

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We've got a portfolio 10/1 ARM for 2nd homes that goes on the balance sheet, 2.75% with 0 points for the first 10 years.

This will possibly be a time to look for someone with a portfolio product.

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That's a crazy good rate.

The way the market is going who knows how long that can last. I closed 2 Texags posters on this same product for investment properties at 2.875% back in November.

Until about two weeks this was attainable on a 30 year fixed as there was no LLPA adjustments on a second home.

Jay@AgsReward.com said:

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Until about two weeks this was attainable on a 30 year fixed as there was no LLPA adjustments on a second home.

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yep - mine is a fixed 30 at 2.75, 20% down, 0.5% lower than my primary home (also 20% down).

First you have to separate second homes and investments. Two totally different markets. Second homes are lake houses, beach houses or cabins in the mountains. They are not being bought by primary home owners. They are just as they are defined as second homes. There is almost no competition between the two buyers.

You included investments in your second reply and those are different and do compete with primary buyers. But there is significant price adjustments already in the market for those. And they still house people who do need homes so not completely at competition with all people. Some folks just simply want to rent so this is a service for them. I have a good friend in this category. Just does not want the responsibility of upkeep or unexpected expenses.

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Don't hold your breath. The large funds like Blackstone can borrow money at rates much lower than us peasants. This just makes it easier for them to buy up all the property in Florida, Colorado, and Montana. Don't let the government fool you, the next time they pass a policy that actually benefits the middle class will be the first.

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There are multiple loan programs created by the government that have greatly helped lower and middle class. FHA and VA have helped millions of people buy their homes. They are government programs. Just from the article cited......

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To ensure that the Enterprises continue to provide strong support for affordable housing, the existing beneficial pricing treatment of certain programs such as HomeReady, Home Possible, HFA Preferred, and HFA Advantage will not be altered by the new fees. In addition, loans to first time homebuyers in high cost areas with incomes at or below 100 percent of area median income will have no specific high balance upfront fees.

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All of those programs are specifically targeted to the average buyer. Your post is false. Heck I bought my first time with Fha and the only reason I could buy was the 3.5% down feature. VA is 100% with no PMI and a great loan.

As for corporate buyers sure there are some but we already seen companies like Zillow leave the market. Big corp buyers in my opinion are transient and will soon find its a lot tougher to make money in individual homes then they expected. They will go back to multi family in due time.

10 Year US Treasury is up 30 bps the last 30 days and up 75 bps year over year. Not looking good in the short term for any kind of rates.