Aloha Friday,

Rates are almost flat since last Friday’s update and have barely moved on the conforming limits. We actually had a real increase as the beginning of the week, but they have settled back in to last Friday’s numbers again.

There are two very important things to share with you this week in regards to a new purchase/construction tie in loan and the new Fannie Mae loan limits as of January 1st.

1) Fannie Mae has come out with a program called the “Fannie Mae Homestyle” program. Basically the borrower can purchase a new home or refinance and finance up to 50% of the completed value of the home to include new construction. For example. A sales price of $300,000 on a single family home. The borrower needs $110,000 in renovations on the home. That will be a finished value of $410,000 and the borrower can finance their loan with as little as 10% down of the $410,000 completed value. The work must be done by a contractor and there are draws that are taken upon completion of the work as it goes just like a normal construction loan. This is a great way to buy some of the fixer uppers that are on the market today and is a very valuable tool for you to sell more homes to clients who do not have the money to make the improvements. The maximum loan amount is the conforming limit.

2) The new loan limits for 2009 are coming out and will be calculated based on the median sales price within an area not to exceed $625,500. There are formulas being determined now to figure those numbers and I will fill you in on the county limits as they come out. For now, please note that on the mainland the maximum limit will be $625,500 and in Hawaii and Alaska the maximum limit will be $938,250. The good news is we will no longer have two sets of guidelines that we have right now on the “Temporary Stimulus Package” that is in place until December 31st. Currently there are two sets of guidelines and loan to values in place, one for the conforming limits to $417,000 and one for the temporary stimulus package depending on the county.

Please call me with any questions regarding the Homestyle program as I am sure there are many houses that can fit in to this unique program. I hope you have a great weekend planned. Please let us know if we can help you in any way.

Lawrence P. Carnicelli, B

Lahaina, Maui

Maui Real Estate