Fannie to Begin Buying Jumbos April 1

Fannie Mae will begin purchasing fixed-rate jumbo mortgages on April 1, but the single-family loans will have to be manually underwritten until its automated underwriting system is updated. Purchases of adjustable-rate mortgages will begin May 1, the secondary-market agency told lenders in posting its underwriting criteria for the temporary jumbo program authorized by Congress in the economic stimulus bill. On purchase mortgages, loan-to-value ratios (including second liens) cannot exceed 90% on fixed-rate jumbos and 80% on ARMs, which means a homebuyer has to put up a 20% downpayment on a jumbo ARM. On refinancings, the cash take-out is limited to $2,000, and the LTV ratio cannot exceed 75% on the first mortgage or 95% with second liens. Despite the conservative lending standards, Fannie is charging a special fee of 25 basis points on fixed-rate jumbos and a 75-bp fee on ARMs. The government-sponsored enterprise can be found on the Web at http://www.fanniemae.com.