March 23, 2020 at 2:52 pm #66461jgamble8Participant
1) I am a non-priority member and have found a new build that is located in a census tract whose Median Income is below 100%, but barely. It is 99.8%. AM I still able to purchase here since the median income is technically less than 100%?
2) Since this is a new construction, the approximate delivery date is October 2020. As the median income figures are released (usually in August/September), what will happen in the event that the median income for that census tract increases above the MSA median income PRIOR to me closing, but I would have potentially signed the P&S in March/April 2020 (before the 2020 numbers were released)? Will I have to forfeit the property?
3) At what point in the process is the interest rate “locked in” if purchasing a new construction home that won’t be ready for another 6-7 months?
One last question, at what point, does all “buy down” funds have to be in your account? Is this at bank application or prior to closing? I’ve read that one cannot further buy down at closing–is this accurate? Considering the home I’d like to purchase won’t be ready until October, can I not use the additional 7 months to save and further buy down my interest rate?
Any help is greatly appreciated!
-JonjelynMarch 23, 2020 at 2:58 pm #66462BakerTheBakerMember
1) 100% is 100%, there’s no room for rounding in either direction, so under 100% is under 100%.
2) I believe once you are approved for a specific property, that’s when they stop checking for this – but someone else may be able to give you a better answer.
3) When you receive your loan estimate, which is when you upload your P&S agreement.
4) It must be in your account when Credit Access is done, I believe, since that is when the loan estimate with buydown appears as I recall. Again, someone may have a more thorough answer. We used another lender to secure our new construction while going through the NACA process, so Credit Access came much closer to the purchase than you are talking about.March 23, 2020 at 3:49 pm #66463NelsontMember
@bakerthebaker is right
You will be fine as long as the tract is 99.99%.
I do believe the numbers you go on are the 2019 numbers. The bank can potentially review your file and determine otherwise but being 6 months out I think you will be fine. One thing to do if you so desire is to add a clause to your contract that allows you get your EMD back in full if the bank determines you to be in a non-priority area.
Just remember locked in means exactly that. If the interest rate drops at any point after your locked in rate will be higher than the “current” rate.
Your MC should not even submit you for credit access access underwriting if you do not have the funds liquid in your main checking account.
All buy down funds must be in your account at credit access. The underwriters have to determine if you are ready “now”. They don’t want to hear possibly in 6 months because anything can happen. Getting a loan is a snapshot of today. Once you submit to credit access you cannot change the loan details without voiding your contract (possibly forfeiting your EMD due to breach of contract) ad starting over.
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