Loans for Homes in Carmel, Pebble Beach, Carmel Valley Update
As I have stressed in my Carmel Report and Pebble Beach Report, the credit crunch has made it difficult for many Carmel and Pebble Beach buyers that in the past would have opted for “no-doc” or “low-doc” loans.
My friend Steve Woods at Blue Adobe Mortgage has provided the following update on the state of the mortgage market. Steve can be reached by email at stevew@blueadobemortgage.com or by phone at 831-917-4462. Give him a call for a quick quote and advice on how to best structure a loan in this market.
New 2009 Conforming Loan Maximums
The temporary jumbo conforming mortgage loan limit of $727,750 has expired. The new jumbo conforming limit will be based on 115 percent of the County median sales price, not to exceed $625,500.
Jumbo conforming loan limits for our regional market area will be as follows:
• Monterey County $483,000
• Santa Cruz County $625,500
• San Benito County $625,500
• Santa Clara County $625,000
Most of the San Francisco Bay counties received the highest designation. Monterey County which used to have a median price similar to Santa Cruz has seen a 50 percent reduction in the median price and will see the lower $483,000 loan maximum. The standard conforming loan limit will remain at $417,000 for all of the above counties.
In addition, FHA loans have been increased along the same line as jumbo conforming. Monterey will have a new FHA jumbo loan maximum of $483,000 and Santa Cruz, San Benito and Santa Clara Counties will receive $625,500. FHA loans are important for our market due to their low down payment requirement and easier underwriting guidelines. As of January 1st, 2009 the down payment for FHA loans will be 3.5 percent. FHA allows a parent or relative to give the down payment as a gift to a potential purchaser and is an excellent program for the first time buyer. Young professionals in our market area are encouraged to learn more about FHA financing.
The Jumbo Secondary Mortgage Market no longer exists (loans over $625,500) Due to the “sub-prime” and “Alt-A” market meltdowns, lenders no longer package loans above the “super conforming” loan limits for sale to various investors. There are a few regional banks who are offering “short-term” adjustable loans up to loan amounts of $5 million, however these loans are fully documented income with credit scores of over 720 and reasonable cash reserves.
The “stated income, stated asset” loan type no longer exists and is blamed for the credit meltdown we have seen over the past 15 months. We are back to the 1970’s with respect to loan underwriting.
For more information about mortgage financing feel free to give Steve a call directly, or you can reach me at 831-601-4740 or malone@malonehodges.com to discuss a specific property or area.
It is imperative that you have the financing piece of the puzzle in place to make the most effective offer possible.
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