Hope that helps.
What type of loan was he trying to get? If he was trying to get an interest only loan, then the reserve requirements would be much higher. It also sounds as if you are trying to get a jumbo loan; is the loan amount higher than $729,750? I guess I should have picked up on that by you saying they were approved for over 1 mil. GSE guidelines won't make a difference since it's non-conforming if we are talking over $729,750 in SF county.
If it's a loan amount of $729,750 or less in SF county and the loan to value if 96.5% or less for FHA or 90% or less for conventional, there should be no issues with the distance and reserve requirements are not strict; in fact, for FHA they are non-existent.
If it's a true jumbo, you should definitely see a broker that has access to portfolio lenders that specialize in this type of scenario. Walking into B of A or Wells is not going to be the thing to do with outside the box loan scenarios.
There may be a lender or 2 out there that will add this overlay to guidelines, but there is no actual distance guideline for Fannie, Freddie or FHA. This is exactly where a good broker's strength comes into play. All you really need for this is a letter of explanation, a lender without overlays for this and a knowledgeable loan officer. With what you describe this should have been a slam dunk.
This is why! What a ridiculous criteria. One has to wonder if the person that decided that was a neccessary criteria has never been to the western United States. In Washington DC you can cross 3 or 4 states in 90 miles, here it's just the run to Sacramento from the San Francisco.
Is this a GSE requirement?
2. See if he would still qualify if you treat this as a second home and use his current apartment as his primary
3. Try a different lender
If you are working with a mortgage broker, he or she should be able to switch lenders.
Licensed Loan Originator
Amerifirst Financial, Inc.
Apply Online: http://www.mattpuzz.com