Asked by Sumit Bajaj, West New York, NJ • Thu Jan 3, 2013
I am in a process of buying a house in Jersey City, NJ. I was pre-approved with 10% down.
Everything was going good with my mortgage process and just a day before closing, I came to know that there is some changes in mortgage guidelines(effective Dec1) that requires Full Condo Project Approval Review with LTV < 80%. (earlier it was 90%).
My lender did a full project review and found that the HoA doesnt have 10% fund in Reserve Account and hence all of a sudden the project in ineligible from Dec1 onwards.
That being said, I cannot get a mortgage for LTV 90%, even I have 750 Fisco with 8 months of reserves. In order to get a mortgage in the same building I need to put 20 down, which is quite not possible for me at this point of time.
Now, my lender is looking for another option to provide me 80-10-10 loan commonly know as Piggyback loan or Second Mortgage.
Since all these guidelines changed recently, he is not sure if 80-10-10 loan will help him to avoid full project app
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