Mortgage

JMAC restarts jumbo lending after ‘pandemic pause’

FICO scores and cash reserves are higher, but self-employed borrowers are eligible

JMAC Lending restarted its jumbo program on Monday, a week before the target date the company set in March when it suspended funding the bigger mortgages as the COVID-19 pandemic began hitting the U.S. economy.

The revived jumbo program is available for purchase loans, refinancings and cash-out, the Santa Ana, California-based company said. JMAC continued funding conforming loans in April and May even as it suspended lending for jumbos that exceed the amount the government will back, usually those above $510,400.

“There is a high demand for jumbo loans right now as buyers return to the housing market, especially in high-value areas,” JMAC Lending’s President Christina Pham said in a statement that referred to the suspension of the jumbo program as a “pandemic pause.”

The high-balance loans come with some overlays, the company said. FICO scores and cash reserves of borrowers are higher than before the pandemic. But, income qualifications are the same for wage earners and self-employed borrowers. And, there’s no mortgage history required, meaning first-time buyers could qualify.

Loans are available to $2 million, JMAC said. For loans up to $1 million, there’s an 80% loan-to-value maximum, a ratio that compares the amount of the mortgage to the value of the home. For mortgages up to $2 million, the maximum LTV is 60%.

A Mortgage Bankers Association index that measures credit availability for jumbo mortgages in May showed the tightest jumbo credit conditions since March of 2016, according to data from the Mortgage Bankers Association.

The index fell 54% from February, when the COVID-19 pandemic first started hitting the U.S., indicating lenders were getting stricter as millions of Americans lost their jobs.

For those who can qualify, the jumbo rates are tantalizingly low, according to a national survey from MBA.

The average U.S. rate for a jumbo mortgage fell to 3.66% in May’s last week, close to the 3.58% in March that was the lowest in an MBA data series that goes back to January 2015. In the first week of June, the jumbo average was 3.7%.

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