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Conforming Loans in Santa Cruz
Santa Cruz sits in a strange zone where many homes exceed conforming limits. The 2024 limit is $766,550 for single-family homes.
Coastal properties and downtown areas often push you into jumbo territory. East side neighborhoods and parts of Live Oak still have conforming inventory.
When you find a home under the limit, conforming loans deliver the lowest rates. That's because Fannie Mae and Freddie Mac buy these loans, creating massive lender competition.
You need 620 minimum credit for most lenders, but 740+ gets you the best pricing. Down payment starts at 3% for first-time buyers, 5% for repeat buyers.
Debt-to-income ratio caps at 50% with strong credit and reserves. Lenders verify two years of income and employment.
Self-employed borrowers need two years of tax returns. W-2 earners just need paystubs and verification of employment.
Every major lender offers conforming loans because Fannie and Freddie buy them instantly. Rate spreads between lenders hit 0.5% on the same day for the same borrower.
Credit unions in Santa Cruz sometimes beat big banks by 0.25%, but their underwriting takes longer. Direct lenders price aggressively but lack local expertise on appraisal issues.
Shopping across our 200+ wholesale lenders typically saves $80-150 per month versus walking into one bank. That's $28,800-54,000 over a 30-year loan.
Most Santa Cruz buyers who could use conforming loans accidentally go jumbo. They offer $800k on a $775k list price without checking the limit first.
Appraisals kill more conforming deals here than credit issues. Beach proximity adds value unpredictably, and assessors struggle with unique properties.
Lock your rate when you go under contract, not before. Santa Cruz deals fall apart during inspection, and you waste a rate lock 40% of the time if you lock at offer.
Conforming beats jumbo by 0.5-0.75% in rate right now. On a $750k loan, that's $281-421 monthly or $101k-151k over 30 years.
FHA loans allow lower credit scores but require mortgage insurance for the loan's life unless you refinance. Conforming drops PMI automatically at 78% loan-to-value.
ARMs make sense if you're leaving Santa Cruz in under seven years. The 7/1 ARM costs 0.5% less than 30-year fixed conforming, but you're gambling on future rates.
UCSC staff housing and older homes near downtown appraise unpredictably. Lenders sometimes require two appraisals on properties built before 1960.
Tsunami zone properties require flood insurance quotes before closing. This doesn't kill deals but adds $800-2,000 annually to your costs.
Seismic retrofitting shows up on inspections constantly. Budget $15k-40k for foundation work if you're buying a pre-1980 home, and some lenders require completion before funding.
September through November you compete with fewer buyers. Spring market in Santa Cruz runs hot, and you'll overpay by 3-7% versus fall purchases on similar properties.
$766,550 for single-family homes. Duplexes, triplexes, and fourplexes have higher limits but still fall below most Santa Cruz multi-unit prices.
Yes, if the condo project is approved by Fannie Mae or Freddie Mac and under $766,550. Warrantable condo status matters more than location.
Same timeline, usually 25-35 days. The difference is rate and cost, not speed.
Not required for strong credit and low debt ratios. Lenders want 2-6 months reserves if your DTI exceeds 45% or credit is below 700.
No impact on approval. Lenders don't require earthquake insurance, but your homeowner's policy won't cover it unless you add a rider.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.