My wife and I just had trouble getting a loan this past month (not a jumbo though), and our FICO scores are about 700. The underwriter hemmed and hawed over it before declining. We're trying to get situated with her new job, so we decided to just say screw it and rent for now.

@timmus: We got a conforming loan a week ago, no problem at all. Did you have a full 20% down?

It's been awhile since I worked as a mortgage banker and broker (back in 2000-2001 my brokerage wanted me to push sub-prime Option ARMs to borrowers - I never had the heart to do it, never writing a single one, and sleep well at night now as a result), but I would think that making a loan into a conforming loan actually makes the underwriting more stringent and the loan harder to get.

Sub-Prime - giving you loans your paycheck, bank accounts and down payment says are risky.

Conforming - creating a loan that can be packaged and sold on the secondary market as "A" paper to investors by adopting uniform (or "conforming") loan and underwriting guidelines.

It's not that conforming loans are easier to get, it's that they're designed to be the highest grade loans for investors on the secondary market. By nature, this requires removing as many risk factors as possible.

Shorter explanation: A conforming loan is one that your paycheck and bank account can clearly absorb with minimal risk of default.

I work for a very large mortgage lender and I can tell you that the new "conventional jumbo's" are hard to qualify for. We are not allowing cash-out transactions, you cannot roll in a second mortgage for any reason, and we can only go up to 75% of the homes value on refi's. Plus, the new loan limit isn't set across the board as the current 417K limit is but rather calculated from the counties medium home value. This means that this new program only effects 245 counties nationwide.

[www.ofheo.gov]

That jumbo loan limit is complete bull for anyone living in a major metropolitan area like New York.

It is no problem getting a conforming loan if you put the traditional 20% down. I still see 0% down offerings with FHA and down payment and closing cost assistance but I do not know anyone who qualifies. It sucks now that you have to have the abbility to pay back the loan.

Acutally it isn't as easy to get a "new" conforming loan as some have suggested here. For our area in California this was the list of rules sent out:

The temporary loan limits will be available until 12/31/2008
1 unit SFRs and condos only
You cannot roll together a 1st and 2nd mortgage to obtain the
Jumbo-Conforming loan. Existing 2nd TDs must be resubordinated
Purchase Loans using a fixed rate mortgage will have a maximum loan to
value of 85%. 15% down payment
Purchase Loans using an adjustable rate mortgage (5/1 arm only. Fixed
for 5 years rolls to a one year adjustable) will have a maximum loan to
value of 75%. 25% down payment
Purchase Loans for 2nd Home and Investment Properties will have a
maximum of 60% loan to value. 40% down payment
Cash out refinances are not eligible
No cash out refinance using a fixed rate mortgage or 5/1 will have a
maximum loan to value of 75% with a combined loan to value of 90%
No cash out refinance transactions for 2nd Home and Investment
Properties will have a maximum of 60% loan to value
15 or 30 year term only for fixed rate mortgages
5/1arms fully amortizing and interest only with 30 year terms
Credit score criteria will apply. Over 80% LTV will require a score of
700. Below 80%, credit score requirement is 660 with no mortgage or
late payments in last 12 months
45% maximum debt to income ratio
Full documentation only
Price increases will apply. These have yet to be determined
FHA transactions should allow for increased limits for 2-4 units in the
following amounts for Santa Barbara County: $934,200 for 2 unit,
$1,129,250 for 3 unit and $1,403,400 for 4 unit properties.

I'm not saying those are impossible, but even though we have great credit and the 70% LTV, you can't do cash out. We just wanted to go to 80% LTV and payoff a higher loan we have, but that wasn't allowed.

Also, I forgot to mention, anything $417,000 and below gets the Conforming rate, but between $417,000 and the "new" conforming limit is called "Jumbo Conforming" and the rate is higher than the standard conforming (< $417,000).