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February 26, 2009

Conforming Loans Lead the Way

Conforming loans are about the only option these days for those prospective buyers who have less than a 20% down payment. Though this loan amount is poised to increase to $729,750 soon, it is currently set at $625,500. Along with that down payment, you’ll need acceptable credit scores and incomes.

So what’s available for up to $695,000, assuming you’re working with a 10% down payment? Quite a bit of inventory, it seems. There are 210 single-family houses on the market, ranging in price from $179,000 for a 625-square foot, one-bedroom short sale house that’s tenant occupied in Bayview, to a three-bedroom home in Bernal Heights on College Terrace. In addition to Bernal and Bayview, neighborhood selections include Merced Heights, Ingleside, Outer Sunset, and Sunnyside.

There are 493 condos available, but it’s important to have your lender or mortgage broker review a particular building prior to even considering making an offer. Lenders are hesitant to lend on condo buildings, so there are further limitations to what you may be able to purchase.

I’d recommend considering properties priced as high as $725,000-$750,000, as your chances of negotiating for what you can afford increase the longer the property sits on the market–presuming you have a motivated seller on hand.

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