PMI Mortgage Insurance Co. is raising its loan-to-value ratios and lowering its minimum credit score requirements in distressed markets. But two distressed states got some bad news.
The enhanced guidelines were disclosed in a bulletin from the Walnut Creek, Calif.-based company.
PMI said it is raising the LTV to 95 percent on purchase transactions in distressed markets. The higher LTV, which is available to borrowers whose credit scores are at least 720, also applies to rate-term refinances.
In addition, the minimum credit score has been reduced to 680 as long as the LTV doesn’t exceed 90 percent on one-unit properties and condominiums. Co-ops are limited to 85 percent LTV.
All of the scenarios require a maximum debt-to-income ratio of 45 percent.
The updated guidelines became effective Monday.
“We are encouraged that market conditions have improved sufficiently to enable PMI to expand LTV and minimum credit-score requirements,” the bulletin stated.
Also effective with the changes Monday were the removal of two California markets, one Georgia market and a Maryland-West Virginia market from the mortgage insurer’s distressed markets list.
But the news wasn’t all positive.
On July 1, PMI will add the entire states of Arizona and Florida to its distressed markets list. In addition, attached housing in Florida will be ineligible for insurance.
