Declining Real Estate Market – High/Low Risk States

Currently mortgage products and guidelines change almost daily with regards to the high risk Real Estate market. Guidelines became more strict and demanding. Due to declining property values or oversupply, some banks do not originate loans in the high risk States or Counties. Some banks might impose additional overlays or restrictions (such as, but not limited to: maximum Loan-to-Value ratio, maximum Debt-to-Income ratio, minimum Credit Score, loan amount limitations, documentation age, Home Equity loans and simultaneous transaction requirements) – especially for Cash-out refinance, Interest-only payment feature, 2-4 unit properties, Investment transactions. Lenders might provide different rates and adjustments for different States.

Market Classification Levels

 

Lower Risk	Moderate Risk	Higher Risk
Colorado	Arkansas	Arizona
Delaware	Connecticut	California
Idaho	Hawaii	District of Columbia
Kentucky	Indiana	Florida
Maryland*	Mississippi	Illinois
Massachusetts**	New Jersey	Michigan
Minnesota	Ohio	Nevada***
New Hampshire	Pennsylvania	New York
Oregon	South Carolina	Rhode Island
Utah	Tennessee	Virginia
Washington	West Virginia
Wisconsin

 

 

 

 

Exceptions:

*Maryland – High risk:  Calvert County, Charles County, Frederick County, Montgomery County, Prince George’s County

**Massachusetts – Moderate risk:  Barnstable County, Bristol County, Worcester County

***Nevada – Low risk:  Carson City

 

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