Posts by urbanhawk14

nimbleowl62 said:Help me out here, please 🤷

I’ve got a few things I’m trying to wrap my head around—specifically, is there even any point in opening one of those home savings accounts??
My wife and I are looking at picking up an apartment using a mortgage, maybe around
$70,000 total? We’re planning to put down about $10,000 of our own cash, which means
we’d be looking to borrow roughly $60,000.
So, here's the thing—does it actually make sense to open a specialized savings account, dump that $10,000 in there, and then
go apply for the mortgage after that? And also... are we going to be stuck signing up for life insurance
and having to keep up those monthly payments for years on end??
I’ve bounced around a couple of different banks already, and honestly, every single one tells me something different—"open this," "deposit that," blah blah blah 😕🤷....
What would you guys suggest? And if anyone knows, what kind of monthly payment are we looking at for a 25-year term
if we go through with all this??

Check out my previous posts in this same thread.

EDIT: Just wanted to give an update because Bank of America has CHANGED their mortgage insurance requirements AGAIN.

Here is what they are saying now for loans between $50,001 and $100,000:

MODEL 1

* borrower: creditworthy
* formal co-signer
* lien (mortgage) on the property in favor of the AFL-CIO
* fire insurance policy assigned to the AFL-CIO

MODEL 2

* borrower: creditworthy
* lien (mortgage) on the property in favor of the AFL-CIO
* fire insurance policy assigned to the AFL-CIO
* a savings deposit equal to 20% of the approved loan amount

They don't require co-signers anymore, but they are still being difficult (either a co-signer or a 20% deposit).

For loans between $15,001 and $50,000, the requirements are actually pretty reasonable now.

* borrower: creditworthy
* lien (mortgage) on the property in favor of the AFL-CIO
* fire insurance policy assigned to the AFL-CIO

----

Honestly, even though the requirements aren't as draconian as they were a few months ago, what really bugs me as a customer is how constantly they change. You never know where you stand. If I had known these would be the terms, I would have saved differently. :/

This whole situation with the Federal Reserve housing savings program is getting quite interesting. Either they are changing their terms constantly, or they just happened to update them right now—or maybe they’re actually keeping an eye on this forum! (: regardless, the requirements have shifted. Here is what I copied from this page () just a few days ago:

urbanhawk14 said:Since I'm nearing the end of my housing savings plan at the Federal Reserve, I've been following this discussion closely. I wanted to jump in with a question, but first, I thought I'd clear up a few things for those who might be a bit confused about how these housing loans currently work.

First off, Gaga23: there is no such thing as a "general purpose" loan once your housing savings are exhausted. You basically have two choices: a) withdraw your saved funds plus the interest earned, or b) take out a specifically designated housing loan. There isn't a third option.
Second, I see a lot of people mentioning bridge financing. I’ve had two separate meetings at the local Federal Reserve branch regarding housing savings, and they won't even entertain the idea of bridge financing. Their unofficial stance seems to be: sure, we technically offer it, but we aren't going to approve anyone because, well, we're in a recession. So, if you're counting on bridge financing—at least with this bank—don't hold your breath.

Now, for my actual question. I've been looking over the loan requirements (specifically the collateral terms) at the Federal Reserve after the savings period ends, and if I'm reading this right, they've changed the rules so that practically no one will ever qualify for a loan with them.

So, for a loan amount between $35,000 and $75,000 (which is roughly the starting point for any decent apartment), the terms are:

Model 1:

Borrower: creditworthy
A mortgage lien on the property in favor of the bank
Minimum loan-to-value ratio: 1:1.30
Property fire insurance policy assigned to the bank
2 individual creditworthy co-signers>

Or Model 2:

Borrower: creditworthy
A mortgage lien on the property in favor of the bank
Minimum loan-to-value ratio: 1:1.30
Property fire insurance policy assigned to the bank
1 individual creditworthy co-signer
A cash deposit equal to 25% of the approved loan amount>

I won't even get into the two co-signers requirement. Even if I didn't have my principles to consider, I wouldn't agree to that. After saving with them for years, and given a 1:1.30 loan-to-value ratio (!), they still demand TWO co-signers?

And this second model is even more nonsensical. One co-signer and a 25% cash deposit of the loan amount. For example, let's say I want to pull out a total of $100,000. That means I'd need to have saved $30,000 (30%), and then for the remaining $70,000 loan, I'd have to put down an additional 25% ($17,500). If I actually had $47,500 in cash sitting around (not to mention taxes and closing costs), I wouldn't even need the loan.

I'm curious to hear from anyone with recent experience. Are they really enforcing all of this?
Thanks!

And here are the new terms:

MODEL 1

Borrower: creditworthy
Mortgage lien on the property in favor of the bank
Fire insurance policy on the property assigned to the bank
2 joint creditworthy co-signers
MODEL 2

Borrower: creditworthy
Mortgage lien on the property in favor of the bank;
Fire insurance policy on the property assigned to the bank
1 individual creditworthy co-signer
1 savings deposit equal to 10% of the approved loan amount

Essentially, the terms look much more "normal" than what was posted on the site a few days ago. They are still actually quite strict, though—they require either two joint creditworthy co-signers or one co-signer plus a savings deposit of 10% of the loan (previously, it was an unreasonable 25%).

Let me review the example I used earlier.

Suppose I am buying a condo for $100,000. Let's say I put down $10,000 for the down payment (I'll ignore other costs for simplicity). That means I would be taking out a $60,000 loan. My own funds are $30,000, plus $6,000 (that's the 10% portion) which goes toward the savings deposit. In total, for a $100k condo, I would need to scrape together about half that amount. On top of that, I still have to find one creditworthy co-signer.

The bottom line: it's better than before, but still incredibly difficult given today's climate. It is certainly interesting to note how frequently these terms seem to change.

crimsonseal13 said:Since I don't have your specific data, I'm just making an assumption here... 🙂

Everything you're mentioning could simply be factored into the cost of a fixed-rate loan. For instance, in the European Union, variable-rate mortgages hover around 4% while fixed rates hit 7.8%; here, the situation is exactly the opposite.

And why did you even bother with a housing savings plan offered by someone selling a much more competitive product, like a standard commercial mortgage from the Federal Reserve?

Regarding your edit... I completely agree with you there. The logic fell apart once they introduced bridge financing—getting the loan immediately and saving up later. That's when the whole purpose of these savings plans started to vanish. You save for five years to cover installments, then ask for the loan.

Well, back when I first started saving, the lending terms were significantly different. Even then, the Federal Reserve had its own competitive products available.

To address both you and Kimberly Nguyen, I completely get why market conditions might require stricter credit insurance. However, I feel what the Federal Reserve is doing isn't actually about security; it feels more like they’re intentionally pushing away 95% of potential users. It's easy enough to walk away when someone tells you that you need a 30% down payment, two co-signers, and property that has to be worth way more than the actual loan amount.

In reality, I’d have to find someone willing to sell me a condo—which an official appraiser values at $120,000—for roughly $110,000. Then I’d have to scrape together $30,000, plus taxes, a hefty down payment, and a cushion for unexpected costs. On top of that, finding two co-signers nowadays feels like a bad joke; your only real shot is usually parents or relatives who aren't even over 55 yet.

*Edit: I noticed that for amounts over $80,000, the collateral requirements are actually less draconian (they ask for two or three joint co-signers, whereas for loans under $80k, they want two individual ones). This really makes me think the Federal Reserve just doesn't want anyone taking these specific loans.

If things stay this way, I’ll simply pass. I'll either save up a bit more cash to buy a cheaper place or just take out a "standard" 30-year mortgage. With those, I might only need one co-signer or even just life insurance, even if the variable interest rate ends up being something like 7.5%. It feels like the bank is forcing me toward a much worse deal, despite all those "home sweet home" advertisements promising that their savings plan is the easiest way to become a homeowner.

crimsonseal13 said:For those who don't believe me, let me clarify: the way housing savings programs work is nothing like traditional commercial banks. They operate more like a mutual aid fund where everyone contributes over time, and then loans are issued from that collective pool. That pool is built from savers' contributions, loan repayments, interest, and dividends. Unlike a major bank, a housing program can't just go out into the international market and borrow money from someone else. If a borrower defaults, the program loses our private money directly.

I don't quite follow your comment about this being "borderline fraudulent." It sounds like you might have had a lower credit score, which led to a denial or requests for extra collateral. To me, that makes perfect sense because it protects MY savings from the RISK of someone failing to pay it back.
And I'm certain that once your term ended, you received all your principal, dividends, and interest, so there truly isn't any evidence of fraud there...

That's an assumption, and it seems you might have misread my original post.

The idea that my savings are at risk because some other saver fails to repay their loan feels like a bit of a stretch to me, though that isn't really my point.

No one is questioning my creditworthiness. I haven't actually finished my savings plan yet, so no formal assessment has taken place. But even when it does happen, I'm confident my credit score will be solid.

What I am addressing is how the insurance requirements have CHANGED (it actually feels like they've shifted several times) over the last few years—right during the time I've been saving. They've evolved into something that seems designed specifically to discourage people from taking out loans through these housing savings programs, mainly because the insurance costs are unreasonably high.

Rather than getting bogged into a debate about whether requiring two co-signers plus a mortgage at a 1:1.3 ratio is excessive, the easiest way to show you is to look at the insurance instruments at the SAME bank (Federal Reserve) for a standard mortgage not tied to a savings plan. Those rates are significantly lower; you can choose an option with just one co-signer or even none at all:

http://www.wellsfargo.com/my/bank/mortgage_rates_type=Citizen

My main takeaway is this: the bank doesn't actually want savers using their housing program to get favorable fixed-rate loans, so over the last two years, they've set such strict insurance hurdles that they effectively scare off almost every customer.

I didn't say it was outright fraud, because a bank is free to set its own lending terms. But it certainly feels borderline. Just imagine if, tomorrow, the bank told us they wouldn't issue a single loan unless we provided ten different co-signers.

*edit: Someone might argue that the whole point of these savings plans is to build up bonds rather than buy a home, but I don't see it that way. Based on the name, the mechanics, and what was presented to me at the local branch two years ago, it seemed like a perfectly valid way to tackle the housing market.

Benjamin Rodriguez2 said:That's just how it goes with inter-financing everywhere else too—well, at least it was when I was poking around about a year ago. They technically have the tools, but they don't actually want to use them. 🙂

And regarding glede jamac, take Wells Fargo for example; they only ask for one guarantor, and it can even be a spouse. You could almost think the folks over at the Federal Reserve housing department just want savers who will sit on money to chase some incentive, only to pull it all out later. But seriously, who's going to bother saving once those incentives dry up? I guess they just don't want their own loans competing with their own banking products. Or maybe we're just looking at some tightened "recessionary" lending rules?

In my opinion, these are rigged terms designed to ensure nobody actually lands a favorable fixed-rate loan. It feels borderline predatory toward customers like me; when I first started my home savings plan, I had no idea the requirements would become this unreasonable. Back then, you didn't even need a guarantor, but now they're demanding two.

Since I'm nearing the end of my housing savings plan at the Federal Reserve, I've been following this discussion closely. I wanted to jump in with a question, but first, I thought I'd clear up a few things for those who might be a bit confused about how these housing loans currently work.

First off, Gaga23: there is no such thing as a "general purpose" loan once your housing savings are exhausted. You basically have two choices: a) withdraw your saved funds plus the interest earned, or b) take out a specifically designated housing loan. There isn't a third option.
Second, I see a lot of people mentioning bridge financing. I’ve had two separate meetings at the local Federal Reserve branch regarding housing savings, and they won't even entertain the idea of bridge financing. Their unofficial stance seems to be: sure, we technically offer it, but we aren't going to approve anyone because, well, we're in a recession. So, if you're counting on bridge financing—at least with this bank—don't hold your breath.

Now, for my actual question. I've been looking over the loan requirements (specifically the collateral terms) at the Federal Reserve after the savings period ends, and if I'm reading this right, they've changed the rules so that practically no one will ever qualify for a loan with them.

So, for a loan amount between $35,000 and $75,000 (which is roughly the starting point for any decent apartment), the terms are:

Model 1:

Borrower: creditworthy
A mortgage lien on the property in favor of the bank
Minimum loan-to-value ratio: 1:1.30
Property fire insurance policy assigned to the bank
2 individual creditworthy co-signers>

Or Model 2:

Borrower: creditworthy
A mortgage lien on the property in favor of the bank
Minimum loan-to-value ratio: 1:1.30
Property fire insurance policy assigned to the bank
1 individual creditworthy co-signer
A cash deposit equal to 25% of the approved loan amount>

I won't even get into the two co-signers requirement. Even if I didn't have my principles to consider, I wouldn't agree to that. After saving with them for years, and given a 1:1.30 loan-to-value ratio (!), they still demand TWO co-signers?

And this second model is even more nonsensical. One co-signer and a 25% cash deposit of the loan amount. For example, let's say I want to pull out a total of $100,000. That means I'd need to have saved $30,000 (30%), and then for the remaining $70,000 loan, I'd have to put down an additional 25% ($17,500). If I actually had $47,500 in cash sitting around (not to mention taxes and closing costs), I wouldn't even need the loan.

I'm curious to hear from anyone with recent experience. Are they really enforcing all of this?
Thanks!

I decided to head out right after the first set ended, which was probably a smart move since the show was short anyway—staying might have just left me feeling frustrated. The opening acts started off rough, but they actually really found their groove and sounded great by the end. Even the headliners kept getting better as the night went on!
The PTYD set had some awesome music (Weezer
All in all, it was a pretty decent night, maybe a solid 4-

Donna Kern26: Plus, they're actually relevant right now since they just dropped a new album.
Minus, that album is honestly pretty terrible.

Kraftwerk: Meh.

Let's find something better to talk about...

I don't really want to weigh in on whether the band is good or bad since I don't listen to them much, but I did catch their set on MTV back in the day, and I don't recall the singer having such a raspy, strained voice. Just a heads-up if you're planning to catch them live—it might be a bit of a letdown.