Finding Your
Loan Program
FHA LOAN*
-
An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). FHA offers low down payments and interest rates may be less impacted by the borrower’s credit score. Gift funds may be acceptable with FHA financing. The debt to income requirements are less stringent as compared to conventional, which often means more purchasing power. It is typically fixed in its terms and rate and terms over the life of the loan.
-
Qualification
FHA loans can be easier to qualify for. The requirements for an FHA loan are generally more lenient than conventional loans or other loan types when it comes to credit, income, and down payment requirements.
Low down payment
With FHA loans, you don’t need a large down payment to become a homeowner. You could put down as little as 3.5% for a fixed-rate FHA loan if your FICO score is high enough.
Credit score
To qualify for the low down payment of 3.5%, you need to meet a minimum FICO score specified by your lender. This score can vary from lender to lender, but FHA score requirements are generally lower than the requirements of other loans, including conventional.
Housing options
You can use an FHA loan on several property types, including a single-family home, a multifamily home with up to four units, a condo, or a manufactured home.
However, you can only use an FHA loan to buy a home you plan to live in as a primary residence. To finance a vacation home or investment property, you’ll need to consider another type of loan.
-
The FHA sets lower credit score limits for borrowers as well as a 3.5% minimum down payment.
The FHA has determined different price ceilings when it comes to the purchase price of the home. These caps vary according to location and are regularly updated.
Income and employment is an eligibility factor in regards to FHA loans. Lenders require that a borrower can show proof of steady employment with “effective income.”
The home being purchased or refinanced must be the borrower’s primary residence.
VA LOAN*
-
Description text gA VA loan is a mortgage loan program established by the United States Department of Veterans Affairs to help veterans and their families obtain home financing. VA offers 100% financing with no mortgage insurance. A VA Certificate of Eligibility is required to apply for a VA loan. Gift funds may be acceptable. The debt to income requirements are less stringent as compared to conventional, which often means more purchasing power. It is typically fixed in its terms and rate and terms over the life of the loan. oes here
-
No prepayment penalties
No private mortgage insurance (PMI)
100% financing with full VA entitlement
No Down Payment
Fixed- and adjustable-rate mortgages
VA financing fees can be “rolled” into the loan amount
Variety of eligible property types, including townhomes and VA-approved condos
-
Your length of service or service commitment, duty status and character of service determine your eligibility for specific home loan benefits.
USDA LOAN
-
The USDA Loan is a mortgage option available to some rural and suburban homebuyers. USDA Home Loans are issued by qualified lenders and guaranteed by the United States Department of Agriculture (USDA).
-
$0 down, 100% financing + required guarantee fee = 102% of the appraised value
Low FICO score requirements
Low interest rates
Low closing costs
Gift funds can be used for closing costs
30-year, fixed-rate mortgage
-
Eligibility is based on the property size, location and condition along with income and other qualifying factors. Some of these requirements include:
Property must be located in a USDA designated rural area
Maximum loan limits vary based on location
Household members can have a total income of up to 115% of the medial income for the area
Household must be able to afford the mortgage payment, including property taxes, homeowners insurance and the annual guarantee fee payable on a monthly basis
CONVENTIONAL LOAN
-
A conventional loan is a type of mortgage that is not part of a specific government program, such as Federal Housing Administration (FHA), Department of Agriculture (USDA) or the Department of Veterans’ Affairs (VA) loan programs. However, conventional loans are commonly interchangeable with “conforming loans”, since they are required to conform to Fannie Mae and Freddie Mac’s underwriting requirements and loan limits.ere
-
There’s a reason why conventional loans are so popular. This type of loan has several features that make it a great choice for most people:
Low interest rates
Fast loan processing
Diverse down payment options, starting as low as 3% of the home’s sale price
Various term lengths on a fixed-rate mortgage, ranging from 10 to 30 year
Reduced private mortgage insurance (PMI)
Because conventional loans offer so much flexibility, there are still some decisions you have to make even after you choose this loan type. You’ll also have to consider how much you can put down, how long you want your loan term to be, and how much house you can afford.
-
Because these loans aren’t backed by the government, lenders require borrowers to meet three basics:
1. Down Payment
Typically 3–25% of the home’s value, depending on credit and finances. Some lenders allow as little as 3% for qualified first-time buyers. A larger down payment builds instant equity.2. Stable Income
Monthly mortgage payments (including taxes/insurance) should be no more than 28% of your income, and total debt (including car/student loans, credit cards, etc.) no more than 36%.3. Good Credit
Most lenders require a minimum credit score of 620 for approval.
RENOVATION LOAN
-
Turn a Fixer Upper into Your Dream Home
When shopping for a home, you may come across properties that aren’t quite what you’re looking for but have the potential to be your dream home with some repairs or renovations. With a renovation loan, you can roll the cost of financing or refinancing a home and repairs into one loan , saving you time and money.
-
HomeStyle Renovation Loan
You can use a HomeStyle renovation loan to cover costs of repairs, remodels, renovations or energy-efficient improvements on a primary residence, a second home or an investment property. There are no required improvements or restrictions on the types of repairs allowed or a minimum dollar amount for the repairs. However, repairs or improvements must be permanently affixed to the real property, add value to the property, and be completed by a licensed contractor.
Limited 203(k) Rehabilitation Mortgage
In addition to funding your new home, an FHA Limited 203(k) can provide up to $35,000 (including a contingency reserve) in additional funds to help make a few non-structural repairs or renovations such as updating a kitchen or bathroom, adding new flooring, purchasing new appliances, or repairing the roof.
203(k) Rehabilitation Mortgage
If your potential dream home needs more than $35,000 in renovations or the repairs are structural, the Standard FHA 203(k) might be the right solution for you. This program removes the restrictions of the limited option to allow for major home remodeling. A Standard FHA 203(k) can provide additional funds to help with eligible repairs including moving or removing walls, minor pool repairs, and landscaping.*
*Final disbursement of funds is subject to final inspection. -
Eligibility for a renovation loan varies by property and borrower, but generally requires sufficient home equity, a qualifying credit score, and proof of stable income.
REFINANCING
Visit Our “Refinancing 101” Breakdown
HERE
FHA LOAN PROGRAMS
Fixed-Rate Mortgage
Fixed-rate mortgages protect you against rising rates since the interest rate remains the same for the entire term of the loan. With FHA loans, you can select a 30-, 20- or 15-year term. The main difference is the lower term options have higher monthly payments, which also means you are building home equity faster. Keep in mind you can use equity as a down payment for your next home or a future cash-out refinance. If you plan on staying in your home for a longer time frame, a fixed-rate mortgage could be the right solution for you.
Streamlined Refinance
If you currently have an FHA mortgage, we may be able to help you reduce your interest rate and lower your monthly mortgage payments with an FHA streamlined refinance. Plus, a streamlined refinance requires limited borrower credit documentation and underwriting for an even easier process. This may be the right solution if you want to convert your ARM to a fixed-rate loan.
Adjustable-Rate Mortgage
FHA’s adjustable-rate mortgage (ARM) insures home purchases or refinances with rates that can change after the initial fixed-rate period. Depending on market fluctuations after this initial fixed-rate period, your monthly payments could change due to rates increasing or decreasing. An ARM could be the right choice for you if you plan on staying in your home for just a few years, you’re expecting a future pay increase, or the current interest rate on a fixed-rate mortgage is too high.
VA LOAN PROGRAMS
Purchases & Cash-Out Refinance
VA-guaranteed loans are available for homes for your occupancy or a spouse and/or dependent (for active duty service members). To be eligible, you must have satisfactory credit, sufficient income to meet the expected monthly obligations, and a valid Certificate of Eligibility (COE).
Native American Direct Loan (NADL) Program
The NADL program helps Native American Veterans purchase, construct, improve, or re-finance a home on Native American trust lands. Your tribal organization must participate in the VA direct loan program. You must have a valid Certificate of Eligibility (COE).
Adapted Housing
Grants
VA helps Veterans with certain total and permanent disabilities related to your military service obtain suitable housing with either a Specially Adapted Housing (SAH) or Special Housing Adaptation (SHA) grant.
Interest Rate Reduction Refinance Loan (IRRRL)
The IRRRL is a “VA to VA” loan, meaning it can only be done if you have an existing VA guaranteed loan on the property. The IRRRL is generally performed to lower the interest and reduce the monthly payment on the existing VA guaranteed loan.