Loan Programs
Conventional Loans
Conventional or conforming loans refer to any mortgage that is not insured by the federal government. These types of mortgages follow the terms and conditions set by Fannie Mae and Freddie Mac. They are government sponsored institutions who are the largest purchasers of mortgages in the United States. These loans have stricter qualifying guidelines compared to government insured loans. High credit scores are recommended for this program since it will directly impact your monthly mortgage payment. Your debt to income ratio is also carefully reviewed and needs to be below 45%. A common misconception about conventional mortgages is that a 20% down payment is required in order to qualify. The reality is conventional financing allows for 3% down payment when used in combination with monthly mortgage insurance.
Conventional loans are one of the best options for prospective borrowers with high credit scores. By having a higher credit score additional benefits become available like no mortgage insurance, lower down payments, and more competitive pricing. When considering a new home loan conventional financing should be at the top of the list if you have above average credit, a larger down payment, or would like to avoid the additional cost sometimes associated with government insured loans.
- Competitive pricing
- No prepayment penalty ever
- No mortgage insurance option
- Up to 45% debt to income ratio
- Allows for 3% seller paid closing costs
- 4 Years from Foreclosure or Short Sale
- 4 Years from Discharge of Chapter 7 Bankruptcy
- 2 Year from Discharge of Chapter 13 Bankruptcy
Conventional Purchase
- Loan amounts to $417K
- 3%, 5%, 10% or 20% down
- Don’t have to be 1st time buyer
- With or without mortgage insurance
Conventional Refinance
- Competitive interest rates
- Loan amounts up to $417K
- 30yr, 25yr, 20yr, 15yr, or 10yr
- Fixed or adjustable rates available
Conventional Cash Out
- Up to 80% LTV
- Competitive interest rates
- Payoff a 2nd mortgage or HELOC
- Cashout to payoff high interest debt
VA Loans
The VA (Veterans Administration) guaranteed home loan is the preferred loan program for active, non-active, Reserve, National Guard, and retired military of the armed forces because there is no down payment needed and no private monthly mortgage insurance required. While most people believe that the VA lends money directly to veterans, it actually just insures the mortgage financed by VA-approved lenders.
VA loans are one of the best options available for veterans that would like to purchase a home or refinance their current VA mortgage. The VA program allows veterans to purchase a home with no down payment and 100% financing. In addition to this monthly mortgage insurance is not required which makes the VA program one of the most affordable options available. If a veteran is already on a VA loan they can take advantage of a reduced documentation refinance by using the streamline program to lower their payments.
- No down payment
- No mortgage insurance
- Credit scores down to 600
- No prepayment penalty ever
- Up to 50% debt to income ratio
- A VA loan may also be assumable
- Allows for 4% seller paid closing costs
2 Years from Foreclosure or Short Sale
2 Years from Discharge of Chapter 7 Bankruptcy
1 Year from Discharge of Chapter 13 Bankruptcy
Wartime Veterans Who Were Not Dishonorably Discharged And Served At Least 90 Days:
- World War II – September 16, 1940 to July 25, 1947
- Korean Conflict – June 27, 1950 to January 31, 1955
- Vietnam Era – August 5, 1964 to May 7, 1975
- Persian Gulf War – Check with VA regional office for specific eligibility
- Afghanistan and Iraq – Check the VA’s Website for eligibility guidelines for current service in Afghanistan and Iraq
Reserves And National Guard
Members who have completed six years of service and have been honorably discharged (or are still serving) may be eligible for a VA loan. Contact your regional VA office for more details.
Peacetime Service
Peacetime service of at least 181 days of continuous active duty with no dishonorable discharge. If you were discharged earlier due to a service-connected disability, you should speak with the regional VA office to verify eligibility.
- July 26, 1947 to June 26, 1950
- February 1, 1955 to August 4, 1964, or
- May 8, 1975 to September 7, 1980 (enlisted) or to October 16, 1981 (officer)
- Enlisted veterans whose service began after September 7, 1980, or officers whose service began after October 16, 1981, must normally have served at least two years.
- Other Types Of Service That May Make You Eligible For A VA Loan:
- Certain US citizens who served in the armed forces of a government allied with the United States during World War II
- Surviving spouses of eligible persons who died as the result of service or service-connected injuries. The surviving spouse must not have remarried
- The spouse of any member of the Armed Forces serving on active duty who has been listed as a prisoner of war or missing in action for more than 90 days
Standard VA Purchase
- Flexible approval process
- You can reuse VA benefits
- Higher loan limits available
- Don’t have to be 1st time buyer
VA Streamline Refinance
- No appraisal required
- No income verification
- Reduced documentation
- Competitive interest rates
USDA Loans
The United States Department of Agriculture (USDA) has developed several loans to help low- to moderate-income borrowers to purchase or refinance a home in a designated rural area. The mission of USDA Rural Development’s Single Family Housing Guaranteed Loan Program is to assist rural home buyers achieve their dream of homeownership. For those who qualify, 100% financing is available, allowing the dream of home ownership to be within reach. With low interest rates and flexible guidelines a USDA home loan could help you achieve your financial goals. Many homeowners are surprised to find out how many properties just outside major cities qualify for a USDA loan even though they are anything but “rural”.
USDA loans are a very attractive option for borrowers who want to purchase a home or refinance their current USDA mortgage. USDA loans are for rural areas but rural does not necessarily mean remote. Do not assume that the eligible properties are all located miles and miles from civilization. A quick eligibility check will allow you to track down homes that meet the USDA guidelines. Guess what? Many of them are in close proximity to some of the nation’s fastest growing metro areas. USDA financing is one of the only mortgages available other than those for members of the US military that offer zero money down. It is an excellent option for those with low to moderate incomes or less than perfect credit. Payments are kept affordable, thanks to the fact that the loans are 30-year fixed rate mortgages.
- No down payment
- Credit scores down to 600
- No maximum purchase price
- Up to 50% debt to income ratio
- Easy to use gifts for closing costs
- Allows for 6% seller paid closing costs
- 3 Years from Foreclosure or Short Sale
- 2 Years from Discharge of Chapter 7 Bankruptcy
- 1 Year from Discharge of Chapter 13 Bankruptcy
As part of the American Recovery and Reinvestment Act that came about in 2009, the requirements for USDA home loans have become more streamlined and opened the door for higher eligibility rates. Borrowers must still meet certain income requirements and provide a credit report; however, the guidelines are not as strict as they were previously. Below are the top eligibility requirements to get familiar with before you consider a USDA loan.
Geographic Area. The home you are buying must be in one of the geographically qualifying areas which are designated as Rural for USDA Loans.
Property Type. The home you are buying must be a single family residence. It must also be your primary residence
Credit. All USDA Loans require a credit score of a least 600 or higher to qualify.
Debt Ratio. Typically with a full approval your total debt to income ratio can be as high as 50% in some cases.
Income Limit. USDA Loans have a maximum income limit for the median income in your area. If you make more money than the limit, you will not qualify. There are different brackets for determining the maximum income allowed. Those are determined by your geographic area and the number of people living in the household.
Standard USDA Purchase
- Up to 102% LTV
- 30 year fixed only
- No maximum purchase price
- Closing costs can be financed
USDA Streamline Refinance
- No appraisal needed
- No income verification
- Reduced documentation
- Must lower your rate by 1%
Standard VA Purchase
- Flexible approval process
- You can reuse VA benefits
- Higher loan limits available
- Don’t have to be 1st time buyer
VA Streamline Refinance
- No appraisal required
- No income verification
- Reduced documentation
- Competitive interest rates
FHA Loans
The Federal Housing Administration (FHA) was created out of the National Housing Act of 1934, and was established to increase home ownership and provide affordable housing opportunities for all Americans coming out of the Great Depression. While most people believe that the FHA lends money directly to borrowers, it actually just insures the mortgage financed by FHA-approved lenders.
FHA loans are by far the easiest mortgage loans to qualify for due to the flexible credit guidelines and the low down payment requirements. A borrower who cannot afford a traditional down payment of 20% or has gone through a financial hardship like a short sale, foreclosure or bankruptcy can benefit the most from the FHA program.
- 3.5% down payment
- Credit scores down to 600
- No prepayment penalty ever
- An FHA loan may also be assumable
- Up to 50% debt to income ratio
- Allows for 6% seller paid closing costs
- Easy to use gifts for down payment and closing costs
- Allows for non-occupying co-borrowers to help qualify
- 3 Years from Foreclosure or Short Sale
- 2 Years from Discharge of Chapter 7 Bankruptcy
- 1 Year from Discharge of Chapter 13 Bankruptcy
Standard FHA Purchase
- Most popular FHA program for home purchase
- Fixed and ARM rates available
- 1-4 unit properties eligible
- 3.5% down payment
HUD REO $100 Down Program
- Most popular HUD foreclosure program
- No appraisal needed
- Allows for repairs up to $5K
- $100 down payment
FHA Streamline Refinance
- Most popular FHA refinance program
- No appraisal required
- No income verification
- Reduced documentation
FHA Cash Out Refinance
- Debt consolidation OK
- Cashout up to 85% LTV
- Debt to income ratio to 50%
- Fixed and ARM rates available
