Mortgage Programs

Conventional

Conventional Loans, also known as Fannie Mae and Freddie Mac loans, will often present a borrower with their lowest payment and cost option IF the borrower has a 20% down payment or equity stake and a high credit score of 720 or above. If the borrower has less than 20% equity and a lower credit score, pricing adjustments by Fannie/Freddie often make other programs such FHA, VA or USDA worth a look.  Conventional Mortgages have the following key attributes:

  • Typically the best program for borrowers with high credits scores and available down payment funds.
  • Lower Mortgage Insurance requirements than FHA
  • Down payment as little as 3% available
  • No prepayment penalties

 

 FHA

FHA Mortgages are government mortgages that are backed by HUD and have the  following key attributes:

  • 3.5% down payment required with minimum 580 credit score
  • Up to 6% seller assistance to pay closing costs
  • Down payment can be a gift from a relative or employer
  • Allows for lower credit scores than Conventional mortgages
  • More flexible debt to income ratios than Conventional mortgages
  • Chapter 7 Bankruptcies ok after discharged 2 years
  • Chapter 13 Bankruptcies ok if court approved and no missed payments
  • Foreclosures ok after 3 years from deed transfer
  • No prepayment penalties

 

USDA

The USDA Mortgage Program provides No Down Payment 100% financing for borrowers purchasing homes in a USDA eligible area. The USDA Mortgage Program also provide 100% financing for borrowers refinancing their home in a USDA eligible area.  USDA Mortgages have the following key attributes:

  • 100% financing based on appraised value
  • More flexible credit requirements than Conventional
  • First Time Buyers and Previous Homeowners are welcome
  • Less cash due at closing than Conventional or FHA mortgages, most purchase closings have no or little money due at closing
  • 30 year fixed rates only
  • No prepayment penalties
  • Closing costs can be financed for purchases based on appraised value, resulting in no money due at closing

 

VA

The Veterans Administration loan program enables veterans and active duty personnel to purchase or refinance a home with favorable loan terms.  Key attributes of the VA Mortgage Program include:

  • 100% financing available, no down payment required
  • Seller assistance allowed up to 6% of the sales price
  • More flexible credit requirements than Conventional
  • Available for qualified military veterans or active duty personnel
  • No monthly Mortgage Insurance even with 100% financing
  • No prepayment penalties