Loan Programs

There are several loan programs available for borrowers to pursue homeownership or refinance their current mortgage.  Here are some brief overviews of the programs we typically offer to our clients.

Conventional Loans

A conventional mortgage, also referred to as conforming, follows the guidelines set forth by Fannie Mae and Freddie Mac.

Conventional loans usually offer lower interest rates than the government backed loans, and are ideal for borrowers with good to excellent credit.

Typical parameters for conventional loans

• 620+ Credit Score
• 20% down payment for purchase
• Fixed or Adjustable Rate
• No mortgage insurance if under 80% loan to value

FHA Loans

Insured by the Federal Housing Administration, FHA home loans are government-assisted alternatives to conventional financing.

FHA mortgage loans provide much more flexibility in regards to credit score, income, and down payment requirements. As the qualification requirements are less stringent and higher risk, FHA loans require a Mortgage Insurance Premium (MIP), as well as monthly mortgage insurance to be included in the loan and monthly payment.

FHA loans are great program as they enable homeownership to borrowers who otherwise don’t qualify for conventional financing.

Typical parameters for FHA Loans

• 580+ Credit Score
• Streamline Refinance an option
• Down Payment 3.5% for purchases
• Mortgage Insurance (MIP)

VA Loans

A VA Loan is a government backed program, typically having lower interest rates than conventional loans. VA Loans are available to retired military or those currently serving in the armed forces. Benefits can also extend to spouses.

The Department of Veterans Affairs requires a VA Funding fee when acquiring a VA Loan which usually ranges from 1%-3% of the loan amount.  This fee can be exempted with qualified disability.

Typical Parameters for VA Loans 

• 620+ Credit Score
• VA IRRRL Streamline Programs available for refinance
• Down Payment 0% for purchases
• No Mortgage Insurance

USDA Rural Development Loans

A USDA loan is a government backed loan guaranteed by the United States Department of Agriculture. It typically offers very low and competitive interest rates on home loans to borrowers with no down payment requirements.

Since the USDA Loan offers 100% financing to qualified buyers and closing costs can be paid by the seller or rolled into the loan, homebuyers usually do not have to bring any funds to closing.

There are a few requirements that must be met to be eligible for a USDA Home Loan. 

Typical parameters of USDA Loans

• 640+ Credit Score
• Down Payment 0%
• Subject to eligibility requirements and income limits

ARM Loans

Adjustable Rate Mortgages are an alternative to fixed rate mortgages, and typically an initial lower introductory rate than fixed mortgages. 

After the initial rate period ends, the rate becomes adjustable and is tied to the prime market rate.  The typical introductory rate is fixed for 3, 5 or 7 years with the payment based on a 30 year repayment schedule.
Many home owners or buyers utilize these loans if they have definitive shorter term plans for the property and either sell or refinance after the introductory rate expires depending on where the market rate is at that time.Typical Parameters for ARM Loans

• Lower introductory rate allows more buying power
• Credit score based on the program selected for ARM such as Conventional ARM or FHA ARM.
• Lenders qualify based on fully indexed rate