Conventional – Also known as a conforming loan programs, these loan programs have guidelines that are established by Fannie Mae and Freddie Mac (Agencies). They offer Fixed and Adjustable-rate options for Owner Occupants, Second home and Investment properties. The primary benefit of a conforming loan is they generally offer the best interest rates for borrowers because guidelines and file documentation requirements are established in a manner that reduces the likelihood of loan loss to the end investors. These programs are typically approved using an Automated Underwriting System (AUS) that can define reduced file documentation (income, asset or property) which can streamline the process for many borrowers.
FHA – The guidelines for this program were established to promote increased home ownership. Qualification guidelines are more lenient on credit and income qualifications. Additionally, the FHA program requires a down payment as low as 3.5% of the purchase price and is often a great fit for first time buyers. The FHA program has lower loan limits than conventional financing and mortgage insurance that can be higher than other programs. Flexible qualification guidelines allow the down payment and closing costs to be gifted. This loan is often refinanced into a conventional loan once a homeowner has a track record of on time payment and 20% or more equity.
VA – This program was established to promote home ownership for military veterans. Low and no down payment options are available and closing costs can come from a gift or grant. Only eligible military veterans and their spouses can be applicants. Loan amounts are based on property location and generally are lower than Conventional loan limits.
Down Payment Assistance (DPA) – DPA programs help homebuyers with loans or grants that reduce the amount they need to save for a down payment. These are programs generally meant for first time buyers (Or a repeat buyer if the applicants haven’t owned a home in over 3 years). The DPA is used in conjunction with an approved mortgage program and generally requires applicants to have low to moderate income for eligibility purposes. The program is for primary residences and requires the home to be in an approved property location (Census tract).
Reverse Mortgage - A homeowner who is 62 or older and has considerable home equity can borrow against the value of their home and receive funds as a lump sum, fixed monthly payment or line of credit. Unlike a typical conventional loan, a reverse mortgage doesn’t require the homeowner to make any loan payments. These loans support retired people who want to use the equity for either monthly income or one-time lump sums. They do not require income for eligibility and are liens against homes that are paid off once the property is sold or the owner(s) pass away.
Home Renovation - Allow borrowers to purchase a home that needs repairs and provides funds that are escrowed and disbursed as repairs are completed. Alternatively, they can be used to refinance a property that needs home improvements to complete or finish at home. These loans are generally first lien programs and therefore have much lower rates than second mortgages or unsecured loans. They also allow applicants to buy homes at a discount that need repairs and then complete the repairs after loan closing.
Manufactured Housing – Are programs designed for homes that are built offsite at a factory and installed on property. These programs allow for reduced down payments and offer more favorable terms than personal property or “chattel loans”. Restrictions apply to the type of home construction and how the home is established on the home site.
Jumbo - Also known as non-conforming loan programs, they allow borrowers to borrow loan amounts greater than conforming loan limits. Additionally, guidelines also can be more flexible by allowing different types of income calculations and validation. These programs generally require a larger down-payment.
Portfolio Lending - Provides borrowers with loan programs that often have more flexible guidelines to serve the "underserved" and or make exceptions to national guidelines based on the needs of the community.