• Hillary C

Government Loans


FHA LOANS

An FHA is a government mortgage loan that is insured by the Federal Housing Administration. These loans typically have more attractive rates for borrowers at a credit score below 700 as well as less stringent requirements. The purpose of the home being purchased must be for it to be owner-occupied. No investment properties! These loans can be used to secure financing on single family homes, town homes, or condominiums. It can be used to secure up to a 4-unit property, in which one unit must be owner-occupied.

FHA loans do require mortgage insurance that lasts for the life of the loan unlike conventional mortgage insurance is cancelled once you reach 22% equity. The terms of this mortgage insurance is not tiered based on credit score, but the monthly mortgage insurance does decrease if you make a down payment of 5% rather than 3.5%. FHA loans allow for a minimum down payment of 3.5% and the loan amount can go all the way up to $625,500.

When purchasing a Condominium using an FHA loan, the requirements are slightly more strict. Be sure the entire condominium development is "FHA Approved" before moving forward with an offer. FHA Approval lookup can be found here, https://entp.hud.gov/idapp/html/condlook.cfm

VA LOANS

VA loans are also government loans and are guaranteed by the U.S. Department of Veterans Affairs (VA). This means if a borrower defaults on their loan, the VA will assist with covering the lender's loss. These loans are offered to those who have served or are serving in the U.S. military and are purchasing or refinancing a primary residence.

VA loans allow for a 0% down payment depending on the purchase price, and often have more favorable interest rates. The minimum down payment requirement will be tied to the amount of VA Eligibility. If you have full eligibility on your VA loan, you can get financing with 0% down up to $636,150 in the DC area. For every dollar you spend above $636,150, you’ll need to put down .25. So for a property priced at $716,150 your down payment is $20,000. Or on a property priced at $1,000,000, your down payment is $90,963.

Rather than Mortgage Insurance, VA loans have a "funding fee", unless the home buyer is exempt due to disability. This funding fee will depend on the type of military member (active vs reserves) and the amount of down payment. It can be paid up front in cash as part of the Veteran's closing costs, or financed into their loan amount. Whether or not this is their first time using their VA eligibility will also have an impact.

Funding fee amounts: https://www.benefits.va.gov/homeloans/documents/docs/funding_fee_table.pdf

#FHA #VA #loanprograms #homepurchase

HC

This website is for informational purposes only. The information contained herein can change at any time, and there is no representation to the accuracy contained herein. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. Please note that the pre-qualification does not constitute a commitment or a loan approval but is instead a preliminary assessment of your current credit worthiness. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Main Street Home Loans is not a Financial Advisor, Tax Consultant or Credit Repair Company. Please make sure to consult your own Financial Advisor, Tax Consultant or Credit Repair Company regarding your specific financial situation. Veterans Affairs loans require a funding fee, which is based on various loan characteristics. VA 580 FICO – Purchases only, must have Automatic Underwriting System (AUS) approval. No cash-out under 600. On a USDA Loan 100% financing, no down payment is required. The loan amount may not exceed 100% of the appraised value, plus the guarantee fee may be included. On FHA loans, LTV’s of up to 96.5% for FHA loans. FHA 580 FICO – Credit score below 600 requires Automatic Underwriting System (AUS) approval. Fixed rate loans only. W2 transcript option not permitted. APR describes the interest rate for a whole year (annualized), rather than just a monthly fee/rate. The APR allows a borrower to compare costs of credit because it factors in term, interest rate and fees associated with the loan. Adjustable rate mortgages (ARMs) are home loans with a rate that varies. Your interest rate and monthly principal and interest (P&I) payments will remain the same for a defined initial period, then adjust annually when that initial period is over. During the adjustable period, there will be an interest rate cap that sets a limit on how high your interest rate can go. This product is primarily for a borrower with good credit (min 680 FICO) but a low Loan-To-Value (95% max). Debt-to-income ratios apply. Investment condominiums not allowed. Refinancing an existing loan may result in the total finance charges being higher over the life of the loan. Down payment assistance programs may require an educational class be taken. Down payment assistance programs are typically second mortgages that require the borrower to apply for a first mortgage. Testimonials appearing on this advertisement and Zillow, Yelp, Facebook, Twitter or other social media outlets are individual experiences of those who have used our services. Main Street Home Loans. does not provide incentives for testimonials or reviews. Any customer reviews on or before February 5, 2019 are for services performed prior to employment with Main Street Home Loans. MLO licensing information: DC MLO143670; VA MLO-740VA; MD 5762. Main Street Home Loans is a Division of NFM, Inc. NMLS 2893. NFM, Inc. is licensed by: DC # MLB2893; Virginia Mortgage Lender and Broker, Licensed by the Virginia State Corporation Commission # MC-2357; MD # 5330. For NFM, Inc.’s full agency and state licensing information, please visit www.nfmlending.com/licensing. NFM, Inc.’s NMLS #2893 (www.nmlsconsumeraccess.org). NFM, Inc. is not affiliated with, or an agent or division of, a governmental agency or a depository institution. Copyright © 2019.

 

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