FHA (Federal Housing Administration)
FHA loans are underwritten to comply with guidelines set forth by the Federal Housing Administration under the Department of Housing and Urban Development (HUD). FHA loans permit buyers to buy a home with a down payment as low as 3.5% and allow gift funds from family. FHA loans also allow financing of improvements or repairs whether buying or refinancing a home. Mortgage insurance is required, provided by HUD and requiring an up-front premium which is typically financed and a monthly premium which is paid as a part of the monthly house payment.
Buyers need not be first-time buyers and there are no income limits but loan limits do apply. FHA loans have been among our specialties for decades as a HUD Direct Endorsed (DE) Lender.
USDA RD (Rural Development)
Rural Development loans are underwritten to comply with guidelines set forth by the Rural Housing Service (RHS) under the United States Department of Agriculture (USDA). Available for buyers of primary residences in designated rural areas, these loans require no down payment and have somewhat more lenient credit guidelines than other types of loans. USDA guarantees the loan, requiring an initial guarantee fee which is typically financed and a monthly fee which is paid as a part of the monthly house payment.
Buyers need not be first-time buyers but household income and property location limitations apply. USDA loans are among our specialties as a leading lender with the program.
VA (Veterans Administration)
VA loans are underwritten to comply with guidelines set forth by the Veterans Administration for eligible veterans or eligible surviving spouses of veterans. VA loans permit eligible buyers to buy with no down payment and have somewhat less stringent credit guidelines than other loan types. The VA insures the loan, requiring a funding fee which is typically financed except for veterans with a qualifying VA-related disability.
Veterans are not limited to single use of this benefit but typically may only have one VA loan at a time. VA loans have been among our specialties for decades as a VA Lender.
Conventional loans are not insured or guaranteed by FHA, USDA or VA but typically conform to guidelines set forth by Government Sponsored Agencies (GSAs) Fannie Mae (FNMA, the Federal National Mortgage Association) or Freddie Mac (FHLMC, the Federal Home Loan Mortgage Corporation). When required, mortgage insurance is provided by private mortgage insurance companies (hence, PMI), which is typically when less than 20% down payment or equity in the property. PMI may be financed, in the loan and/or loan terms, paid by the lender and/or seller, and/or paid monthly.
Conventional loans continue to represent a significant amount of loan activity, typically for borrowers with above-average credit and/or down payment or borrowers or loans not eligible for FHA, USDA or VA loans.