Loan Programs
FHA Home Loans
Single family and multifamily homes are eligible for FHA loans. The Federal Housing Administration (FHA), a government organization, insures these home loans to improve housing standards and provide an adequate home financing system with mortgage insurance. The FHA guarantees loans against default. With government backing, banks can issue FHA loans without much risk or capital requirements.
Highlights:
- Suitable for those who may not qualify for traditional mortgage
- Ideal for first-time homebuyers who cannot afford to make large down payments
- Lower down payments (approx. 3.5%)
- Flexibility to add down payment assistance programs
VA Loans
Eligible veterans and their families can apply for VA loans with no down payment. The Veteran Administration (VA) insures lenders against default if a VA loan borrower defaults on a loan. Since VA loans are guaranteed, lenders offer more favorable terms, including lower interest rates.
With a VA loan, you can buy an existing single-family home, townhouse or condominium in a VA-approved project, new construction house, manufactured home or lot. You can also use a VA loan for home refinancing and certain types of home improvements.
Highlights:
- The best mortgage solution for eligible veterans and their families
- 100% financing and no down payment
- No private mortgage insurance (PMI)
- Lower interest rates
HELOC
A Home Equity Line of Credit (HELOC) is a revolving credit option that enables homeowners to borrow against the equity in their home. It acts like a credit card, where borrowers can access funds when needed, up to a predetermined credit limit, and pay interest only on the borrowed amount. In this case, you can use equity as collateral for the loan. Homeowners can use this line of credit for debt consolidation, home renovation, and emergencies.
As borrowers repay the principal, they can reuse the available credit during the draw period, which typically lasts 5 to 10 years. The draw period is followed by a repayment period, during which you will no longer have access to funds and must repay the outstanding balance over 10 to 20 years.
Highlights:
- Use your home equity for collateral
- Variable interest rates
- Suitable for paying previous debt, renovating home, etc.
USDA Loans
USDA loans offer low-income Americans with low credit an affordable way to buy their home. These loans are available at lower interest rates and backed by the U.S. Department of Agriculture (USDA). To qualify for a USDA loan, you must purchase a home within designated rural or suburban areas.
Highlights:
- Lower interest rates
- Great option for Americans with lower income
- Available for properties located in designated areas
Jumbo Loans
Jumbo loans finance homes with very high costs that a conventional conforming loan cannot cover. The maximum loan borrowable through a conforming loan is $766,550 in most counties, changing annually and set by the FHFA. Homes costing more than this amount require jumbo loan financing. Also known as non-conforming conventional mortgages, these loans are riskier for lenders since they lack government backing. Thus, lenders face losses if a borrower defaults.
Highlights:
- Available at fixed or adjustable rates
- Have a variety of terms
- Ideal for homes exceeding FHFA’s set amount
Conventional Loans
Conventional loans are mortgages that aren't backed by government agencies like FHA, VA, or USDA. Private lenders fund these loans. Borrowers must have higher credit scores to apply for conventional loans and make larger down payments. These loans offer varied terms and options: fixed-rate and adjustable-rate mortgages.
Highlights:
- Ideal for borrowers with strong credit history
- Require higher down payments
- Fixed-rate and adjustable-rate mortgage options
Reverse Mortgage
A reverse mortgage is available to homeowners aged 62 or above, enabling them to convert a portion of their home equity into cash without selling their home or making monthly payments. With reverse mortgages, lenders make regular payments to homeowners, eliminating the need for monthly mortgage payments. The payments can be in various forms: lump sum, a series of payments, or a line of credit.
Borrowers repay the loan when selling their home, moving out, or passing away. Reverse mortgages are ideal for retirees, offering additional income. However, this also means potentially reducing inheritance for heirs and accruing interest over time.
Highlights:
- Provide additional income to retirees
- No need to sell home or make monthly payments
- Flexible payment options
Non-QM Loans
Non-QM loans are ideal for borrowers who don’t meet traditional mortgages’ strict criteria. These loans offer flexibility in underwriting criteria, allowing lenders to consider factors beyond credit history and debt-to-income ratio. However, these loans have higher interest rates and require larger down payments to offset lender risk.
Highlights:
- Higher interest rates
- Larger down payment
- Ideal option for those with non-traditional income sources or lower credit scores
DSCR Loans
DSCR loans offer a flexible financing option for those who don't fit traditional mortgage criteria. Debt Service Coverage Ratio (DSCR) loans are ideal for real estate investors seeking loan options with no-income verification. Lenders use DSCR to determine whether a real estate investor can repay the loan based on rental income.
Highlights:
- Ideal for real estate investors with rental income
- Determines borrower ability based on rental income
- No personal income verification required