A Conventional Loan is any type of loan that is not offered or secured by a government agency such as the Department of Veterans Affairs (VA), Federal Housing Administration (FHA) or the USDA Rural Housing Service but rather by a private lender or institution.  These loans must however adhere to the guidelines set by Fannie Mae and Freddie Mac and may have either fixed or adjustable rates.  Homebuyers can shop various mortgage bankers or mortgage brokers for the best rate and terms when choosing a loan that is right for them and the purchase they are trying to facilitate.

 

 

A VA Home Loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs (VA). The program is for American veterans, military members currently serving in the U.S. military, reservists and select surviving spouses (provided they do not remarry) and can be used to purchase single-family homes, condominiums, multi-unit properties, manufactured homes and new construction. The VA does not originate loans, but sets the rules for who may qualify, issues minimum guidelines and requirements under which mortgages may be offered and financially guarantees loans that qualify under the program. There are service time requirements that determine the amount of eligibility and the home must be for the service member’s personal occupancy. There are numerous benefits such as 0% down, the ability to qualify for higher loan amounts than traditional Fannie Mae/ conforming loans, no down payments and much more. For more information click on the link below.

The FHA 203(K) loan program fills a need for buyers who purchase a property that needs repairs or updating by allowing both borrowers and lenders to secure a single, long term, fixed or adjustable rate loan that covers BOTH the acquisition and rehabilitation of a property.  This type of insured loan saves the borrower time and money and also protects the lender by allowing them to have the loan insured even before the condition and value of the property may offer adequate security.  FHA Section 203(k) can also be a newly originated loan or also a refinance loan.  There are specific guidelines and limits that must be met and the extent of the repairs can range from relatively minor ($5000 or more) to virtual reconstruction.  For less extensive repairs/improvements the Limited or Streamline 203(k) is also available with a loan amount of only up to $35,000.

The Federal Housing Administration, which is part of HUD (U.S. Department of Housing and Urban Development) insures these loans so the lender can offer you a better loan terms which include low down payments (as low as 3.5% of the purchase price), low closing costs and a more lenient credit qualifying process.  This loan can be utilized for singe family homes, 1-4 unit properties, mobile homes and factory-built units.  First-time homebuyers like to utilize this type of loan program generally to reduce their upfront cost of monies required to secure the loan and pay for all the necessary closing costs.

A Reverse Mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The product was conceived as a means to help retirees with limited income use the accumulated wealth in their homes to cover basic monthly living expenses and pay for healthcare however there is no restriction on how reverse mortgage proceeds can be used. The equity that you built up over years of making mortgage payments can be paid to you.  To be eligible requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, have the financial resources to pay ongoing property charges including taxes and insurance, and you must live in the home.