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Neighborhood Mortgage Group offers a wide variety of Mortgage Products. Most loan programs contain different features that can be confusing for even experienced homeowners.
Federal Housing Administration (FHA)
The Federal Housing Administration is a division of the U.S. Department of Housing and Urban Development, commonly referred to as HUD. FHA loans were created to provide affordable mortgages to the average homebuyer. The federal government insures FHA loans, or guarantees participating lending institutions against loss from default on qualifying loans.
Programs and Features:
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Fixed Rate Loans, Temporary Buy-Downs and ARMS
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Available for detached 1 to 4 unit dwellings, eligible condos and PUD's
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Properties must meet HUD guidelines and be inspected by HUD-approved appraisers
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Subject to loan limits set by HUD (see HUD web site for loan limits)
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Up front Mortgage Insurance fee (can be financed) and monthly mortgage insurance fee required
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Non-occupant co-borrowers allowed
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Down payment and closing costs may be gifted
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Seller may contribute a maximum of 6% of the lower of the sales price or the appraised value
Conforming Loans
Conforming Loans are those that meet Fannie Mae and or Freddie Mac underwriting requirements. In other words, income, credit, and property requirements must meet nationally standardized guidelines. Conforming loans are subject to loan amount limits that are set by Fannie Mae (FNMA) and Freddie Mac (FHLMC). These limits vary based on the region in which the subject property is located as well as the number of legal units contained in the subject property.
Veterans Administration (VA)
Veterans Administration loans were created to help veterans finance the purchase of their homes with favorable loan terms. For the purpose of the VA program, “veteran” includes active duty service personnel and certain categories of spouses. Like FHA loans, the federal government insures VA loans, or guarantees VA approved lending institutions against loss from default on qualifying loans.
Programs and Features:
- Fixed Rate Loans and Temporary Buy-downs
- Available for detached 1-unit dwellings, eligible condos and PUD's
- Properties must meet VA guidelines and be inspected by VA-approved appraisers
- Subject to loan limit set by VA
- One time mortgage insurance fee is typically charged, which may be financed.
- No prepayment penalty
- No reserve requirements at closing
- No down payment required
- Out-of-pocket expenses may be gifted, typically from relatives
- Only eligible veterans and their spouses occupying the subject property may be co-borrowers or co-signers
- Seller may contribute a maximum of 6% of the lower of the sales price or the appraised value
Rural Development Loans
Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Applicants for loans may have an income of up to 115% of the median income for the area. Area income limits for this program vary by state. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories. There is no required down payment. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt.
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