Financial Products
FHA loans
An FHA loan is a mortgage insured by the Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban Development (HUD). The limits for FHA Loans are determined by area codes. FHA loans are designed to help make homeownership more affordable by:
1. Protecting lenders from losses if a borrower defaults on their mortgage
2. Offering less strict qualifying terms than conventional mortgages
3. Increasing the availability of affordable housing
USDA Loans
A USDA (United States Department of Agriculture) is a government-backed mortgage that helps low- to moderate-income households buy, build, repair, or renovate a primary residence in a USDA designated rural area. USDA Loans have Income and loan limits that vary by location. USDA loans have No down payment, Competitive interest rates, and lenient credit score requirements.
VA Loans
A VA loan is a mortgage that's partially guaranteed by the Department of Veterans Affairs (VA) and issued by private lenders. VA loans are available to help veterans, service members, and their families buy, build, improve, or refinance homes.
A conventional loan is a mortgage that's not part of a government program, like the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), or Department of Agriculture (USDA). Conventional loans can be conforming or non- conforming:
1. Conforming loans: Conforming loans have limits and guidelines set by the Federal Housing Finance Agency (FHFA). Conforming loans are backed by government agencies, (Fannie Mae and Freddie Mac) which provide an additional layer of security for lenders.
2. Non-conforming loans: These loans are less standardized, and can be larger than conforming loans. The guidelines for these loans are not limited by the FHFA and therefore may offer more flexibility to the borrower. Non-conforming loans do not have government backing or guarantees
Jumbo Loans (High Balance Loans)
A jumbo loan is a mortgage that exceeds the conforming loan limit set by the Federal Housing Finance Agency (FHFA) Jumbo loans are considered non-conforming loans because they exceed their local CLLs (Conforming Loan Limits). They have higher closing costs than conventional mortgages and require higher credit scores.
Alt A
Alt-A is a classification of mortgages with a risk profile falling between prime and subprime. They can be considered high risk due to provision factors customized by the lender. This type of loan tends to be more expensive for the borrower, as they may carry higher interest rates and/or fees.
Portfolio loans
Portfolio loans are a type of mortgage that a lender retains in its investment portfolio rather than selling on the secondary market. Unlike traditional loans that are sold to entities like Fannie Mae or Freddie Mac, portfolio loans remain on the lender’s books, giving them more control over the loan terms and guidelines. This unique structure allows for greater flexibility in lending criteria, which can benefit borrowers who don’t meet the standard requirements for conventional loans.
Bank Statement Loans
A bank statement loan is a type of mortgage that allows borrowers to qualify for a home loan using their bank statements instead of tax returns or pay stubs. This type of loan can be beneficial for people who are self-employed, have irregular incomes, or have significant deductions on their tax returns.
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