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Conventional Loans

Conventional Loan Programs

About Conventional Financing

Conventional Loans are mortgage loans which are not guaranteed or insured by the federal government. Instead, these mortgage loans conform to the guidelines and national standards set forth by government sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac.

These stockholder-owned corporations were created by the government to buy and sell conventional mortgages. They set the maximum loan amounts, as well as guidelines for borrowers’ income, credit scores, and down payments. Conventional loans can be conforming or non-conforming. Conforming loans follow the terms and conditions established by Fannie Mae and Freddie Mac, while non-conforming loans (also known as jumbo loans) exceed the lending limits. Depending on market conditions and trends, about 35-50% of mortgage loans are conventional.

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Our Loan Programs

Our Loan Programs

Conventional Loans

Conventional Loans are home mortgage loans which are not guaranteed or insured by the federal government. Instead, these loans conform to the guidelines and national standards set forth by government sponsored enterprises (GSEs) such as Fannie May and Freddie Mac. These stockholder-owned corporations were created by the government to buy and sell conventional mortgages. They set the maximum loan amounts, as well as guidelines for borrowers’ income, credit scores, and down payments. Conventional loans can be conforming or non-conforming. Conforming loans follow the terms and conditions established by Fannie Mae and Freddie Mac, while non-conforming loans (also known as jumbo loans) exceed the lending limits. Depending on market conditions and trends, about 35-50% of loans are conventional.

Read More about Conventional Loans

FHA Loans

The Federal Housing Administration (FHA) is the world’s largest government insurer of mortgages, having insured over 38 million home mortgages since 1934. The government established the FHA to increase home ownership and improve existing housing conditions for Americans. The FHA does not lend money; it guarantees to pay the lender if the borrower defaults on a loan.

Read more about FHA loans

VA Loans

VA loans are designed specifically to provide home loans for eligible United States military veterans. In general, VA loans are available to almost all honorably discharged service members and active duty members. The VA loan was introduced in 1944 through the G.I. Bill of Rights, guaranteeing loans made to veterans and offering several advantages that cannot be received through conventional loans. Since then, The Department of Veterans Affairs has guaranteed more than 19 million home loans to veterans, valuing over $1 trillion. Within the past 4 years, the VA has seen a 63% increase in veterans that have used the VA loan option to purchase a home. In a tough housing market where foreclosures are high and mortgage credit can be difficult to obtain, VA loans allow for an alternative lending option for veterans.

Read more about VA Loans

Jumbo Loans

A Jumbo Loan is a mortgage loan that exceeds the amount of a conventional conforming loan limit. Fannie Mae and Freddie Mac set the standard for conventional loan limits every January based on average market prices. Jumbo loans are “non-conforming”—they do not conform to the guidelines set forth by Fannie Mae and Freddie Mac. The jumbo loan threshold varies depending on the location of the property, but generally jumbo loans are those that are above $417,000 (except in high-cost areas where the limit is $625,500). These loans are designed to help people borrow large amounts through a financial service.

Read more about Jumbo Loans

USDA Rural Housing Loans

The Rural Housing Service Programs were developed in 1994 as a result of the Department of Agriculture Reorganization Act. The programs were designed specifically to assist lower income families in obtaining adequate housing in rural areas. Rural Housing Loans allow qualified borrowers to get loans with no down payment and low closing costs. These are the only programs that require no down payment and are available nationally. Funds can be used for purchasing, renovating, repairing or constructing a home. To be eligible, the borrower must qualify for income limits and property limits.

Read more about USDA Loans

Blog

HARP 3.0 – How to Help Push the Bill Through Congress

HARP 3.0 – How to Help Push the Bill Through Congress

Like many companies in the real estate industry, we’re watching the progress of HARP 3.0.

Reintroduced to Congress in February 2013 by Senators Robert Mendez and Barbara Boxer, S. 249, The Responsible Homeowner Refinancing Act of 2013 (HARP) , will seek to help homeowners with conventional loans. Currently, only those people with Freddie and Fannie backed loans dated before May 31, 2009 can refinance their loans through HARP 2.0.

As of this writing, the Bill has been referred back to the Committee on Banking, Housing, and Urban Affairs.

If it passes, HARP 3.0 will allow people who currently owe more on their home than what it’s worth (typically 85 – 150% LTV) to refinance their conventional loans. We’re also hoping Congress will eliminate the seemingly arbitrary May 31, 2009 loan origination cutoff date.

The House has also introduced an identical Bill, H.R. 736, which is also in committee.

What can you do while waiting for Congress to move on S. 249?

1. Contact the Bill’s sponsors and voice your support – Visit Congress.gov to see the progress of S. 249 and a listing of its sponsors (with links to each Senator’s webpage and contact information).

Many bills die in committee. To help ensure S. 249 moves out of committee, contact the Bill’s sponsors and the Senators that sit on the Banking, Housing and Urban Affairs committee. Your voice does count, so be sure to call and let these Senators know you’re tracking this important bill (when you call or email, be sure to state the Bill’s name and number).

2. Consider your options – If having an underwater house is truly a hardship (meaning, you can’t afford the payments or you’ve missed payments), you do have options:

  • Obtaining a loan modification (you must meet eligibility requirements)
  • Selling your house in a short sale
  • Bankruptcy
  • Renting out your home and moving to an apartment

Before you make any significant change, however, get advice from your CPA, a real estate attorney and/or a tax attorney. Don’t listen to well-meaning friends or believe what you read on the Internet. As we’ve posted on this blog in the past, myths abound concerning real estate. Rather than make a huge financial mistake based on erroneous information, get the facts from your Loan Officers.

3. Be patient – Having a mortgage that’s more than your home is worth can be frustrating. However, home prices are rising in many parts of the country. The latest S&P Case-Shiller home price index showed average home prices increased 8.6% and 9.3% for the 10- and 20-City Composites in the 12 months ending in February 2013.

While prices may not reach their pre-2006 levels for years, the market has stabilized, which means foreclosures have decreased and more people are out buying homes versus waiting out falling prices.

Be sure to check this blog often for HARP 3.0 updates – we’ll post them as soon as we hear about them.