Conventional Loan

1. a mortgage loan other than one guaranteed by the Veterans Administration or insured by the federal housing administration . See VA LOAN, FHA LOAN .

Example: Abel applies for a conventional loan from his savings and loan association . If Abel wants to borrow more than 80% of the value of the mortgaged property, he must buy private mortgage insurance.

2. a fixed-rate, fixed-term mortgage loan.

Example: alternative mortgage instruments, by commonly used definition, are not conventional loans.

Example: A conventional mortgage loan requires a fixed principal and interest payment over its term.

FHA Loan

An FHA insured loan is a Federal Housing Administration mortgage insurance backed mortgage loan which is provided by a FHA-approved lender. FHA insured loans are a type of federal assistance and have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. To obtain mortgage insurance from the Federal Housing Administration, an upfront mortgage insurance premium (UFMIP) equal to 1.75 percent of the base loan amount at closing is required, and is normally financed into the total loan amount by the lender and paid to FHA on the borrower's behalf. There is also a monthly mortgage insurance premium (MIP) which varies based on the amortization term and loan-to-value ratio.

The program originated during the Great Depression of the 1930s, when the rates of foreclosures and defaults rose sharply, and the program was intended to provide lenders with sufficient insurance. Some FHA programs were subsidized by the government, but the goal was to make it self-supporting, based on insurance premiums paid by borrowers. Over time, private mortgage insurance (PMI) companies came into play, and now FHA primarily serves people who cannot afford a conventional down payment or otherwise do not qualify for PMI. The program has since this time been modified to accommodate the heightened recession.

VA Loan

A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs (VA). The loan may be issued by qualified lenders.

The VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry). The basic intention of the VA direct home loan program is to supply home financing to eligible veterans in areas where private financing is not generally available and to help veterans purchase properties with no down payment. Eligible areas are designated by the VA as housing credit shortage areas and are generally rural areas and small cities and towns not near metropolitan or commuting areas of large cities. The VA loan allows veterans 103.15 percent financing without private mortgage insurance or a 20 per cent second mortgage and up to $6,000 for energy efficient improvements. A VA funding fee of 0 to 3.15% of the loan amount is paid to the VA; this fee may also be financed. In a purchase, veterans may borrow up to 103.15% of the sales price or reasonable value of the home, whichever is less. Since there is no monthly PMI, more of the mortgage payment goes directly towards qualifying for the loan amount, allowing for larger loans with the same payment. In a refinance, where a new VA loan is created, veterans may borrow up to 90% of reasonable value, where allowed by state laws. In a refinance where the loan is a VA loan refinancing to VA loan (IRRRL Refinance), the veteran may borrow up to 100.5% of the total loan amount. The additional .5% is the funding fee for an VA Interest Rate Reduction Refinance.

VA loans allow veterans to qualify for loan amounts larger than traditional Fannie Mae / conforming loans. VA will insure a mortgage where the monthly payment of the loan is up to 41% of the gross monthly income vs. 28% for a conforming loan assuming the veteran has no monthly bills. The maximum VA loan guarantee varies by county. As of 1 January 2012, the maximum VA loan amount with no down payment is usually $625,500, although this amount may rise to as much as $1,094,625 in certain specified "high-cost counties".[1] VA also allows the seller to pay all of the veteran's closing costs as long as the costs do not exceed 6% of the sales price of the home.

USDA Rural Development Loan

Purpose: The Very Low-Income Housing Repair program provides loans and grants to very low-income homeowners to repair, improve, or modernize their dwellings or to remove health and safety hazards.

Eligibility: To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan. For Income and Property Eligibility please see our Eligibility Site.

Terms: Loans of up to $20,000 and grants of up to $7,500 are available. Loans are for up to 20 years at 1 percent interest. A real estate mortgage and full title services are required for loans of $7,500 or more. Grants may be recaptured if the property is sold in less than 3 years. Grant funds may be used only to pay for repairs and improvements resulting in the removal of health and safety hazards. A grant/loan combination is made if the applicant can repay part of the cost. Loans and grants can be combined for up to $27,500 in assistance.

Standards: Repaired properties do not need to meet other HCFP code requirements, but the installation of water and waste systems and related fixtures must meet local health department requirements. Water supply and sewage disposal systems should normally meet HCFP requirements. Not all the health and safety hazards in a home must be removed with Section 504 funds, provided that major health and safety hazards are removed. All work must meet local codes and standards.

Basic Instruction: 7 CFR Part 3550 and HB-1-3550

Commercial Lending

Our firm specializes in various types of Commercial Lending from Gas Stations to Churches we cover a large range of Commercial Products. This specific type of financing is based on a business rather than an individual's consumer credit profile. Most of these loan types are short term loans with an interest rate based on the Labor Rate or Wall Street Journal Prime Rate and are secured by collateral owned by the business entity.

FHA 203(k) Rehab Loan

An FHA 203 Loan is a Rehabilitation loan is a type of FHA government insured loan that allows for renovations/ repairs to be financed into the loan (this can be done with a purchase or refinance), ranging from $5,000 all the way up to $50,000. This specific loan type allows for Substantial non-structural upgrades to a home that can include new bathrooms, kitchens, countertops, roofing, siding, carpentry, plumbing and the list goes on. This is a very useful loan for when an individual runs across a “Fixer Upper” property. ***NOTE*** this loan type requires licensed third party professionals in all areas undergoing renovation; work cannot be done by the Home Owner even if they are a licensed contractor/ professional.

Jumbo Loan

A jumbo mortgage is a mortgage loan that may have high credit quality, but is in an amount above conventional conforming loan limits of $417,000. This standard is set by the two government-sponsored enterprises, Fannie Mae and Freddie Mac, and sets the limit on the maximum value of any individual mortgage they will purchase from a lender. Fannie Mae (FNMA) and Freddie Mac (FHLMC) are large agencies that purchase the bulk of U.S. residential mortgages from banks and other lenders, allowing them to free up liquidity to lend more mortgages. When FNMA and FHLMC limits don't cover the full loan amount, the loan is referred to as a "jumbo mortgage". The average interest rates on jumbo mortgages are typically higher than for conforming mortgages, although not based primarily on credit risk.

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