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The Many Types of Loan Programs

There are a seemingly endless array of home loan programs available today. Here is a handy list of some of the more popular products:

 

Conventional Conforming Loans

  • Conventional Conforming Loans have maximum loan amounts that are set by the government.
  • Other rules and guidelines are set by Fannie Mae and Freddie Mac.
  • Typically, if your down payment is less than 20%, you will need mortgage insurance.
 

Non-Conforming Loans

  • Non-Conforming Loans are any loans that don’t adhere to Fannie Mae or Freddie Mac requirements. FHA, VA, USDA, and Non-QM loans are all examples of non-conforming loans.

 

FHA (Federal Housing Administration) Loans

  • FHA Loans are backed by the government and open to all qualified homebuyers.
  • FHA loans require mortgage insurance.
  • FHA loans have limits that change annually. To determine the FHA loan limit, click the link and input the county and state.
  • FHA Loans allow for down payments as low as 3.5% and they also allow credit scores that are lower than most conventional loans.

 

VA (Veterans Affairs) Loans

  • VA Loans are available to eligible veterans, current service members, and surviving spouses.
  • The VA does not lend the money directly. These loans are made by private lenders and guaranteed by the VA.
  • VA Loans do not require monthly mortgage insurance premiums, but generally require an upfront VA funding fee at closing.
  • Jumbo loans are available.
  • They are available with low or no down payments.
 

USDA (US Department of Agriculture) Loans

  • USDA Loans require zero down payment on homes in qualified USDA rural areas.
  • Borrowers must meet USDA income eligibility requirements – among other lending criteria – in order to be eligible. 
  • Borrowers will pay an upfront fee at closing as well as ongoing mortgage insurance premiums to the USDA.

 

Jumbo Loans

  • Jumbo Loans – Like their name implies, are loans that exceed the conventional loan limits which vary by geographical area.
  • Jumbo loans are offered by lenders and banks. They are not a government program. Therefore, Jumbo loan guidelines can vary quite a bit from lender to lender.
  • Jumbo loans typically require good credit scores and more money down. However, there are exceptions. For instance, some allow as little as 10% down in certain circumstances. 

 

Non-QM (Non-Qualified Mortgage) Loans

  • Non-QM loans do not conform to the Qualified Mortgage provisions set by the Dodd-Frank Act.
  • There are many types of non-QM programs available. For instance, 
    • Borrowers can use financial assets as income.
    • Self-employed borrowers can use bank deposits for proof of income.
    • Investors can qualify based on the property’s cash flow. The borrower’s income and debt is not considered.
    • Plus, more than we can list.

 

There are lots of loan products available in Florida, so we encourage you to reach out to us! Our knowledgeable and friendly loan originators will help you select the best program that works for you (and not just the bank).

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Every attempt has been made to ensure that the above information is valid at the time of publication. Subject to credit approval. NMLS #318098.

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