NEED SOME FLEXIBILITY?

FHA Loans: With low down payment requirements, ultra-lenient credit score standards and flexible income guidelines, the FHA mortgage makes homeownership available to a wide range of individuals, especially first-time home buyers.  

THE DETAILS

• Requires a down payment of 3.5% 
• Accepts credit scores as low as 580
• Home must be owner-occupied for 12 months
• Gifts can be used to cover 100% of the down payment and closing costs
• Upfront MIP equal to 1.75% of the loan amount
• PMI is permanent, unless refinanced 
• Limits apply to loan amount and home type based on county

Fannie Mae’s HomeReady™ Mortgage: This loan allows a down payment of just 3% and permits “income pooling” for all members of a household, including parents, grandparents, relatives and working children.

THE DETAILS

• Requires a credit score of at least 620
• Borrowers who intend to occupy the property may only have a total of one other financed property (in addition to the subject property) at the time of closing
• If all occupying borrowers are first-time home buyers, then at least one borrower must agree to complete an online homeowner education program
• PMI is generally cancelable upon borrower's request when the loan balance drops below 80% LTV, or automatically when it drops below 78% LTV
• Income limit for all loans is 80% of the area median income for the property’s location, including properties in low-income census tracts
• Higher rates than an FHA loan

WANT A FIXER-UPPER?

203k Construction/Rehab Loans: This is an FHA loan used to finance “fixer-uppers” and repairs at the same time. The total loan amount can include the financed purchase price and remodel costs. There are two options for the 203k Loan - Standard or Limited. 

THE DETAILS

• Only requires 3.5% down
• Upfront MIP equal to 1.75% of the loan 
• PMI is permanent, unless refinanced
• The home must be owner occupied for 12 months
• For Limited 203k, there is a cap of $35,000 for cosmetic work and no structural or footprint changes are allowed. Standard 203k has no repair limit, so long as repair cost plus purchase price falls within the county's FHA lending limits.
• Project must not take longer than 6 months to complete
• Limited 203k is meant for basic and cosmetic repairs. Standard 203k allows for more extensive repairs such as structural repairs, room additions, and pools.
• No DIY projects, must use approved FHA contractor  
• For Standard 203k, there is a longer timeline to close and more paperwork. Paperwork requirements are less intense for Limited 203k.
• Lower credit requirement  
• Limits apply to loan amount and home type based on county (see FHA limits above)
• Limited 203k requires that the home be habitable throughout the period of renovation. Standard 203k allows borrowers to add up to six months of mortgage payments to their loan for the period during which the home is uninhabitable.  

Fannie Mae’s HomeStyle® Mortgage: This loan allows you to buy and rehab a loan with only 5% down, but without the 1.75% upfront mortgage insurance premium required by FHA.

THE DETAILS

• Reduced PMI with good credit
• PMI is cancelable once equity reaches 22%
• No restrictions on the type of home improvements
• Can be used for primary residence, rental property or vacation home
• Renovation costs may be approved up to the lesser of 75% of the purchase price plus renovation costs OR the as-completed appraised value