- FHA 203(k) Streamlined
- 203K Renovation Loan
- VA and CalVET
- Conventional /Jumbo
- CalHFA (California Housing Finance Agency)
- CalSTRS (California State Teachers’ Retirement System)
- USDA Rural Loans
- Reverse Mortgage
- PowerSaver Home Loans
FHA (Federal Housing Administration)
FHA home loans are a great option for many homebuyers and homeowners looking to purchase or refinance! While the FHA home loan programs were originally designed for first-time homebuyers, that is not the case today. FHA home loans are available to everyone and are a great option to consider.
FHA Purchase Loans –
If you are looking to purchase a home, there are many reasons why FHA loans have become so popular today:
- Down payments as low as 3.5%
- A borrower’s relative or close family friend can contribute up to the full 3.5% down payment with documented gift funds
- Seller can contribute up to 6% of the sales price towards your closing costs
- Minimum credit score of only 580.
- Low 30-year fixed rate
FHA 203(k) Streamline & 203K Renovation Loan
FHA’s Streamlined 203(k) program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. FHA 203(k) can help you:
- Increase sales with your buyers and sellers
- Expand your pool of buyers
- Help deliver the dream of homeownership
What Does it Cover?
Covers improvements up to $35,000. Minimum improvement necessary is $5,000. Covered improvements include:
- Roofs, gutters, downspouts
- Heating and air conditioning
- Upgrade/repair plumbing, septic, well, and electrical systems
- Replacement of flooring, windows, doors, siding
- Weatherization, painting, basement waterproofing
- Minor remodels that don’t involve structural repairs
- Purchase and installation of appliances
- Handicapped accessibility improvements
*Anything above $15,000 in total repair cost does require a HUD inspector. This cost is roughly $500, which can be factored into the loan itself.
What Items Remain Ineligible For the Streamlined (k) Program?
Properties that require the following work items are not eligible for financing under the Streamlined (k):
- Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall
- New construction (including room additions)
- Repair of structural damage
- Repairs requiring detailed drawings or architectural exhibits
- Landscaping or similar site amenity improvements
- Any repair or improvement requiring a work schedule longer than 6 months
- Rehabilitation activities that require more than 2 payments per specialized contractor
Borrowers may not use the Streamlined (k) program to finance any required repairs arising from the appraisal that do not appear on the list of Streamlined (k) Eligible Work Items or that would:
- Necessitate a “consultant” to develop a “Specification of Repairs/Work Write-Up”
- Require plans or architectural exhibits
- Require a plan reviewer
- Require more than 6 months to complete
- Result in work not starting within 30 days after loan closing
- Cause the mortgagor to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted. (FHA anticipates that, in a typical case, the mortgagor would be able to occupy the property after mortgage loan closing.)
FHA 203K Renovation loan
Allows buyers to purchase (or refinance) and renovate a property with one loan and one closing. With one loan, there is only one application, one set of fees, one closing and one monthly payment.
Improvements can include anything that adds value to the home:
Borrowers may use FHA 203k for a room addition, new carpeting, landscaping, plumbing, windows, Solar, roofing or a new kitchen. The loan can also be used for energy-efficiency improvements.
A 203K loan can create huge value for home shoppers looking to:
- Buy a home in a neighborhood that they could not ordinarily afford by purchasing a fixer-upper.
- Include all upgrades and repairs in one loan.
- Purchase a home with only 3.5 percent down payment on the total sales price plus the cost of repairs.
- Streamline the process because closing occurs first, and then repairs are done after closing. You receive your commission and the seller receives their payoff sooner.
- Replace anything from carpet, paint and appliances, to fixtures, windows and more, and include it in the financing.
- Upgrade by adding additions and putting in landscaping.
- Fix damaged homes – new roof, fire damage, termite removal and mold remediation.
- Maximize a property’s potential. The loan is based on the after-improved value – what the house will be worth once the renovations are complete.
- Customize the home to the buyer’s taste.
- Purchase and rehab a foreclosure.?
- Homebuyer locates property and signs a sales contract (purchase subject to home inspection)
- Homebuyer schedules an inspection with a 203(k) cost consultant, home inspector or appraiser to budget the home improvements
- Once budget is approved by borrower, cost consultant completes the work write-up and prepares contractor bid packages to obtain cost estimates
- Appraiser uses work write-up to determine “as-is” and “improved value”
- Loan closes with an FHA-approved 203(k) lender
- Construction begins within 30 days of loan closing.
- Must be completed in 6 months or less?
VA Purchase Loans
The VA loan program can make it much easier for veterans to secure a home loan by requiring little or no down payment. This home loan is available to veterans and guaranteed by the U.S. Veteran’s Administration, and it frequently offers lower interest rates than ordinarily available. In addition, with a VA-guaranteed loan, there is no private mortgage insurance requirement.
Here are some important benefits:
- 100% financing available
- The seller can contribute the full amount of the borrower’s closing cost, plus up to an additional 4% of the sales price
- The veteran can be stationed overseas and his or her spouse can still purchase a home locally
- In-service veterans can use quarters/housing allowance income to qualify and make the mortgage payments
- There are no prepayment penalties
Eligible veterans who have available home loan entitlement may use a VA Guaranteed Home Loan to purchase a single family residence, condominium, townhouse, co-op, or build a new home. The loan can also be used for energy efficient repairs, alterations, renovations and improvements. VA loans can only be used on a primary residence.
VA Refinance Loans
Rate Reduction Refinance – A VA guaranteed loan made to refinance an existing VA guaranteed loan to a lower interest rate. There is minimal credit qualifying, including a 620 credit score or better and no late mortgage payments in the last twelve months. An appraisal is not required, which is especially helpful for homeowners who owe more than their home is worth. You may also add up to $6000 of energy efficient improvements into the loan. All closing costs can be financed into the loan, eliminating all out of pocket costs. A certificate of eligibility is not required.
Special note: No loan other than the existing VA loan may be paid from the proceeds of a rate reduction refinance. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage.
Cash-out Refinance (Often referred to as a “regular” refinance) – A VA guaranteed loan that refinances any type of existing loan, not just a VA loan. Veterans can receive cash out up to 90% of the appraised value of their home. VA regular refinances are for primary residences only.
CalVET Home Loan:
- 100% financing available
- No prepayment penalties
- Low interest rate
- Qualified first-time homebuyers receive an even lower rate
The CalVET home loan program has expanded eligibility, so that most honorably discharged veterans are now eligible. There are no restrictions based on your state of residency when you entered the service, but your home purchase or refinance must be made in the state of California.
To learn more about VA and CalVET loans and their advantages for you, contact your mortgage loan originator or contact us today.
Conventional and Jumbo
Conventional financing falls into two categories of loan products that are called conforming and non-conforming. Conforming loans are underwritten to meet the terms and conditions established by the two primary government sponsored enterprises (GSE’s) known as ‘Fannie Mae’ and ‘Freddie Mac’. Fannie Mae is the common name for the Federal National Mortgage Association or FNMA. Freddie Mac is the common name for the Federal Home Loan Mortgage Corporation or FHLMC. These are two of the largest money providers for home loans on what is called the secondary market, where pricing for various interest rates is determined by market conditions. Currently $417,000 is the maximum conforming agency loan limit.
Programs exceeding the current agency limit of $417,000 are considered non-conforming or jumbo financing. We are delegated to underwrite both jumbo and conforming loans. We offer a variety of conventional loan products that include both fixed rate and adjustable rate mortgages (ARM’s) with a wide range of repayment periods. We also offer hybrid products that are a combination both fixed and adjustable rates and payments for different terms.
- CalHFA Conventional Loans
- 30-Year Fixed Mortgage. This conventional mortgage loan offer up to 95% financing with a 30-year term and a low, fixed interest rate
- Government Insured/Guaranteed Loans
- 30-Year Fixed Government Insured/Guaranteed Mortgage. This program is for mortgage loans that are insured or guaranteed by FHA, VA or USDA and features a 30-year term with a low, fixed interest rate
- Real Estate Owned (REO) Loan Programs
- CalHFA Community Stabilization Home Loan Program. This program helps first-time home buyers purchase vacant home that are owned by participating financial institutions in certain area of California.?
If you are an employee of a California public school district or community college and/or a member of the California State Teachers’ Retirement System you may be eligible for a CalSTRS home loan. You can obtain a great loan and have your money work for you.
- Fixed mortgage loan amounts available up to $834,000*.
- Competitive Interest Rates
- Controlled Closing Costs
- 80/17 Program – Put only 3% down with an 80% first mortgage, and a deferred 17% second mortgage that has no payments due for 5 years. Max combined loan amounts up to $650,000.
- Purchases and Refinances
- One FREE Interest Rate Float Down* (Guarantees you the best rate at time of closing)
*Some restrictions may apply and programs may change without notice, talk with your mortgage loan originator or contact us today for more information.
USDA Rural Loan
If you live in or near a rural area, there is an excellent government program that can help you obtain a home loan.
The United States Department of Agriculture (USDA) Guaranteed Rural Housing (GRH) loan program offers a conventional 100% loan; meaning zero down payment! In addition, there is no requirement for mortgage insurance or cash reserves.
However, there are certain specific requirements for this loan, both for the borrower and for the location of the property. The borrower must not have the means for the down payment on a regular conventional loan, and the borrower must plan to occupy the property. You do not need to be a first-time homebuyer. Your income cannot be above 115% of the U.S. median income, adjusted by family size.
While there is no monthly mortgage insurance (insurance collected to protect the lender), there is a one-time, upfront ‘guarantee’ fee that can also be financed into the loan, thus bringing the loan amount to 103.5% of the home cost. Below are some of the benefits of a USDA Guaranteed Rural Housing loan program:
- 100% financing with no down payment or mortgage insurance! The guaranteed rural housing loan program provides compelling affordable housing options for borrowers
- 8 acres or less
- Property can’t have a pool
- Household calculation
- All sources
- Coding system on website
- Flexible Underwriting!
- Properties must be located in eligible rural areas (generally towns with a population of 20,000 or less that are removed from an urban area)
- Income limits are 115% of the U.S. Median Income (for most counties, the 4 person household income limit is $65,000 maximum)
- No monthly mortgage insurance premium payment is required
- No cash reserves are required
- Borrowers are not required to be first time homebuyers
- No Loan limit restrictions
- Minimum credit score of 600?
- Receive money from your home equity while eliminating monthly mortgage payments forever. The reverse mortgage is an increasingly popular U.S. government-backed financial tool that allows seniors 62 and older to unlock the equity in their home they have built up over the years. The reverse mortgage has the power to change a senior’s life virtually overnight. A reverse mortgage eliminates your mortgage payments and can provide additional cash flow to pay off bills, cover healthcare expenses or simply to travel and enjoy retirement.
- NFC believes it is important that you are completely informed and fully understand all of our loan programs including the reverse mortgage program before you can decide if it is right for you. NFC’s Reverse Mortgage Specialists are here to answer all of your questions and talk with you about your options.
Please call us today toll-free at (916) 732.2340 to learn more. If you prefer, you can e-mail us.
We are a proud member of the National Reverse Mortgage Lenders Association (NRMLA) and we adhere to their code of ethics.
PowerSaver Home Loans
Neighbor’s Financial was one of eighteen national, regional and local lenders selected to participate in a new two-year pilot program that will offer qualified borrowers living in certain parts of the country low-cost loans to make energy-saving improvements to their homes. Backed by the Federal Housing Administration (FHA), these new PowerSaver loans will offer homeowners up to $25,000 to make energy-efficient improvements of their choice, including the installation of insulation, duct sealing, replacement doors and windows, HVAC systems, water heaters, solar panels, and geothermal systems.
U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan and U.S. Department of Energy Secretary Steven Chu announced the participating lenders (see attached list) during a tour of a family-run company that offers home energy audits and upgrades in Long Island, New York.
“We believe the market is right for a low-cost financing option for families who want energy-saving technologies in their home,” said Secretary Donovan. “PowerSaver hits on all cylinders by helping credit-worthy homeowners finance these upgrades, cut their energy bills and boost the local job market in the process. While FHA and these lenders are jumpstarting this pilot, we hope its success will lead to a growing private sector interest in making these types of loans.”
Secretary Chu said, “Today, we are breaking down barriers and making energy efficiency more accessible and more affordable. It’s the right thing to do for our environment, for our economy and for the pocketbooks of American families.”
The remodeling industry cites surveys that point to a growing demand among homeowners interested in making their homes energy efficient. Yet options are still limited for financing home energy improvements, especially for the many homeowners who are unable to take out a home equity loan or access an affordable consumer loan. Initially, the PowerSaver pilot program is estimated to assist approximately 30,000 homeowners to finance energy-efficient upgrades though higher market demand may increase this impact. According to HUD projections, more than 3,000 jobs will be created through this pilot program and the impact may be larger if market demand for the loan program increases over time.
Participating lenders are largely selected based on their commitment to work in partnership with established home energy retrofit programs provided by states, cities, utilities and home performance contractors. These markets include, but are not limited to areas of the country participating in the Energy Department’s Better Building Program.
PowerSaver loans will be backed by the FHA but require these lenders to have significant “skin in the game.” FHA mortgage insurance will cover up to 90 percent of the loan amount in the event of default. Lenders will retain the remaining risk on each loan, incentivizing responsible underwriting and lending standards.
PowerSaverhas been carefully designed to meet a need in the marketplace for borrowers who have the ability and motivation to take on modest additional debt to realize the savings over time from home energy improvements. PowerSaver loans are only available to borrowers with good credit, manageable debt and at least some equity in their home (maximum 100% combined loan-to-value).
HUD developed PowerSaver as part of the Recovery Through Retrofit initiative launched in May 2009 by Vice President Biden’s Middle Class Task Force to develop federal actions that would expand green job opportunities in the United States and boost energy savings by improving home energy efficiency. The announcement is part of an interagency effort including 11 departments and agencies and six White House offices.
Borrowers can submit reservation to NFC at: PowerSaverHomeLoans.com