Mortgage Programs

by pbieda

FHA Loan Program

FHA Loans are the most popular mortgage loan program in the United States. The United States Department of Housing and Urban Development, HUD, is the parent of FHA.

Under the new HUD FHA Handbook 4000,1which is the most recent FHA Mortgage Guidelines, FHA will permit borrowers with credit scores north of 620 FICO a maximum of 46.9% DTI front end debt to income ratios, which is called the housing ratios, and the maximum debt to income ratio is 56.9% DTI on the back end debt to income ratio.

First time home buyers as well as home buyers with prior bad credit, a prior bankruptcy, a prior foreclosure, a prior deed in lieu, and a prior short sale can qualify for FHA loans. There are mandatory waiting periods after bankruptcy and foreclosure to qualify for FHA Loans.

VA Loan Program

The United States Department of Veteran Affairs, the VA, backs residential owner occupant home purchase mortgage loans through private mortgage lenders. However, not everyone qualifies for VA mortgages. Only members of the United States Armed Forces with a valid Certificate of Eligibility (COE) are eligible for VA home loans. Members of the United States Armed Services need to meet the eligibility VA mortgage lending guidelines and have been awarded a Certificate of Eligibility in order to qualify for a VA Loan.

USDA Loan Porgram

USDA Loan programs offer a home buyer the chance to purchase a home in a rural or suburban area that is designated as a rural development area by the United States Department of Agriculture. USDA Loan programs offer 100% financing to qualified USDA mortgage loan borrowers. If a home buyer can structure their home purchase with a sellers concession where the home seller will offer a sellers concession towards the home buyers closing costs, the home buyer with a USDA Loan can purchase their home with zero money out of pocket. There is no down payment on the USDA home purchase and the closing costs can be covered 100% with the sellers concession from the home seller. In the event if the home buyer is short with the sellers concession towards their closing costs, the home buyer can get a lender’s credit towards the closing costs of the home loan. A lender’s credit is when the USDA mortgage lender will give a mortgage loan borrower funds to cover part or most of their home closing costs in lieu of a higher interest rate. USDA Loans are extremely popular in many parts of the country.