FHA, USDA and  VA Financing

 

Government-insured financing programs that allow for lower down payments and more relaxed qualifying guidelines than conventional loans.  FHA down payment requirements are as low as 3% and as low as 0% on VA and USDA. 

 



30 Years Fixed

This loan has a fixed rate for the entire 30 year term of loan. The payment remains constant and the borrower pays off the loan in 30 years. This is one of the most stable, lowest risk programs available.

20 Years Fixed

This loan has a fixed rate for the entire 20 year term of the loan. The payment is higher than the 30 Years Fixed, but remains constant and the borrower pays off the loan in 20 years. This is one of the most stable, lowest risk programs available.

15 Years Fixed

This loan has a fixed rate for the entire 15 year term of the loan. The payment is higher than the 30 and 20 Years Fixed, but remains constant and the borrower pays off the loan in 15 years. This is one of the most stable, lowest risk programs available.

7/1 ARM

This is a popular program among borrowers planning to keep the loan more than five but less than seven years. The interest rate is fixed for the first 84 months of the loan's 30 year term. At the end of the 84 months, the interest rate adjusts to the lower of:

 
For the LIBOR Index: For the T-Bill Index

     
  • The 1-Year LIBOR Index plus
    2.25% margin, or
  • The initial rate plus 5%

     
  • The 1-Year T-Bill Index plus
    2.75% margin, or
  • The initial rate plus 5%
Thereafter, the interest rate will adjust every 12 months to the lower of:
For the LIBOR Index: For the T-Bill Index

     
  • The 1-Year LIBOR Index plus
    2.25% margin, or
  • The previous rate plus 2%, or
  • The initial rate plus 5%

     
  • The 1-Year T-Bill Index plus
    2.75% margin, or
  • The previous rate plus 2%, or
  • The initial rate plus 5%
5/1 ARM

This is a popular program among borrowers planning to keep the loan more than three but less than five years. The interest rate is fixed for the first 60 months of the loan's 30 year term. At the end of the 60 months, the interest rate adjusts to the lower of:
For the LIBOR Index: For the T-Bill Index

     
  • The 1-Year LIBOR Index plus
    2.25% margin, or
  • The initial rate plus 5% - Conf.
    The initial rate plus 5% - Jumbo

     
  • The 1-Year T-Bill Index plus
    2.75% margin, or
  • The initial rate plus 5% - Conf.
    The initial rate plus 5% - Jumbo
Thereafter, the interest rate will adjust every 12 months to the lower of:
For the LIBOR Index: For the T-Bill Index

     
  • The 1-Year LIBOR Index plus
    2.25% margin, or
  • The previous rate plus 2%, or
  • The initial rate plus 5% - Conf.
    The initial rate plus 5% - Jumbo

     
  • The 1-Year T-Bill Index plus
    2.75% margin, or
  • The previous rate plus 2%, or
  • The initial rate plus 6% - Conf.
    The initial rate plus 5% - Jumbo
3/1 ARM

This is a popular program among borrowers planning to keep the loan less than three years. The interest rate is fixed for the first 36 months of the loan's 30 year term. At the end of the 36 months, the interest rate adjusts to the lower of:
For the LIBOR Index: For the T-Bill Index

     
  • The 1-Year LIBOR Index plus
    2.25% margin, or
  • The initial rate plus 2%

     
  • The 1-Year T-Bill Index plus
    2.75% margin, or
  • The initial rate plus 2%
Thereafter, the interest rate will adjust every 12 months to the lower of:
For the LIBOR Index: For the T-Bill Index

     
  • The 1-Year LIBOR Index plus
    2.25% margin, or
  • The previous rate plus 2%, or
  • The initial rate plus 6%

     
  • The 1-Year T-Bill Index plus
    2.75% margin, or
  • The previous rate plus 2%, or
  • The initial rate plus 6%
Option ARM

An adjustable rate mortgage loan with the option of four different monthly payment amounts: minimum payment, interest only, full principal and interest (30-year term) and full principal and interest (15-year term). These loans typically have a low initial fixed interest rate for a specified period of time. Beyond the fixed interest period, rates are subject to monthly adjustment based on the specified index. Payment option amounts after the initial fixed interest period are subject to change annually. Deferred interest, or negative amortization, is possible with these loans.
Home Equity Line of Credit (HELOC)

A credit line that is secured by a second deed of trust on a house. Equity lines of credit are revolving accounts that work like a credit card, which can be paid down or charged up for the term of the loan. The minimum payment due each month is interest only.
Closed-End / Fixed Rate Seconds

This product is designed for borrowers with high credit quality who wish to take out a closed-end (stand-alone) fixed rate lien that will be subordinate to the first mortgage on their home.
Fixed Rate Interest Only

Under this program, the borrower pays interest only for the first 10 or 15 years. The loan is then fully amortized over the remaining term of the 30 year loan. The borrower may make voluntary principal payments during the interest only period. The required interest only payment will be reduced to reflect the decrease in the principal unpaid balance.
Subprime Loan

If a borrower has a less than perfect credit history, then the borrower may need a "Subprime" loan. These loans may have higher interest rates, but it will get approved when no one else can.