Conventional loans which are insured by both Fannie Mae and Freddie Mac are made at the risk of the lender without benefit of any government guarantee or government insurance such as FHA, VA and USDA Rural Development loans. A conventional loan with an LTV (loan to value ratio) of greater than 80% requires private mortgage insurance which can be paid monthly or with one larger single premium. The borrower must typically have between 5% and 10% for the down payment which must come from his/her own funds (20% to avoid private mortgage insurance or a second mortgage) and typically have 2 months of reserves on deposit. Closing costs can be paid by the seller as long as they do not exceed 3% of the contract sales price.

Requirements of a conventional loan applicant usually include excellent credit, job stability with sufficient income, a sizable down payment, and low debt to income ratios. Borrowers who meet Fannie Mae or Freddie Mac guidelines are rewarded with an interest rate only slightly lower than an FHA interest rate but do avoid PMI or Funding Fees depending on the size of their down payment.  For additional details, contact an Express Mortgage loan officer today. 

FHA is the most widely used loan program and has been very popular since it's inception in 1934 with over 40 million loans insured.  FHA insured loans are designed to help people qualify for a single family home loan up to $271,050 with a minimal down payment of 3.5%, less than perfect credit, and competitive low rates comparable to those offered with conventional mortgages.  Lenders are willing to underwrite these loans with more relaxed guidelines due to FHA insuring the lender against any borrower defaults.  FHA loans are great for first-time homebuyers as well as people re-establishing credit after bankruptcy or other difficulties.  On a 30 year FHA mortgage, there is a minimal up-front funding fee  of 2.25% and monthly mortgage insurance of .55% of your mortgage amount which is charged by HUD to insure your loan.  For more detailed information, please contact an Express Mortgage Loan Officer today.

Rural Development Guaranteed Loan

One of the most widely used programs to date, the Section 502 Guaranteed loans are primarily used to help low to moderate income individuals or households purchase homes in rural areas.  Funds can be used purchase a new or existing home and can also be utilized to refinance an existing Rural Development mortgage.

Applicants for loans may have an income of up to 115% of the median income for the area. Area income limits for this program vary by state.   Families must be without adequate housing (cannot own other homes), but be able to afford the mortgage payments, including taxes and insurance.  In addition, applicants must have reasonable credit histories showing the ability and willingness to meet their monthly debt obligations.  There is no required down payment. To insure the lender against default, USDA does charge a one time up-front funding fee as low as 2% which can be added to loan.  The lender must also determine repayment feasibility by comparing the proposed housing expense to gross monthly income of the applicant(s).  Call an Express Mortgage loan officer today for more details about this great program.

Veterans Administration (VA)

Veterans Administration loans were created to help veterans finance the purchase of their homes with favorable loan terms such as 100% financing.  Like FHA loans, the federal government insures VA loans, or guarantees VA approved lending institutions against loss from default on qualifying loans.  The VA loan program allows for no down-payment as well as no monthly mortgage insurance which results in lower payments.  Another great feature allows the seller to pay up to 6% of the sales price toward closing costs and inspections which further reduces any expense on the veteran.  Call Express Mortgage today with any additional questions. 

The Section 184 Indian Home Loan Program is a mortgage product specifically for American Indian families.  With HUD Section 184 financing, you can get into a home with a low down payment, no mortgage insurance and flexible underwriting.  For loan over $50,000 down payment is 2.25% and for loan below $50,000 your down payment is 1.25%.  Instead of paying monthly mortgage insurance, a 1% loan guarantee fee can be added to your final loan amount.  For more information, visit the HUD website at : www.hud.gov/codetalk or call an Express Mortgage Loan Officer today.

Jumbo loans or non-conforming loans are loans that do not meet requirement set forth by either Fannie Mae's or Freddie Mac's loan limits.  Fannie Mae and Freddie Mac's loan limits for Oklahoma are currently set at $417,000 to be eligible for insurance by one of these institutions.  Call Express Mortgage today for additional information regarding our Jumbo loan programs.