Loan Programs

Conventional loans are a popular financing option for homebuyers and homeowners and can be used for a home purchase or refinance. Depending on the loan program and borrower qualifications, conventional financing may offer a variety of down payment and term options. Private mortgage insurance may be required when the down payment is less than 20%. Eligibility, loan limits and other requirements vary based on the borrower, property and loan program.

FHA loans are government-insured mortgages that can provide flexible financing options for eligible homebuyers. FHA financing may allow a down payment as low as 3.5% for qualifying borrowers and can offer more flexible credit guidelines than some conventional loan programs. FHA loans may be used by first-time and repeat homebuyers and are available for eligible primary residences that meet FHA requirements. Mortgage insurance is required, and loan limits and qualification requirements apply.

VA loans are government-backed mortgages available to eligible Veterans, active-duty service members, certain National Guard and Reserve members, and some surviving spouses. VA financing may allow eligible borrowers to purchase a primary residence with no down payment, subject to VA and lender requirements and the property's appraised value. VA loans do not require monthly private mortgage insurance, and the VA does not establish a universal minimum credit score, although individual lenders may have their own requirements. A VA funding fee may apply unless the borrower qualifies for an exemption.

USDA loans are government-backed mortgages designed to help eligible borrowers purchase homes in qualifying rural areas. The USDA Single Family Housing Guaranteed Loan Program may provide up to 100% financing with no down payment for qualified borrowers. Household income and property-location requirements apply, and the home must generally be used as the borrower's primary residence. USDA loans are not limited to first-time homebuyers and can provide an affordable financing option for eligible buyers in qualifying communities.

Jumbo loans are mortgages used when the loan amount exceeds the conforming loan limits established for conventional loans purchased by Fannie Mae and Freddie Mac. They can be used to finance higher-priced homes and may offer a variety of fixed- and adjustable-rate options depending on the lender and loan program. Because jumbo loans are not subject to standard conforming loan limits, qualification requirements may differ from conventional financing and can include additional requirements for credit, income, assets and reserves.

A reverse mortgage can allow eligible homeowners age 62 or older to access a portion of their home equity without making monthly mortgage payments. The most common type is the FHA-insured Home Equity Conversion Mortgage (HECM). The homeowner retains ownership of the home and remains responsible for property taxes, homeowners insurance, maintenance and other applicable property charges. The loan generally becomes due and payable when the borrower sells the home, permanently moves out or dies, subject to program requirements. Eligibility, available proceeds and payment options depend on the borrower's circumstances and the property.

DSCR (Debt Service Coverage Ratio) loans are designed for real estate investors and generally qualify the loan based primarily on the rental property's cash flow rather than the borrower's personal income. This can make DSCR financing useful for investors purchasing or refinancing eligible rental properties. Qualification requirements, including the property's debt service coverage ratio, down payment or equity, credit, reserves and property eligibility, vary by lender and loan program.

Construction-to-Permanent loans provide financing to build a new home while combining the construction financing and permanent mortgage into a single loan. Funds are generally disbursed in stages as construction progresses, and borrowers typically make payments based on the funds that have been advanced during the construction period. Once construction is complete, the loan transitions to permanent financing without requiring a separate mortgage closing. Program requirements, down payment, builder approval and other qualifications apply.

Non-QM (Non-Qualified Mortgage) loans provide alternative financing options for borrowers whose financial circumstances may not fit traditional conventional loan guidelines. Depending on the program, qualification may use alternative documentation such as personal or business bank statements, asset-based income or rental property cash flow rather than traditional income documentation. Non-QM programs can be useful for self-employed borrowers, real estate investors and others with complex financial situations. Credit, down payment, reserves and other qualification requirements vary by program.

Refinancing replaces an existing mortgage with a new loan and may be considered for a variety of financial goals. Depending on the homeowner's circumstances, refinancing may be used to change the loan term or structure, obtain different financing terms, or access available home equity through a cash-out refinance. Available options may include rate-and-term refinancing and cash-out refinancing. Whether refinancing makes sense depends on factors such as current loan terms, available interest rates, closing costs, home equity and the homeowner's individual financial goals.

In some cases a refinance loan might result in higher finance charges over the life of the loan.