6.REF/defeasnace/ reconveyance/right of redemption/multi-state note/ FHA/203(B)/Home ownership voucher assistance/good neighbor next door/disaster relief/HECM/energy efficiency/MIP/COE/COV/Seller concession/VA cashout refinance/IRRR/NADL/SAH/SHA
The VA loan program offers a basic entitlement amount of ______.
$36,000 The basic entitlement is $36,000, which would allow a veteran to purchase a home priced at $144,000.
SAH and SHA Grants
Available to veterans with total and permanent service-related disabilities; used to adapt housing to accommodate the disability.
Lender Judgment When Qualifying
Both the residual income and the debt-to-income ratio are used as a guide to assessing credit risk, but lenders are not expected to automatically approve or reject a loan on the basis of either calculation. • Excellent credit history • Minimal debt • Long-term employment • Significant liquid assets • Large down payment • New loan represents little or no increase in housing expense • High residual income • Low debt-to-income ratio • Tax credits for child care • Tax benefits of home ownership
Buydowns
Buydowns are allowed only on VA fixed-rate (not adjustable) loans, and the fee for the buydown may be paid by seller, buyer, or family members. Qualification for the borrower is based on the first year's payment rate.
The Federal Housing Administration Loan Insurance
Buyers don't work with the FHA directly to participate in the loan insurance program. The FHA pays lenders' claims with funds collected from the mortgage insurance premium (MIP) that each FHA loan borrower pays monthly. In most cases, MIP must be paid for the life of the loan. The FHA is a federal agency has been a part of the U.S. Department of Housing and Urban Development (HUD). FHA's mission is to increase employment opportunities in the construction industry and stabilize the mortgage market by establishing standards for lending and construction, and by insuring mortgages. Approved lenders are most commonly part of the FHA's direct endorsement program.
The ______ tells the lender how much entitlement the veteran has available under the VA loan program. COE
Certificate of eligibility
Fatima is using a VA loan to purchase a home from Sue. Sue agrees to pay Fatima's closing costs. Which of the following statements is true?
Closing costs aren't considered a seller concession. If the seller pays the buyer's closing costs, other than prepaid items or the funding fee, it isn't counted as seller concessions.
Closing Costs
Closing costs can't be added into the sales price, and are limited to specific costs, which must be paid in cash at closing. The only allowable closing costs that may be charged to the veteran are: Up to a 1% loan origination fee Discount points, if applicable VA funding fee (see below) "Reasonable and customary" charges for the appraisal, borrower's credit report, recording fees and/or taxes, taxes and/or assessments chargeable to borrower, initial deposit for tax and insurance escrow account, hazard insurance, including flood insurance, survey (if required), title examination, and title insurance The veteran borrower isn't allowed to pay for the termite report, unless the loan is a refinance. That fee is usually paid by the seller. Also, no commissions, brokerage fees, or "buyer broker" fees may be charged to the veteran buyer.
In a deed of trust, who is the beneficiary?
Lender
Use of Property for a VA Loan
Property purchased with a VA loan must be for owner occupancy.The loan can be used to: Buy a home or a condominium unit in a VA-approved project Build a home Simultaneously purchase and improve a home Improve a home (e.g., installing energy-related features) Buy a manufactured home and/or lot The basic VA entitlement is $36,000. This would be sufficient for a mortgage of up to $144,000. If the mortgage is only $120,000, the VA still only guarantees one quarter of that ($30,000) VA guarantees one quarter of the total loan amount, a secondary entitlement kicks in if the home value is higher than $144,000, raising the government's repayment pledge to a maximum of $104,250. veterans throughout most of the country can borrow up to $417,000—that's $104,250 x 4—without a down payment. A higher entitlement will be available in more expensive parts of the country
In which of these situations would a 203(k) loan be applicable?
Purchase of a home requiring repairs
The Federal Housing Administration has a mission which includes ______ through the establishment of lending standards and by insuring mortgages.
Stabilizing the mortgage market
When a veteran assumes a VA loan, the ______ agreement can restore the original buyer's level of entitlement as if the loan were repaid in full.
Substitution of entitlement
The seller must pay this fee.
Termite inspection/report fee
true
The amount of entitlement you're eligible for is shown on your COE. You'll need a COE to find out if you are eligible for a VA loan.
The VA provides guarantee to the lender.
VA Home Loan
John uses the VA home loan to purchase property. His mortgage is $200,000. Then, two years later, John defaults on his loan. How much will the VA reimburse the lender?
$50,000 The VA guarantees one quarter of the loan amount, so the lender in this case will be reimbursed up to $50,000.
What's the minimum qualifying credit score for an FHA mortgage loan?
500
disaster Relief
A 90-day moratorium on foreclosures for homeowners with an FHA loan who are trying to repair or rebuild after a natural disaster.
With a VA loan, the borrower must receive a certificate of eligibility. What must the property receive?
A certificate of reasonable value
Homeownership Voucher Assistance
Allows participants to use Housing Choice Voucher funds, --which are normally used to pay rent, to help pay monthly homeownership expenses. Applicants must be first-time homeowners, have at least one employed family member, and meet minimum income requirements.
Alienation clause
Also known as the due-on-sale clause, this allows the lender to make the entire loan due and payable immediately if the property is sold or otherwise transferred. The presence of this clause can affect the ability of a buyer to assume the loan.
The Certificate of Reasonable Value
As you know, when financing a real property purchase, lenders will require borrowers to obtain an appraisal of the property. With a VA loan, this appraisal must be in the form of a certificate of reasonable value, and must be performed by a VA-assigned certified real estate appraiser. --A CRV has a shelf life of only six months for resale properties, and 12 months for new construction. So what happens if the appraiser returns a CRV that's less than the sales price? A borrower who still wants to move forward with the purchase has these options: -Pay the difference in cash -Get the seller to reduce the sales price to match the CRV -When the borrower makes up the difference in cash, the VA has the right to approve the source of these funds to ensure that they're not a loan, which would alter the borrower's debt ratio and put the borrower at a higher risk for default.
FHA 203(K) Loan
FHA offers Section 203(k) insurance to lenders, -- finance both the purchase and the rehabilitation cost Existing homeowners who refinance can also use the program. When Kevin closed on his loan, the amount above what is used to pay off the seller is the amount dedicated for the repairs. The contractor receives 50% of these funds up front. The rest are placed in an escrow account.
home Equity Conversion Mortgage (HECM
Gerald qualified for the HECM program by virtue of being age 62 or older and having paid off his mortgage (or having a very small amount left to pay). The amount that a homeowner receives from a reverse mortgage is based on property value, the borrower's age, and current interest rates, with a total loan limit that is set annually by the FHA.
Acceleration clause
If the borrower fails to make a payment or to abide by the terms of the agreement (for example, by not paying property taxes), this is the clause that describes this as a default, and which creates a consequence of making the entire debt immediately due and payable
Second Mortgages on a VA Loan
It's approved by the VA legal department The first and second mortgage liens don't exceed the CRV The interest rate on the second mortgage is equal to or less than the interest rate on the first There are no toxic loan features (short-term paybacks, prepayment penalties, balloon payments)
Which of the following clauses is included in Fannie Mae's multi-state note?
Late charge The note contains a description of when a late charge is payable.
Good Neighbor Next Door
Law enforcement, teachers, firefighters, and EMTs get a 50% discount on certain foreclosed FHA-insured properties
FHA county loan limits are based on ______.
Median price for the area and property type
The property must be located on federal trust land. The veteran applies directly to the VA for the loan.
NADL Program
Special mortgage loan programs for ______ include the FHA248 and HUD 184 programs.
Native Americans living on tribal land
Lenders who ______ can underwrite and approve FHA loans without requiring the FHA to review each borrower's qualifications.
Participate in the direct endorsement program
true
Paul's lender calculated residual income and compared it to a regional chart to determine qualification for the VA loan.
false
Paul's lender compared his debt-to-income ratio against a regional chart to determine qualification for the VA loan. This is false. A qualifying debt-to-income ratio is 41%.
Benefits of the VA Home Loan
She won't be required to place a down payment, provided the sales price doesn't exceed the appraised value. Interest rates are competitive with those available through conventional financing. She won't have to pay private mortgage insurance, even though her loan-to-value ratio would be far over the 80/20 rule most conventional lenders set. Her closing costs will be low, thanks to VA restrictions on borrower-paid closing costs, and she may be allowed to have some of her closing costs paid by the seller. She can pay off the loan early with no penalty. If she runs into trouble making her payments, the VA might be able to assist her, and will certainly help her avoid foreclosure through counseling or other types of intervention.
Funding Fee
The VA funding fee charged to buyers using the VA loan keeps the program funded. The COE will also be used to determine whether the veteran pays the funding fee, and how much it is. The funding fee may be reduced if the veteran provides a down payment, and it will be waived completely if the veteran has 10% or higher VA disability.
buydowns with a VA loan
They're allowed only on fixed rate loans. A borrower may buy down the interest rate on a fixed rate VA loan, but buydowns are not allowed on ARMs.
IRRR
This program allows a VA loan to be refinanced in order to obtain a lower interest rate.
False--Borrowers apply to the FHA for a mortgage loan.
True --Borrowers apply to the lender, not directly to the FHA. The FHA covers the lender against loss if the borrower defaults. The FHA collects a mortgage insurance premium on each loan. Most FHA-approved lenders participate in the direct endorsement program.
Some other situations call for somewhat smaller funding fees:
Veterans who are assuming a VA loan are charged a 0.5% funding fee. Funding fees for a rate reduction refinancing are 0.5%. If the veteran is purchasing a manufactured home, the funding fee is 1%.
203(k) Program Details
Work must be completed within six months. Cost estimates for repair work must be provided to the lender. Work must be approved by a 203(k) inspector. Work must meet FHA standards. The combined cost of home value and repair work can exceed FHA mortgage limits.
Sissy is a veteran who used her full entitlement to purchase a home. The loan has since been paid off, and Sissy still owns the home. Now, she'd like to buy a second home using another VA loan. Is Sissy allowed to do this?
Yes, Sissy can apply to have her entitlement restored and can buy a second house using a VA loan.
How the FHA Helps the Mortgage Market: Five Ways
1. The FHA set basic standards by which to qualify borrowers, helping to reduce lender risk. These standards have been adopted by all FHA-approved lenders. 2. The FHA also requires specific construction standards for properties purchased with FHAinsured loans, making buildings safer and longer-lasting, thereby reducing lending and insurance risk. 3. The FHA introduced the long-term amortized loan. Loans provided prior to the establishment of the FHA required as much as 50% down and had to be paid in full within five years. As you can imagine, homeownership rates were dismal back then, with less than 20% owning homes. The long-term amortized loan is in many ways responsible for today's homeownership rate of nearly 65%. 4. The FHA has also influenced the appraisal industry. Since September 1999, the FHA has required that all appraisers evaluating property for FHA-insured loans be state-licensed or certified. 5. The stability the FHA brought to the mortgage industry opened up the global market for mortgage-backed securities. MBS
If Paul has a good negotiator on his side,
Alex could pay for all of Paul's closing costs, but these would not be considered seller concessions. Alex may pay Paul's VA funding fee. Alex may include the washer and dryer in the sale as a seller concession. if Alex pays for Paul's prepaid property taxes and insurance, this is considered a seller concession. The total amount of seller concessions may not exceed 4% of the sales price.
Two Types of MIP--mortgage insurance premium
An upfront MIP is paid at closing, An annual MIP is paid over the life of the loan. Both forms are required on all FHA loans. --The upfront premium is a percentage of the loan amount stipulated by the FHA. This can be paid in cash at closing by the borrower or it can be financed with the loan. If the up-front premium is financed, it becomes part of the principal of the loan, increasing the principal balance. --The annual MIP is also a percentage, but it's based on the amount of the loan, the loan-to-value ratio, and the loan duration. It's recalculated each year because those amounts will change as the mortgage is paid off. The annual MIP is divided by 12, and that amount is added to the borrower's mortgage payment each month.
Because of the funding fee required for a VA loan, a borrower with no down payment funds saved should ______.
Roll the funding fee into the loan
seller Concessions
Seller concessions are allowed with a VA loan, but they may not exceed 4% of the sales price. Seller concessions are considered anything that a seller wouldn't typically pay in a transaction. If a seller elects to pay any of the buyer's closing costs (not including prepaid items) or discount points for a permanent buydown of the interest rate for the buyer, those amounts are not included as part of the 4% seller concession limit. However, points paid on behalf of the buyer must be within reason in relation to the current market. if the market dictates an interest rate of 7.5% with two discount points, the seller's payment of the two points would not be a seller concession. But if the seller paid five points, three of these points would be considered a seller concession. Allowed seller concessions include, but are not limited to, the following: Payment of the buyer's VA funding fee Payment of the buyer's prepaid property taxes and insurance Gifts, such as a television set or microwave oven Provision of escrowed funds to provide temporary interest rate buydowns Payoff of credit balances or judgments on behalf of the buyer
Regina has defaulted on the terms of her mortgage, and now her lender has foreclosed. The property was sold at a sheriff's sale three months ago. Regina suddenly learns that she has inherited a great deal of money. She wants her property back. Under a judicial foreclosure, what right might allow her to buy her property from the winner of the foreclosure auction?
Statutory right of redemption
FHA Streamline Refinance Program
The FHA Streamline Refinance program allows borrowers who already have an FHA loan to refinance. under FHA 203(b) loan The program allows a refinance without verifying the borrower's income or assets, and in some cases, without even requiring an appraisal. ---The streamline program is the simplest and easiest way to refinance an FHA loan. One of the biggest advantages to this program is that it allows for an unlimited loan-to-value ratio. --In other words, the borrower doesn't need to have any equity in the property. Therefore, even homeowners who are severely underwater may still be able to take advantage of lower mortgage rates by refinancing with an FHA streamline. To qualify for a streamline refinance: The mortgage must already be FHA-insured The refinance must result in a reduction of mortgage payments The homeowners must be current on their mortgage payments (not delinquent) No money may be taken out
Funding Fee
VA does charge a funding fee, which covers expenses in case of borrower default. The funding fee may be paid in cash or included in the loan amount, even in excess of the CRV, as long as it doesn't bring the total over the maximum allowable loan. All veterans pay the funding fee except for those receiving compensation for service-connected disabilities, those receiving retirement pay in lieu of disability compensation, and spouses of veterans who died in service or died from service-connected disabilities. The funding fee may also be waived in cases where the veteran makes a large down payment.
true
When foreclosure is non-judicial, there is no statutory right of redemption.
FHA 203(b) loan
1. Hadnʼt saved much for a down payment ---FHA 203(b) requires only 3.5% down 2.Bad credit history ---Lender is allowed to consider factors that compensate for bad credit 3.High debt-to-income ratio --Lender is insured against loss, so not such a big risk
Debt-to-Income
The VA's debt-to-income ratio calculates total monthly debt payments (housing expense, installment debts [such as utilities], and other debt) against gross monthly income. Borrowers should come below a 41% ratio to qualify for a VA loan
The FHA Energy Efficient Mortgage allows modifications such as solar panels as long as ______.
The cost of the modification is within limits based on the value of the home
VA Home Loan
The property may be located anywhere in the U.S. The veteran applies for the loan through a VA-approved lender.
statutory right of redemption
The right of a borrower to redeem the property by paying amounts owed plus costs, even after the foreclosure sale It's a right that's only available with judicial foreclosure, which is standard when a mortgage instrument is used.
certificate of eligibility (COE)
a document provided by the U.S. Department of Veterans Affairs stating whether an individual is eligible for the VA loan, and the dollar amount of eligibility available. The individual's length of service or service commitment, duty status, and character of service determine eligibility for specific home loan benefits. Only honorably discharged veterans are eligible (with some exceptions). However, provided they otherwise qualify, active duty, Reserves, National Guard, surviving spouses, and even some other government employees can use the VA loan. Service members who don't meet the minimum service requirements may still be eligible if a discharge occurred due to hardship, the government's convenience, a reduction-in-force, certain medical conditions, or a service-connected disability.
FHA energy efficient mortgage (EEM) program
The EEM isn't a separate FHA loan program, but one that can be used in conjunction with other FHA loan programs to finance the cost of adding energy-efficient features to new or existing houses. The EEM may be used with a Section 203(b) or 203(k) loan. It can also be used with the Section 203(h) program for victims of presidential-declared disasters. Ed and Gretta are combining it with a basic FHA loan, the Section 203(b) program An energy consultant must evaluate the improvements that will be needed to make the home energy efficient. Ed's contractor is allowed 90 days to complete the improvements, and the work must be verified to ensure that it meets the FHA's standards.
Energy Efficient Mortgage
Allows the borrower to incorporate the cost of adding energy-efficient features in combination with an FHA-insured mortgage
The energy efficient mortgage program insured by the FHA requires an energy consultant to provide the lender with a report listing recommended modifications for energy efficiency, an estimate of the cost for each recommendation, and ______.
An estimate of the energy savings that would result
mortgagee in a mortgage
The lender
true
The property appraisal must be done by a VA-assigned appraiser. The seller may pay for the buyer's buydown of interest rate on a fixed rate loan. The property appraisal must be done by a VA-assigned appraiser. The buyer may not finance closing costs.
Cash-Out Refinancing
This program can be used to refinance a non-VA loan into a VA loan.
With a VA loan, the certificate of reasonable value is used to ______. COV
Determine the value of the loan that the VA will guarantee VA loans require a CRV, or certificate of reasonable value, provided by a VA-assigned real estate appraiser.
why FHA Refinance?
It allows a borrower with an FHA loan to refinance without requiring a new appraisal, and the loan-to-value ratio is unlimited.
Deeds of trust
use a reconveyance clause. The trustee is required to execute a deed of reconveyance to give full title to the trustor.
The VA Loan: Special Programs
1. Cash-Out Refinancing The VA's Cash-Out Refinance Loan is for homeowners who want to tap into their home equity for debt consolidation purposes, tuition, or home improvements. It can also be used to refinance a non-VA loan into a VA loan. Lenders can make loans up to 100% of the value of the home. Because the loan amount can exceed the current balance on the original VA loan, the borrower must go through the qualifying process again, including submission of a COE, income verification, and an appraisal with a new certificate of reasonable value. 2. Interest Rate Reduction Refinance (IRRR) --This loan program is similar to the FHA streamline program. It allows refinancing of a VA loan in order to obtain a lower interest rate. The amount of the loan cannot be more than the outstanding balance of the loan to be refinanced, other than the amount of any closing costs that are refinanced. A 0.5% funding fee applies, but there are no requirements to submit a COE, no new appraisal, and no income or employment verification. 3. Native American Direct Loan Program (NADL) --Established in 1992, The Native American Direct Loan provides direct home loans from the VA to eligible Native American veterans to finance the purchase, construction, or improvement of homes on federal trust land, or to refinance a prior NADL to reduce the interest rate. The NADL program is a great option for Native --American veterans living on tribal land, which is land owned by the federal government and held in trust for certain tribes. Of course, the regular VA home loan program is available to Native American veterans, as it is to other veterans. The NADL program, however, assists Native American veterans who are unable to find a lender willing to make a regular VA home loan due to a property's location on tribal land and the unique issues this creates. The NADL program is different from the traditional VA home loan because the VA is actually making the loan. In the traditional home loan program, lenders make the loans, and the VA provides the guarantee. But here, VA is actually lending the money to Native American veterans living on tribal land. 4. Specially Adapted Housing --The VA provides two types of housing grants to active armed service members and veterans who have permanent and total service-connected disabilities. The grants must be used to modify the veteran's home to accommodate the disability. The Specially Adapted Housing (SAH) grant can be used to: --Build a specially adapted home on land to be acquired. --Build a home on already owned land, if it's suitable for specially adapted housing. --Remodel an existing home to accommodate a disability. --Pay the unpaid principal mortgage balance of an adapted home already acquired without the assistance of a VA grant. --The maximum dollar amount allowable for SAH grants in fiscal year 2016 is $73,768.The Special Housing Adaptation (SHA) grant, which is smaller, may be used to: --Adapt an existing home in which the veteran resides that is owned by either the veteran or a family member. --Adapt a home the veteran or family member intends to purchase in which the veteran will live. --Help a veteran purchase a home already adapted in which the veteran will live. ---The maximum dollar amount allowable for SHA grant in fiscal year 2016 is $14,754.
Underwriting Guidelines For FHA Loans
1. must place 3.5% as a down payment—this amount is calculated on the lesser of the sales price or appraised value. --The FHA does scrutinize the source of down payment funds, and doesn't allow the seller to contribute to the buyer's down payment. 2. Loan Limits The FHA limits the loan amount it will insure based on the type of structure (e.g., single-family vs. multi-family) and median home prices in the area. Mortgage limits are reviewed annually and can change every year. --Loans that exceed the FHA limit are considered jumbo, non-conforming loans, and they're not eligible for sale to Fannie Mae or Freddie Mac. 3.Seller-Paid Closing Costs This may increase the costs that the seller will be required to cover in order to make the sale. The FHA allows the seller to contribute up to 6% of the sales price (or of the appraised value, if that's less) toward the buyer's closing costs, prepaid expenses, discount points, and other financing costs. Costs that can be included in this 6% limit are: --Permanent and temporary interest rate buydowns --Payments of mortgage interest for fixed-rate mortgages --Mortgage payment protection insurance (which covers mortgage payments for a set period if the borrower is out of work due to accident, sickness, or unemployment) --Payment of the upfront mortgage insurance premium (UFMIP) Second Mortgages --The total of the first and second mortgage must be within the maximum LTV ratio. --The borrower must qualify to make both payments. --Toxic loan features, such as balloon payments maturing within five years, highly variable mortgage payments, and prepayment penalties, are not allowed. Assumptions --FHA loans don't use a "due on sale" clause, so it's possible for borrowers to assume an existing FHA loan. If the loan were originated before December 1986, it can be assumed without the new borrower having to qualify. --For loans originated after December 1986, the borrower must pass a creditworthiness review before being allowed to assume the loan. Investors may not assume FHA loans; the property must be owner occupied for the life of the loan.
Down Payment Amount
Down Payment Amount First Loan Second or Subsequent Loan First-Time Loan; Veteran is Reservist or National Guard Second or Subsequent Loan; Veteran is Reservist or National Guard None 2.15% 3.30% 2.40% 3.30% 5% - 10% 1.50% 1.50% 1.75% 1.75% 10% or more 1.25% 1.25% 1.50% 1.25% Cash-out refinance 2.15% 3.30% 2.40% 3.30%
HECM BENEFITS
FHA covers any negative balance after the sale of the home The FHA collects an insurance premium from the loan. Michelle and Ray must maintain homeowners insurance, or risk defaulting on their reverse mortgage. No monthly payments No asset or income qualification or limits The option of receiving a percentage of the value of the home equity in a lump sum, on a monthly basis, or as a revolving line of credit No repayment of principal, interest, or fees until the surviving homeowner leaves Continued payments as long as a surviving spouse remains in the home No debt to the estate if the eventual sale does not repay the balance owed to the lender. The FHA will cover the remaining amount owed to the lender. The ability to obtain an HECM loan in a single transaction (for seniors for whom the home is a primary residence) Counseling (to help homeowners understand that the equity payments could result in zero equity) A prohibition to lenders from requiring the borrower to buy insurance to protect the lender from a negative balance at the end of the loan program. Homeowners are still required to carry hazard and other homeowner insurance, and must make these payments or risk defaulting on the loan. A limit of origination fees to 2% of the maximum claim amount up to $200,000, and 1% of the maximum claim amount over $200,000. Lower-valued homes (less than $125,000) are limited to a $2,500 fee.
The ______ clause in a deed of trust allows the lender to foreclose non-judicially.
Power of sale
Annual MIP can be removed from an FHA loan by ______.
Refinancing to a conventional loan
FHA SECTION 251 ADJUSTABLE RATE MORTGAGE INSURANCE
The Section 251 program is based on the same requirements for property and borrower as the 203(b) program, which, as youʼll recall, is the basic FHA mortgage insurance program for one- to four-family homes. The difference is that the Section 251 program insures loans with adjustable rate mortgages (ARMs). The lender must inform them of any adjustment to monthly payment at least 25 days in advance. Interest rate adjustments are based on market indices approved by FHA. Their loan will begin with a fixed-rate term. The initial fixed-rate term may be three, five, seven, or 10 years. Their interest rate won't change more than a specific number of percentage points set by the FHA. --After the fixed payment period is over, the FHA uses a maximum level for interest rate changes.
credit score
The VA loan program requires borrowers to show sufficient credit and income, but it does not have minimum credit score or asset requirements.' this minimum score is 620 with a VA loan, Qualifying for a VA loan after bankruptcy or foreclosure is also possible, even if the foreclosure was on a previous VA loan. Typically, someone who has gone through a bankruptcy or foreclosure has to wait for two years before using a VA loan. This is a significant difference from the waiting requirement for a conventional loan, which is seven years.
Residual income
The amount of money left after housing expenses, debts, obligations, and monthly shelter expenses are met
NADL Program
This is a direct home loan program from the VA to eligible Native American veterans.
FHA Loan Programs
Title I, Property Improvements --This is loan insurance for moderate rehabilitation of properties. Loans on single-family homes may be used for alterations, repairs, and site improvements (includes construction of nonresidential buildings, such as garages). Loans on multi-family properties may only be used for alterations or repairs. Loan amounts and terms vary by type of property. Title I, --Purchase of Manufactured Housing This is loan insurance for the purchase of manufactured homes. The loan may be used to purchase a manufactured house on a developed lot, to develop a lot for a manufactured home, or a combination of the two. Loan limits vary by year, and may vary by location for high-value areas. Example limits are $69,678 for the home, $23,226 for the lot, and $92,904 for both. Current limits may be found on HUD's website. Note: If the loan required is higher than these limits, some Title II funds may be available. Title II --title II covers loan insurance for many properties and situations. Each program has its own rules. Some of the options available from FHA are: Section 203(b): Purchase of one- to four-family homes Section 203(h): Victims of disasters may receive 100% financing to reconstruct or replace a damaged home if they file within one year of the disaster Section 203(n): Purchase of a unit in a cooperative housing project Section 221(d) (3) and (4): Construction of multi-family rental or cooperative projects Title II, --continued Section 223(e): Purchase or rehabilitation of a home in an older, declining urban area. Section 234(c): Purchase of a single condo unit Section 251: Loan insurance for adjustable rate mortgages Section 255: Loan insurance for reverse mortgages for borrowers age 62 or older
Assumptions
VA loans are fully assumable, and the new buyer doesn't need to be a veteran. This can make assuming a VA loan attractive when interest rates climb. For VA loans originated since March 1988, an assumption requires lender approval of the buyer's credit, which may (but doesn't always) let the seller off the hook if the buyer defaults. However, if a veteran allows an unauthorized assumption of a property covered by a VA-guaranteed loan and it's discovered by the lender, this can trigger a requirement that the entire loan balance be paid in full. For a veteran to be fully off the hook in an assumption, the original borrower of the VA loan must obtain a release of liability from the new buyer. This is meant to ensure that the new buyer takes full responsibility for defaulting on a loan. If the new buyer is also a veteran, it is possible to apply for a substitution of entitlement. This is where the new buyer's entitlement is substituted for the original buyer's entitlement used on the loan, restoring the original buyer's entitlement in the same way as if the loan had been repaid in full. The substitution of entitlement is a novation, which means putting a new contract in place of an old one. It makes a new loan between the lender and the new borrower, and removes the original borrower from the equation completely.
Restored and Partial Entitlement
Veterans who have used a VA home loan benefit and paid the loan off completely can borrow again under the program, with the same level of entitlement. This is called "restoration of entitlement. veterans may be able to get another VA-guaranteed loan, even while still owing on the prior loan, if their entire entitlement amount weren't used in the first loan. This is called "partial entitlement." they would need to qualify for both loans, and a down payment may be required for the second loan. Restoration of entitlement is allowed: The property's been sold and is no longer owned by the veteran, and the loan is paid in full. A qualified veteran buyer assumes the outstanding balance on the loan and agrees to substitute his or her entitlement for the same amount of entitlement the original buyer used to get the loan. The new buyer must qualify for the VA loan with the lender. The borrower has repaid the prior VA home loan in full, but hasn't disposed of the property securing that loan, the entitlement used in connection with that loan may be restored.
The VA Loan Funding Fee
based on a percentage of the sales price. The VA is guaranteeing the loan, so if the buyer defaults, this fee helps to keep the program running for future generations of military homebuyers. The funding fee is required on most VA loans, with the following exceptions: -Veterans receiving compensation for service-connected disabilities -Veterans receiving retirement pay in lieu of disability compensation -Spouses of veterans who died in service or died from service-connected disabilities -Transactions in which a large down payment is made The funding fee must be paid at closing time, but borrowers have the option to either finance it or pay it in cash. If it's paid in cash, the buyer can ask the seller to pay it. Borrowers who finance the fee may do so, even if this results in a total loan amount that exceeds the certificate of reasonable value. the financing the fee may not tip the loan amount about the overall loan limit. So, how much is this funding fee? Well ... it depends on the down payment amount, whether the veteran's obtained a VA loan in the past, military status, and whether it involves a purchase or cashout refinance.
Benefits of FHA Loan
slightly lower interest rates and more flexible credit qualifications. FHA qualifies borrowers using two types of income ratios, and that they must qualify under both ratios to be eligible. total housing expenses can't be more than 31% of their total gross monthly income: 1. Mortgage (principal, interest, property taxes, home insurance premiums, mortgage insurance premiums) 2. Homeowner or condo association fees, if applicable The second qualifying ratio is total debt obligations debt must not exceed 43% of their gross monthly income.
Mortgages
use the defeasance clause. The lender is required to execute a satisfaction of mortgage.
Reservist
后备兵 Helicopter pilot in the National Guard, no disability, first VA loan purchase, no down payment
