USA Clients

A type of mortgage in which the underlying terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac guarantee or purchase 35-50% of all mortgages. 

The current Fannie Mae guideline for conventional home mortgage loan is at just over $417,000 for a single-family home in Central Florida and can vary in other areas.

Conventional loans are available for home purchase, refinance or Cash Out refinance.

Most Home owners have heard of FHA (Federal Housing Administration). FHA is a department within Housing and Urban Development (HUD) and is run by the Federal Government. FHA is designed to assist first time buyers, but is not limited to first time buyers.

The main benefits of FHA loans are:

Deposit/down payment: FHA minimum down payment is 3.5% of the purchase price.
The down payment doesn’t need to be the borrowers own funds. The down payment can come from a gift, grant, employer or even a 401k loan.
FHA doesn’t require a minimum credit score, but all loan investors and servicers use a minimum score of 640.
Interest rates tend to be more competitive with FHA than Conventional Financing, where rates are sensitive to high Loan to Values (LTV) and Credit Score.
FHA is generally easier to qualify for. Ie the criteria is less stringent.

A Jumbo Loan in Central Florida is a loan that is higher than the maximum loan for Conventional Lending. It exceeds the Fannie Mae’s and Freddie Mac’s loan limits and is currently set at $417,000 in Central Florida. A Jumbo loan is also known as a Non-Confirming loan.

The Loan to Value (LTV) is based upon the amount you want to borrow:

Up to $1,500,000: Maximum 80% LTV
Between $1,500,000 to $2,000,000: Maximum 75% LTV

The Obama administration announced some big changes to the governments HARP (Home Affordable Refinance Program) on October 24^th, 2011.  These changes could be of benefit to borrowers who have loans that are owned by either FNMA or FHLMC. As long as you closed your loan on or before May 31^st, 2009 and have had no mortgage late payments in the last 6 months and no more than 1late payment in the last year, you may be eligible to refinance. 

Qualifying borrowers may be able to refinance regardless of how much equity you have in your property….. or the appraised value! 

You can check the following sites to see if you have a FNMA or FHLMC loan:

http://www.FannieMae.com/loanlookup or https://www.FreddieMac.com/corporate

The USDA (United States Department of Agriculture) is a loan that is available in select locations.

Q: What is the difference between USDA and FHA financing?

A: USDA offers a loan program based on rural financing. There are median incomes used to qualify as well as number of people who live in the home.

Q: Can I get 100% financing with USDA

A: USDA loans are determined by the property location not only buyer credentials. 100% financing is available with USDA.

Q: Does anyone know if USDA finances modular homes?

A: “Under the Section 502 program, housing must be modest in size, design, and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards.

One big drawback to the program is it is in limited geographic areas. However, if you find a house in an approved location the benefits of these loans are excellent. Three significant benefits of a USDA Loan are:

USDA does not require a down payment.
If the house appraises higher than the sales price you can finance in your closing costs. This is the only loan that allows you to do this.
There is no monthly mortgage insurance (PMI).

VA offers a variety of home loan guaranty programs for Active Duty Service members, Veterans, and National Guard and Reserve members.

Purchase Loans help you purchase a home at a competitive interest rate often without requiring a down payment or private mortgage insurance. Cash Out Refinance loans allow you to take cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements.
Interest Rate Reduction Refinance Loan (IRRRL): also called the Streamline Refinance Loan can help you obtain a lower interest rate by refinancing your existing VA loan.
Native American Direct Loan (NADL) Program: helps eligible Native American Veterans finance the purchase, construction, or improvement of real property.

Florida Residential hard money loans are usually offered by private lenders like hedge funds, wealthy private individuals and small community based investment companies. The industry is not regulated like normal conventional home loans.

These loans tend to be asset based and focus on the Loan to Value of the asset pledged by the borrower. Conventional loans focus on ‘full document’ underwriting, which means that they review the borrower’s credit history, tax returns and income statements when underwriting. Hard Money loans focus more on the value of the equity in the securitized asset instead. A typical Loan to Value for a hard money loan would be 50% to 55% borrowing.

As the underwriting is less stringent for Hard Money Loans, closing can often occur much more quickly than a conventional loan, often within two to three weeks.

The trade-off is that the interest rates for Hard Money Loans tends to be a lot higher, often 6-8% above the rates available in the conventional loan marketplace. This means that the loans tend to be shorter term as borrowers will look to repay as early as possible.

Hard Money Loans are available for US Clients and International Clients alike.

Hard Money Loans are likely to benefit the following types of borrower:

• Borrowers who have previously been foreclosed or made Bankrupt, who are looking to rebuild their credit history.
• Borrowers looking for shorter term financing. Eg borrowers who need to close quickly on a foreclosure. A conventional loan may take 40 to 60 days, whereas a Hard Money Loan could take just 14 to 21 days.
• Borrowers who cannot secure finance for residential renovations, maybe prior to selling or renting a property.
• Foreign National Clients looking to buy multiple properties. Most ‘conventional’ Foreign National Lenders will only allow borrowers to buy one property, so the option to buy several through Hard Money mortgages can be attractive.
• Foreign National clients looking to buy properties through a corporate structure or LLC. None of the ‘conventional’ Foreign National Lenders will allow purchases through these structures.
• Hard Money Lenders will consider ‘investment properties’, including retail, industrial, hotels and office buildings. They may even consider land acquisitions and development projects. Conventional lenders or commercial lenders will all want full document underwriting.
• Speculators who can negotiate good discounts on purchase price as Hard Money Lenders will take the discount into account, essentially allowing up to 100% financing. Eg if a property is being purchased at a discount and is being sold for $50k, when the appraised value is $100k, a Hard Money lender will lend the full purchase price, ie $50k. A Conventional lender will never do this.

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