Financing

Types of Financing available for qualified buyers as 4/20/2012.  Note financing options change fairly regularly so you should contact your mortgage broker or bank and find out what options are available to you.

Loan Limits, Minimum Payment Amounts for Fannie, Fannie Jumbo and  FHA  Loans 2012.

Current Loan Options that allow for less than 20% Down Payments
1.    80/10/10 Financing up to the purchase price of $830,000.  Requires 700 FICO and Condo HOA must be 75% owner
          occupied. 2nd loan is a Heloc with rate of prime +2 (around 5.24% on 4/13/2012)
2.    Credit Union can provide 90% with PMI financing up to the purchase price of $975,000.  Requires 760 FICO
3.    FHA Loan with Mortgage Insurance
4.    Bank of West 80/10/10 up to approximately $1,250,000. 2nd loan is Fixed loan at approx 9.74% on 4/13/2012
5.    Census Track Loan 5% down up to $625,000.  See map to find property areas that may qualify as of 4/13/2012

Rates and Type of Residence
Principal/Primary Residence.   A property that is "owner occupied" receives a better interest rate than an investment property.   It's very straight forward:
  • The owner lives in the property for a majority of the year.
  • The property is in a location that make sense in relation to employment and contains characteristics that suits the needs of their immediate family.
  • The borrower acknowledges that hey intend to occupy the property in their loan documents. Typically the lender wants the buyer to occupy the property within 30 days of closing.
Second Home.  A second or vacation home is one that is a reasonable distance away from a principal residence.  Second home definitions vary from lender to lender.It is generally tougher to qualify for a second home as borrowers are often qualifying with mortgage payments on two properties, both their primary and the proposed second mortgage.
  • Typically lenders like to see a second home a minimum of 50 miles for distance from the borrowers home. 
  • The owner must occupy the property for some portion of the year and the property must be suitable for year round occupancy.
  • Some will insist that a second home be in a resort area. 
Investment Property.  This is a property where the borrower does not occupy it.  It can also be a "second home" or vacation home that is too close to a primary residence or that the underwriter does feel strong enough that is indeed a vacation home.  As there is a higher risk to banks with investment properties, the interest rate typically will be higher with higher the loan-to-value ratios.
  • Typically commercial, and multi-unit buildings where the owner does not live will be considered investment properties
  • Note for Refinancing purposes if a property is listing a schedule E showing $1 of rental income or expenses, then it will be considered an investment property.