Conventional Loans
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5% Down Payment
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No Income limits
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Great for borrowers with a 700 or higher credit score
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Fixed rate or Adjustable rate
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No mortgage insurance with 20% Equity or Down Payment
Conventional loans are generally stricter and can be more difficult to qualify for than an FHA loan. They also require a larger down payment. The rate is typically higher than an FHA loan, but with great credit the mortgage insurance can be much lower.
This loan is best for borrowers with a good credit score and no derogatory items showing on their credit report.
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Primary residence – 5% down payment required
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Second homes – 10% down payment required, interest rate is similar to purchase rates
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Investment property – 15% down payment required on single family units; better rates with 25% down
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Rate and term refinance up to 95% of the home’s value
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Cash out refinance up to 80% of the home’s value
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Possible to get 4 years after a bankruptcy or 7 years after a foreclosure or shortsale
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Will allow for a gift for the down payment and closing costs
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Allows for a co-signer
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Multi unit properties allowed up to 4 units
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Conventional 3% (HomeReady) Loans
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3% Down Payment
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Does have income limits (80% of Area Median Income)
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Typically lower interest rates than regular conventional loans
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Reduced mortgage insurance requirement with less than 10% down
HomeReady loans are a great option for those buyers that are under the income limits, with a limited down payment and good credit. The debt-to-income ratios are more strict and they can be a little more difficult to qualify for than an FHA loan.
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Must be owner occupied
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Can be used for a multi unit property as long as it is a primary residence
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Rate and term refinance up to 97% of the home’s value
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Possible to get 4 years after a bankruptcy or 7 years after a foreclosure or shortsale
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May allow a gift for the down payment and closing costs
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Homeownership education is typically required
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FHA Loans
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3.5% Down Payment
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No Income limits
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Great for borrowers with less than perfect credit
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Fixed rate or Adjustable rate
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Possible to get 2 years after a bankruptcy or 3 years after a foreclosure or shortsale
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Almost anyone can get an FHA (Federal Housing Administration) loan; they are no longer only for first time homebuyers. FHA loans are only used for a primary residence. This is the most lenient loan program. It allows for higher debt to income ratios and less than perfect credit. FHA also requires less of a down payment and the interest rate is typically lower than a conventional loan.
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This loan is generally a better option for borrowers with less than 700 credit scores, a derogatory such as a bankruptcy or foreclosure, less money to put down and/or their debt to income ratios are higher than 49%.
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Upfront mortgage insurance premium of 1.75% required on all loans
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If less than a 10% down payment, mortgage insurance will stay on for the life of the loan
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With a down payment of 10% or more, mortgage insurance will be on the loan for the first 11 years
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Will allow for a gift for the down payment and closing costs
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Allows for a co-signer
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Can be used for a multi unit property if it is a primary residence
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Condos must be FHA approved
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USDA Loans (also known as a Rural Housing loan)
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0% Down Payment – NO Down Payment Required!
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Must be in an eligible rural area
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There are income limits for the entire household
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Cannot own another home
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USDA is one of the strictest programs available. In addition to area limits and income limits, they also have one of the tightest allowed debt to income ratios and is more difficult for borrowers with credit issues. While this program is not for everyone, when all of the criteria are met, it is one of the best loan programs available. It has some of the best rates with low mortgage insurance and no down payment required.
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Upfront mortgage guarantee fee of 1% required on all loans
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Mortgage insurance is required, but is less than half of FHAs required monthly fee
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Condos must be approved
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Cannot refinance from another loan type
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Non-occupying co-borrowers are not allowed
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Possible to get 3 years after a bankruptcy, foreclosure or shortsale
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Must be in a USDA eligible area
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Income limits for entire household
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VA Loans
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0% Down Payment – NO Down Payment Required!
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No Income limits
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Fixed rate
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No mortgage insurance
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One of the best loans available for service men and women. Rates are typically lower than a conventional loan. If the veteran has disability from their service, they may be eligible to waive the upfront guarantee fee. VA can be stricter on the debt to income ratios and job history than other loan programs.
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Requires an upfront guarantee fee (typically 2.3% for the first use and 3.6% for each subsequent use)
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Co-borrower must be legally married
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Does not allow for non-occupant co-borrowers
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Eligibility must be verified with VA
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Possible to get 2 years after a bankruptcy, foreclosure or shortsale
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Utah Housing Loan Programs
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0% Down – NO Down Payment Required!
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There are 3 different loan options
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FHA/VA & Freddie Mac Conventional
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Has income limits
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Must be owner occupied
For these loan programs, Utah Housing creates a 2nd mortgage to cover the cost of the down payment and can include a portion of the closing costs in the 2nd mortgage. This is a great option for borrowers with no down payment..
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Will have 2 mortgage loans; one loan for the mortgage and one loan for the down payment and a portion of the closing costs
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The 2nd mortgage interest rate is 1% higher than the 1st mortgage rate
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Primary residences only
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Condos and Manufactured Homes permitted
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3 programs available –
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FirstHome – FHA loan program; for 1st time homebuyers; combined household income limits; minimum 660 credit score; no portion of the home may be rented
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FHA/VA Mortgage – no 1st time homebuyer requirement; qualifying income limits; minimum 620 credit score; can be a duplex or have an accessory apartment and rent one of the units
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Freddie Mac HFA Advantage – conventional loan program; no 1st time homebuyer requirement; qualifying income limits; minimum 700 credit score; a portion of the one-unit home may be rented
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