General requirement for fixed and adjustable loans 

  • Credit - 620 withno bankruptcy (chapter 7) in the past four years, exception is considered with extenuating circumstances.

  • Income - proof of past two-year income for W-2 earners. Income source from pension, IRA, child support, alimony, and other third-party income source must evidence three-year continuance.

  • Down payment - min 3% for one unit property, down payment can be a gift by close relatives (with conditions)

Expanded programs available for self-employed and 1099 income borrowers 

  • Income can be documented by 12- or 24- month bank statements or a combination of 1099 and bank statements or profit and loss statement signed by tax preparer along with bank statements.
  • Expanded programs require a min credit of 680 and min down payment of 10% (varies with programs). Down payment can be gifted by close relatives (with conditions).

FHA, a federally insured loan program 

  • Credit - min credit score of 500, min down payment 10%, with at least 3.5% borrower's own funds. Credit score => 580, min down payment 3.5%, entire down payment can be a gift from family members (with conditions).
  • Property eligility = 1-4 units primary residence (borrowers must occupy one unit), 3-4 unit property must pass FHA self-efficient test (75% of gross rental income => monthly mortgage payment, taxes, insurance and HOA fees.
  • Loan limit - subject to county limits.
  • FHA 203K loan - offers a renovation loan to that allows financing both the purchase (or refinance) of a home and the cost of repairs or renovations in a single loan.

VA loan eligibility and benefits 

  • Eligibility for a VA loan is determined by the U.S. Department of Veterans Affairs and is based on military services or specific affiliation. All applicants must obtain a COE, Certificate of Eligibility.
  • Credit - lenders require a min credit score of 620
  • Down payment - no down payment is required for VA loans.
  • Income - VA loans use residual income calculation which includes a monthly maintenance expense of 14¢ per sq ft.