FHA/USDA/VA and Conventional Mortgage Loan News

Archive for the ‘No Money Down’ Category

USDA and VA Loans

USDA Rural and VA Guaranteed Home Loans are still your best bets for 100% financing in today’s mortgage environment. Both programs have qualification requirements. USDA has maximum income and property location requirements and VA has military service requirements but both have no down payment requirements under $417,000 loan amount, although it would be doubtful you could qualify for a $417,000 loan amount given the USDA maximum income requirements.

USDA NO Money Down

To find out if you qualify within the maximum income requirements for as USDA loan, take a look at this link. In much of Oregon and Lane County specifically, a family of 1-4 people can make an annual income of up to $73,600. and a family of 5-8 can make up to $97,150. Even if you are over the income limit, there are some adjustments to income that may bring you inline. To find out what they are for Lane County, check out this link. Here is a partial map for Lane County (the dark area is not eligible):

You can check out this USDA Property link to find out where in Oregon you should be looking for a USDA qualified property. You can also use this link to find out if a specific property qualifies for the program. There is also a link on that site for some areas that normally wouldn’t qualify that are special for the program, like disaster areas.

VA NO Money Down

VA, like USDA does not make the loans for these programs, they offer a guarantee. That guarantee for VA will allow you to purchase (if you qualify) up the a $417,000 home in our area with no down payment. You can purchase a larger loan with down payment, but less down payment than normally required with a conventional loan. To be eligible for a VA loan, you must have completed a minimum of three month’s of active duty  military service or six years of reserve duty. To find out the specific requirements, check out this link.

No Mortgage Insurance

Neither program requires mortgage insurance, however both do have a “financed” funding fee. This fee is waived for VA borrowers with a 10% or greater service connected disability.

Call Today

To find out if you qualify for either program or to get started on the road to homeownership, give me a call today at 541-342-7576/541-221-3455 cell or e-mail me. I am a Vietnam era veteran and specialize in government loans. Purchase or refinance, VA, USDA, FHA or conventional, I am your Loan Guy. Let’s get together and get you started.

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I am going to be answering some questions that are coming up on My FHA Mortgage Blog over the next few weeks either here or on one of my other two blog sites, FHA Loans and Eugeneloanguy. I am hoping that by answering questions posed by the public we can get better information out there than what we have been seeing on the internet. There are a lot of myths and fallacies on the internet, just take a look at this post to see what I am talking about. This particular question has to do with closing costs and a USDA loan. I hope this series helps.

Will It Hurt Me If I Have A Family Member Deposit A Check Into My Bank Account For Closing Costs?

November 18, 2009

I am buying a house and the lender needs proof(bank statement) that I have enough to cover closing costs. A family member is going to help pay closing costs. Will it hurt me when they look at my bank statement and see that the amount to cover closing costs came form a family member? Its a USDA Rural Housing Loan.

A USDA Guaranteed Mortgage, like an FHA loan allows you to receive gifts from family members for down payment and closing costs associated with a loan. The important thing to remember is that the lender will want to see a paper trail for the gift. That means that you will need the deposit slip for the gift, a copy of the check for the gift, and most often a copy of the bank statement from the donor showing the ability to give the gift. There is also a gift letter that will need to be signed by the recipient and the donor. Except in very limited circumstances, cash is not acceptable.

If you have questions about USDA procedures or are ready to start the loan process, give me a call today at 541-342-7576/541-221-3455 cell or e-mail me. I am here to help you through this process.

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Our USDA Guaranteed Home Loans are underwritten by our in-house underwriting staff, but after it is approved through our staff underwriters, the loan then must be forwarded to USDA for their approval of the loan, since they are the ones guaranteeing the loan. This is similar to what happens when a mortgage insurance company requires loans to be submitted to and approved by them prior to insuring the loan.

Because this is an extra step in the process and USDA is currently reporting they are 20 business days out in reviewing the loans, they are not closing on original schedules. 20 business days is what is in a normal month, so it may take up to two months to close a USDA loan, since normal processing time on a loan is about 30 days.

This just means that buyers, sellers and the Realtors involved in a USDA transaction should be prepared for the additional time in process. If you have questions about USDA Guaranteed Loans, or any other loan product for Oregon, Washington or California, give me a call at 541-342-7576/541-221-3455 cell and let’s discuss your process. It is worth waiting a bit longer for one of the only 100 per cent loan to value loans available in today’s market. Processing time in Washington is currently longer than Oregon.

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Now, the final chapter in this series, part 8. Who would you think it might be that would be a key person after the movers? Well, for a First Time Home Buyer that purchases their home before November 30, that would be the IRS and/or your tax preparer, so you can get your $8,000 tax credit in a timely manner. The IRS has a great section of questions and answers about the First Time Home Buyer Tax Credit so follow this link if you have any questions about it that I haven’t already covered.

The form used to apply for your First Time Home Buyer Tax Credit is an IRS form 5405 and you can get it on this link. I have been informed by someone that received the tax credit by filing this form for 2008, that it only took 2-3 weeks before they received the check. What are you waiting for?

So, there you have it, eight very important parts of your new home purchase. If you have more questions or are ready to get started on your $8,000 tax credit, give me a call at 541-342-7576/541-221-3455 cell or e-mail me today.

So, who are the key people in a Eugene/Springfield Oregon area home purchase for a First Time Home Buyer? I am going to answer this question in an eight part series, so you will have to wait till part 8 before you know who they all are. But, now I am going to start with NUMBER ONE: The Real Estate Agent. Also, it is important that this be done shortly to find and close on a home before the tax rebate deadline of November 30.

Your Real Estate Agent in Oregon is a Broker and could/should be a Realtor®, but doesn’t have to be. To be a Realtor®, they need to belong to the national association of Realtors®, and it a trademarked designation. Often, they will be involved in recommending and coordinating several of the other key people necessary.

There primary job is to listen to your wants and needs and then match those with properties that are on the market for you to see. Additionally, they will advise you on the fair market value of the home you are looking at. Best of all, as the buyer, your Realtor® will cost you nothing.

Your agent will help protect your interests by negotiating price, repairs and other vital details of the purchase on your behalf. Most people will only buy or sell 6-7 homes in their lifetime, but some Realtor® may have that may transactions in a month. Access to that kind of accumulated experience is a valuable asset in buying a home.

As a First Time Home Buyer, I have a booklet that is prepared to take you, step by step, through the home buying process. Step one is finding the right Realtor®, but step two is just as important, finding the right Mortgage Advisor and I will cover it tomorrow. If you would like to be referred to an excellent Realtor®, give me a call at 541342-7576/541-221-3455 or e-mail me. If you want an excellent Mortgage Advisor, call me.

This question still seems to be bugging a lot of people. If you listen to Realtors® or mortgage lenders (like me) or builders, or a myriad of other pundits, it is the ideal time to buy a new home in Eugene or Springfield or Cottage Grove or Creswell or Veneta or Florence or Oakridge or any other town or city in Oregon. Overall, it think that they are right, however, in some cases, now is not the time to buy a new home.

For instance:

If you are a First Time Home Buyer and don’t know what you would use the $8,000 tax credit for….now is not the right time to buy a new home.

If you are paying rent on an apartment and buying a new home would not increase your monthly outgo and you enjoy hearing your upstairs neighbor’s TV at 3 a.m…….now is not the right time to buy a new home.

If your child is going to school at one of our fine universities and you can make an investment in a home but prefer they live in the dorm because of socialization…..now is not the right time to buy a new home.

If you are living in a home that is too small but don’t want to sell it for less than you think it was worth to buy one that is definitely selling for less than it is worth….now is not the right time to buy a new home.

 If you think that all of this is hype and property values are not going to come back up (like in previous cycles)…..now is not the right time to buy a new home.

If you don’t believe that you want to live in Oregon……now is (definitely) not the right time to buy a new home in Oregon.

If you believe that interest rates will get lower and prices will get lower and the government will pay you more to buy a new home later…..now is not the right time to buy a new home. (however, I think you are wrong.)

If however, you don’t fall into these categories, I think you should call me right away so we can see if you qualify to buy a new home in Oregon (also Washington and California). I know the programs that are available and am ready to see if we can get you on the road to homeownership. Call me today at 541-342-7576/541-221-3455 Cell or e-mail me for more information.

I recently came across this blog post from Craig Tomlinson of Bell Real Estate of Eugene. He was asking some of the same questions that a lot of people are right now about what is going to happen with FHA loans in the future. Like him, I don’t have the answers to what FHA will be doing, but I do know what they are doing. FHA still is only 3.5% down payment. FHA loans can be combined with the Springfield SHOP and Eugene HAP programs. FHA loans have more liberal underwriting criteria. FHA remains the number one choice for First Time Home Buyers. FHA does not require appraisals ordered through HVCC.

All of these are great characteristics of FHA loans. They are also some of the things that set them apart from most conventional loan programs. They could be changed in the near future if FHA’s reserves drop below 2% which is just one more reason to seriously consider getting off of the fence if you are “thinking” about buying a home. Craig has a great point when he said the changes will “probably not (be)anything that will help people get loans.”

We know that currently the First Time Home Buyer Tax Credit will go away on November 30. It is possible that the increased loan limit for Lane County will go away in January and changes in underwriting, down payment and mortgage insurance could take place any time. If you are thinking about buying a home, schedule one of our First Time Home Buyer seminars, for Thursday or Saturday. You can always call me if you have questions at 541-342-7576/541-221-3455 Cell or e-mail me.

It used to be that if you were applying for a 100% USDA Rural Guaranteed Mortgage, you couldn’t have more than $5,000 left over at closing because the main purpose of the loan was to help people purchase homes in “under” served areas with no money down. That restriction has changed for this USDA no money down program.

Now, the determining factor has to do with “IF” the buyer has enough liquid assets to make a 20% down payment and can qualify for a conventional loan. To me, this makes a lot more sense than getting someone into a home and taking all of their cushion away. USDA does not require reserves after closing, but it is nice that there can be some reserves.

Sometimes rules change for the best, instead of for the worst. I think this is one of those times. If you have any questions about qualifying for a USDA Rural Guaranteed Loan, give me a call at 541-342-7576/541-221-3455 Cell or e-mail me.

The Oregon USDA Rural Guaranteed Home Loan limits have been raised for 2009.  Now, home buyers with higher incomes can qualify for a USDA Rural Guaranteed Home Loan in Oregon.  This USDA home purchase program is one of the very few No Money Down Payment programs available. The USDA Rural Guaranteed Mortgage Loan has lower monthly payments than an Oregon FHA Mortgage Loan because it has no mortgage insurance. Be sure and check the chart to have the confidence that your income is within the Oregon USDA Rural Guaranteed Mortgage Income Limits for 2009.

Lane County has a loan limit of $73,600 for a family of up to 4, as does the majority of the state. Only the Corvallis and Portland metro areas have a higher income limit. Take a look at the USDA Rural Guaranteed Home Loan qualifying section, because even if your income is higher than the stated limit, there are certain adjustments to income that may be able to help you qualify for an Oregon USDA Rural Guaranteed Home Loan.

Oregon USDA Rural Home Loan Income Limits for 2009:

* ADD 8% OF 1-4 PERSON LIMIT FOR EACH PERSON IN EXCESS OF 8 PERSONS – MSA stands for Metropolitan Service Area

** MODERATE INCOME IS DEFINED AS THE GREATER OF 115% OF THE U.S. MEDIAN FAMILY INCOME OR THE AVG OF THE STATE-WIDE AND STATE NON-METRO MEDIAN FAMILY INCOMES OR 115/80THS OF THE AREA LOW-INCOME LIMIT

Call me at 541-342-7576/541-221-3455 Cell or e-mail at eugeneloanguy@gmail.com for more information. Or fill out the contact form below.