-VA still offers the same 100% program

-Conventional programs are also available for the higher credit scoring borrowers (minimum score for conventional 100% - 680)  These conventional programs even offer financing for the closing costs up to 103% of the sales price!

-USDA still offers the same 100% program for borrowers buying in less densely populated areas (City populations of approximately 10,000 or less with qualifying credit down to 580)

We don’t think that saving for a down payment should be the reason you put your dreams on hold. We can help you buy your dream home with a zero down mortgage loan. You’ll not only be able to afford a home sooner, you’ll probably be able to afford more home. With a zero down mortgage, the amount of loan you can qualify for is determined by your ability to make your monthly payments rather than how large a down payment you’ve saved. And, for most buyers, this means qualifying for a larger loan.

Buying a home is something we all dream about, usually for years. You may have saved money for a down payment, but just don’t have enough to buy your dream home. If that’s the case, a piggyback loan may be the best option for you. Different than a zero down mortgage, a piggyback loan is actually two mortgages. The first mortgage is for 80% of the purchase price. The “piggyback” loan (or second mortgage) covers the shortfall between the purchase price and your down payment savings.

Let us help you explore all your mortgage options. We look forward to helping you!

VA guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected against loss if you fail to repay the loan. In most cases, no down payment is required on a VA guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily available with other loans.

Other benefits of a VA loan include:

• Negotiable interest rate.
• Closing costs comparable – and sometimes lower – than other financing types.
• No private mortgage insurance requirement.
• Right to prepay loan without penalties
• Mortgage can be taken over (or “assumed”) by the buyer when a home is sold.
• Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.

Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount.

A VA loan can be used to buy a home, build a home and even improve a home with energy-saving features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA.

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender to qualify for the loan.

Today homebuyers are in a unique position to combine the benefits of a fixed rate mortgage with the savings opportunities of an adjustable rate mortgage. With a hybrid loan (also called a fixed-period ARM or hybrid ARM) you get the best of both worlds.

A hybrid loan gives you a fixed rate term, usually three, five, seven or ten years, with adjustable rates thereafter. These loans are typically expressed as a 3/1, 5/1, 7/1 or 10/1 ARM. The first number represents the number of years the rates are fixed. The second number indicates the adjustment interval (how often the interest rate will change). For a 7/1 loan, the fixed period is seven years with annual interest rate adjustments thereafter.

The advantage of a hybrid loan is that it gives you a lower fixed rate mortgage than you’ll typically receive with a 30 year mortgage. This is often an attractive loan choice for borrowers who expect to be selling their home within the first 10 years. You’ll get the advantage of a lower fixed rate while you’re living in the home. And if your plans remain steady, the adjustable rate wouldn’t be due until after you plan to move.

Hybrid loans are also an attractive loan choice for borrowers who want an ARM, but feel the need for added interest rate protection during their first years in the home. 

Whether you plan to move within 10 years or you’d like the added rate protection a hybrid loan affords, we’ll be glad to help you find the best loan program to meet your needs.  We look forward to helping you!

 That’s a good question and will depend on a few things.  But for the sake of your time we are going to list a few common scenarios that should give you a good idea.  Please call or email us with any questions. 

1.  Anyone looking to purchase that meets first time buyer requirements and needs down payment or closing costs assistance.  

(You cannot have owned a “primary” or main home in the past 3 years) 

 - No down payment required! If you purchase before Dec. 1, 2009 using the FHA and are single making less than $75K/yr or married making combined $150k/yr or less.  Minimum “middle” credit scores for anyone contributing income must be 620 or higher.  Full income documentation and disclosure required. 

**The USDA and VA both also offer no down payment programs as well.  Click here to learn about USDA.**

2.  Anyone looking to purchase that has their own down-payment money already saved or can save it before executing a sales contract.

- Minimum down payment 3.5% of the purchase price.  The funds for down payment must be in an account in your name for not less than 60 days (2 bank statement cycles) before the “official” loan application is taken and submitted for underwriting.  Minimum “middle” credit scores for anyone contributing income must be 580 or higher.  Full income documentation and disclosure required.

 **Buyers fitting this criteria may still be eligible for the first time home buyer tax credit but will not be able to use it for down-payment or closing costs because of the lower minimum credit score**

3.  Anyone needing to refinance an existing mortgage.

- No cash back allowed.  No more than 2 payments can have been made more than 30 days late in the past 12 months.  Minimum “middle” credit scores for anyone contributing income must be 560 or higher.  Full income documentation and disclosure required.

4.  Anyone wanting a cash-out refinance, home equity, pool or debit consolidation loan.

- You cannot have made more than 1 mortgage payment more than 30 days late in the past 12 months.  Minimum “middle” credit scores for anyone contributing income must be 660 or higher.  Full income documentation and disclosure required.

** We do offer additional cash-out loan options but they are on a case-by-case basis – please call us.**

5.  Anyone needing to refinance an existing FHA  mortgage. (No Cash Out Refinance)

- You must have a current FHA Mortgage and cannot have made more than 1 mortgage payment more than 30 days late in the past 12 months.  Minimum “middle” credit scores for anyone occupying the home must be 500 or higher.  Income and disclosure of liabilities may not be required.  A property appraisal may not be required for this type of loan either.

Please note that in today’s rapidly changing market these minimums are subject to change and are the minimum score requirements on 7/1/2009.  Each program is subject to its own income, appraisal and title requirements.

The Federal Housing Administration is an agency of the federal government. The FHA insures private loans issued for new and existing housing, and for approved programs for home repairs. The FHA was created by Congress in 1934, and in 1965 became part of the Department of Housing and Urban Development’s Office of Housing.

The FHA’s mission in the present day includes offering help borrowers get the amounts they qualify for, and to assist lenders by reducing the risk of issuing loans. To get situation-specific information and advice on how you might be able to take advantage of an FHA-insured loan, you’ll need to contact us and get started.

I have credit problems; will this hinder my chances of getting an FHA loan?

The FHA recommends a Credit Repair program for anyone who fears being denied a loan as a credit risk. We offer an in house credit evaluation and restoration program.

You should, as a rule, be in a satisfactory payment situation for at least one year before applying for any FHA loan program. FHA is usually pretty lenient on “OLD” collections/charge offs as long as you are able to provide a good explanation of what caused them.

Our credit counselor can address issues such as income-to-debt ratio, how to maintain satisfactory payments for the required time and challenging unfair or erroneous entries on your credit report. The FHA uses common sense Underwriting, call 972-422-9016 x 500 or click here today to get started.

What kinds of information will I need to gather to get started with the FHA?

The FHA Underwriter will ask for a lot of information, which will go on your loan application. Be sure to ask your loan officer for a complete list of required data and give yourself plenty of time to gather the information. Click here to download a list of normally required documents.

You will need to provide the FHA with a wide range of details; this includes all the addresses where you have lived in the previous two years, your employers name and addresses for the last two years, plus the amount of your Gross Monthly Salary. If you have had multiple jobs over the last twenty-four months, you will need your W2s for all of them.

If you are Self Employed you will need your income tax forms submitted for the last two years. If you don’t have copies of your W2s, you should contact your employers for assistance. If you need replacement copies of your income tax returns, go to IRS’ site and follow the instructions on how to order replacements. A tax transcript is free of charge, and copies of actual tax returns cost around forty bucks.

1. Low out of pocket requirements – You can put as little as 2.25% of the sales price down. That down payment can be a gift and can even be funded by the seller.

2. Flexible Underwriting guidelines and lower credit score requirements – The underwriting process for FHA is not as cut and dry as it is with conventional guidelines. FHA will accept common sense explanations in some cases.

There is room for credit blemishes when using the FHA. They will not penalize you for something that happened 4, 5, 6, or more years ago. Life happens and sometimes financial hardships do to. At Southwest Funding we understand that issues arise and we know how to address them. We are normal people too, therefore we understand. If for some reason you are not approvable now we will help you map out a plan that when implemented will result in an approval in the future!

Call or click here today to get started. 972-422-9016 x 500

Limited Rehab Program Overview

The 203(k) streamline loan program gives borrowers the ability to repairs and improvements either to the home that they currently live in, or that special fixer-upper opportunity, without the extra cost or details as found in the regular 203k. One single loan is used to pay for the (purchase or refinance) and the costs of  repairs or “Non-Structural” renovation and improvements. 

This program is only available to certain lenders, designated by the U.S. Department of Housing and Urban Development (HUD). The FHA 203(k) streamline program has already provided many buyers with the funds necessary to buy their first home, or greatly improve a current home. The FHA 203(k) streamline loan is available to borrowers of all income levels, to homeowners who plan to occupy the house, and for homes with one to four units.

203K Streamline Eligible Borrowers:

• Owner Occupants – Purchase – Refinance
• Investors NOT allowed

Types of 203K Streamline Loans:

• 30 or 15 year fixed rates

Eligible Properties:

• Single family dwellings
• Condominiums (FHA project approval required) 
• Townhomes
• 1-4 Unit Properties (One Unit must be Owner Occupied)  

Eligible Repairs and Improvements:

• Roofs, gutters and downspouts
• HVAC systems (heating, venting and air conditioning)
• Plumbing and electrical
• Minor kitchen and bath remodels
• Flooring: carpet, tile, wood, etc.
• Interior and exterior painting
• New windows and doors
• Weather stripping & insulation
• Improvements for persons with disabilities
• Energy efficient improvements
• Stabilizing or removing lead-based paint
• Decks, patios, porches
• Basement completion and waterproofing
• Septic or well systems
• Purchase of new kitchen appliances or washer / dryer

Repairs Not Permitted

• Landscaping or yard work
• Major remodeling
• Moving a load-bearing wall
• Room additions or add-ons to the home
• Fixing structural damage

Requirements to Perform the Work

• Borrowers can select among licensed contractors.
• The lender will review the contractor’s experience, background and referrals.
• The lender will want a copy of the contractor’s estimate and the agreement between the contractor and borrower.
• Borrowers can also arrange to do some or all of the work under a “self help” arrangement.
• Do-it-yourself projects require providing the lender with documentation supporting the borrower’s knowledge, experience and ability to perform the necessary work.

Disbursement of Payments

• Maximum of two payments to each contractor, including the borrower, providing the borrower works under a “self help” plan.
• No more than a 50% advance is allowed.
• Do-it-yourself allowances do not include labor; only materials costs are allowed.
• Final payment is paid after submission of evidence of payment to sub-contractors / suppliers or other possible lien claimants.

Reasons to Apply For a Loan Below $15,000

• The lender is not required to inspect the completed work.
• The lender is not required to authorize a third party to inspect the completed work.
• A letter from the borrower or copies of contractor receipts will suffice as notice of completion, providing the lender has no reason to determine a third-party inspection is necessary