Mortgages Today are extremely regulated by federal and state mortgage rules and regulations. Residential mortgages today need to abide by RESPA laws and the new SAFE ACT. There are several mortgage loan programs. Government loan programs are FHA Loans, VA Loans, USDA Loans, and VA Loans. Fannie Mae and Freddie Mac mortgage lending guidelines sets the requirements for Conventional Loans. Conventional Loans are called Conforming Loans because they need to Conform to Fannie Mae and Freddie Mac mortgage lending guidelines. Residential Mortgages Today need to meet the mortgage lending guidelines of the particular mortgage lending program. FHA Loans require a minimum of 580 FICO credit scores to qualify for a home purchase FHA Loan with 3.5% down payment. Conventional Loans, minimum credit score requirements is 620 FICO credit scores. Down payment requirements for Conventional Loans is 3% down payment for first time home buyers with Fannie Mae. Freddie Mac allows 3% down payment on a conventional loan home purchase loan as long as the home buyer has not owned a home in the past 3 years. Otherwise, minimum down payment requirements on Conventional Loans are 5% down payment for owner occupied primary homes, 10% down payment on second homes and vacation homes, and 20% down payment on investment home purchase mortgage loans.
Commercial Loans are not as tightly regulated as residential mortgage loans and many states do not require a mortgage loan originator’s license to originate and fund commercial mortgage loans. Commercial mortgage loan programs vary from traditional long term commercial loans with lower mortgage rates for commercial real estate investors with documented income and good credit to short term hard money loans and bridge loans where credit and income is not an issue but down payment is. Short term hard money loans and bridge loans have high upfront origination fees and interest rates and normally require at least 30% down payment.
There are many specialty financing loan programs out in the market today. Besides hard money loans and private money loans, there are specialty unsecured financing programs for doctors and members of healthcare professions. There are many equipment financing loan programs where business owners can utilize in not coming up with upfront working capital when starting a business and go through the leasing financing program.