In this blog, we will cover and discuss the top-rated five-star Washington DC lenders for traditional and non-QM mortgages who have the best mortgage rates. Washington, DC has one of the highest home prices in the nation. Whether you have great credit, bad credit, or are seeking unique non-QM and alternative financing loans with multiple mortgage options, and competitive rates, you will find the information on this guide.
One of the main reasons why Gustan Cho Associates, empowered by NEXA Mortgage, LLC has a national five-star reputation is because we have the states (licensed in 48 states), we have the best and wide variety of mortgage loan options (lending network with 210 wholesale lending partners), and we have the lowest mortgage rates (We have our compensation on a broker comp platform which limits the max compensation for the whole company at 2.75% where mortgage bankers need to charge over 5% to 9% compensation on the back-end).
We will explain how to shop for the best Washington DC lenders for traditional and non-QM mortgages. As Gustan Cho Associates continues to grow our team, we are also expanding our list of states we are licensed in. We are extremely excited to announce we are now licensed in the territory of the District of Columbia. As many Americans know, the District of Columbia is the capital of our country.
Washington DC Housing Market in the News
With a lot of attention on national politics these days, D.C. is on the radar of most Americans. Many of our readers live in the District of Columbia. The Nationwide Multistate Licensing System (NMLS) requires a mortgage company to have a specific license. The housing market in Washington, DC has been booming for many years. Finally, in the fourth quarter of 2022, the housing market in Washington, DC has stabilized and seems like there is a correction.
Median home prices from $575,500 in June of 2022 to $535,000 in November 2022. Housing inventory has increased 17.8% since June 2022. Homes in Washington, DC sat in the market three times longer from November 2021 until November 2022 than it did the same time period the previous year.
Gustan Cho Associates were just granted this license. In this blog, we will detail some facts about the District of Columbia, sample a few mortgage products offered by Gustan Cho Associates, and how to apply for a mortgage with our team.
The Best Washington DC Lenders For High-Balance Conforming Loans
Our team is very excited to offer our mortgage services in our nation’s capital. As we learned in elementary school, Washington D.C. is not a city or a state but is a federal district that has been in existence since 1790. The federal district has a population of nearly 700,000 people. The history of Washington D.C. runs very deep.
FHA and Conforming High-balance mortgage loans are mortgage loans that are higher than the maximum loan limit in low-cost median priced areas. For example, the maximum FHA loan limit for Washington, DC for 2023 is $472,030. Any FHA loan that is higher than the low-cost median priced area loan limit of $472,030 and up to $1,089.300 is called FHA jumbo loans or high-balance FHA mortgage loans. Same with conventional loans. Any conventional loans in high-cost areas higher than $726,200 up to the ceiling of $1,089.300 is referred to as Jumbo conventional loans or Jumbo conforming loans. Many refer it to high-balance conforming loans.
Washington DC has one of the highest home prices in the nation. Gustan Cho Associates can get you qualified and approved for high-balance FHA and conforming loans in Washington DC. We are one of the top Washington DC lenders with no overlays on government and conforming loans.
How Washington D.C. Was Founded
Back in 1774, our nation’s first continental Congress or group of representatives from our colonies needed a place to meet. Our 13 states wanted a capital that would represent them equally which was not too far north or not too far south.
Many people live in surrounding states of Washington, DC. They live in Virginia, and Maryland but work in Washington DC.
So, in 1970 George Washington chose a spot right between the states of Maryland and Virginia. America’s founding fathers were conscious of the fact that people living in this area may unfairly influence Congress and to this day, the District of Columbia residents do not have voting representation in Congress.
Best Washington DC Non-QM Lenders For Bad Credit
The District of Columbia has one of the highest home prices in the nation. Tens of thousands of workers work for the federal government including thousands of politicians and aides who need to purchase second homes in DC. Many homebuyers who cannot qualify for government or conventional loans can be eligible for non-QM loans. Non-QM loans are an alternative type of mortgage loan program using alternative types of income. Non-QM mortgage loans are not hard money loans. Hard money loans on owner-occupant and second homes is illegal.
For obvious reasons, residents of D.C. can vote in federal elections. During the war of 1812 against Great Britain, the city was nearly destroyed. There is a ton of history in this area and after Abraham Lincoln gave his famous Emancipation Proclamation in 1863, the population of the D.C. area grew. Many freed slaves came to live in the area.
Washington DC lenders offering non-QM and alternative lending mortgage options offer dozens of different type of non-QM mortgages in Washington, DC. Popular non-QM loan programs for Washington, DC homebuyers include the 12-month bank statement mortgage loans, No-Doc Mortgages, DSCR Mortgage Loans, Asset-Depletion Mortgages, ITIN Mortgage Loans, Expatriate Mortgage Loans, Foreign National Mortgages, Profit and Loss Statement Only Mortgages, and hundreds of other non-QM mortgage loan options.
Size of Washington DC
Washington D.C. may be small in area, only about 68 square miles, but this area has some of the most historic buildings in the country. The United States Capitol building, the White House, Supreme Court building are just a few of these buildings.
Landmarks in Washington DC
There are also numerous monuments and landmarks including the Washington Monument, Lincoln Memorial, and The D.C. war memorial. Many students have a large school trip to visit these historic sites. When visiting D.C., you may learn many fun facts including the name Washington D.C. is named after George Washington and Christopher Columbus. D.C. stands for District of Columbia.
Washington DC Home of the President of the United States
The White House was formally called the president’s palace and Andrew Jackson was the first president to live there. In 1901, Theodore Roosevelt officially changed the name to the White House. There have been many pets who have lived in the White House, but an alligator may be the craziest one.
President Theodore Roosevelt let his kids bring many strange pets into the White House including a small bear, a lizard, a guinea pig, a badger, and even a one-legged rooster. If you have not visited the D.C. area before, it is a great time to learn about our nation’s history and have some great food during your trip. Tourism is one of the leading industries in the area. The D.C. Amtrak station is the second busiest station in the nation only second to New York City!
The Best Washington DC Mortgage Lenders with Lax Lending Guidelines
Gustan Cho Associates are proud to offer our no overlay mortgage programs in the District of Columbia. Many lenders add additional qualifying requirements to their mortgage programs above and beyond the agency guidelines. This is called a lender overlay.
Luckily, our team does not have lender overlays to get in our way. This is why the Gustan Cho Associates are able to help more families than most lenders across the nation. The team at Gustan Cho Associates has a national reputation of being able to approve and close mortgage loans other lenders cannot. Over 80% of our borrowers are folks who could not qualify at other mortgage companies either due to the lender having overlays or because the mortgage company did not have the loan option best suited for the mortgage borrower.
Our highly skilled team offers conventional, FHA, and VA mortgage loans in the District of Columbia. We also offer a full slate of NON-QM mortgage programs. Below are some basic qualifications for the programs we offer.
Washington DC Lenders With No Lender Overlays
Conventional financing – Conventional mortgage loans require a minimum credit score of 620. These programs are typically capped with a maximum debt to income of 49.99%, ideally lower. We offer programs directly from Fannie Mae and Freddie Mac.
Each agency has its own set of guidelines that can be strict compared to FHA or VA financing. Benefits to a conventional loan include cancelable private mortgage insurance when putting less than 20% down and are used for purchasing second homes and investment properties.
Many real estate agents prefer clients utilizing conventional financing as their appraisal requirements are slightly lax compared to government-backed financing.
HUD-Approved Washington DC Lenders For Bad Credit
FHA mortgage financing – If you are looking for Washington DC lenders who are experts on FHA loans, Gustan Cho Associates may be the lender for you.
FHA financing is a great mortgage program that many of our clients take advantage of. The Federal Housing Finance Authority overseen by the U.S. Department of Housing and Urban Development offers aggressive mortgage financing on primary residences.
An FHA loan is a fantastic low-down-payment mortgage option. With credit scores of 580 or above, you are only required to put down 3.5%.
Washington DC Lenders For Borrowers with 500 Credit Scores
FHA financing is also available for lower credit scores individuals. On FHA loans, you can go all the way down to a 500 credit score with a 10% down payment. Once again, any credit score above 580 will only require a 3.5% down payment. FHA financing also has favorable payment requirements for individuals with student loan debt.
We do not recommend borrowers stretch their budget further than a comfortable monthly payment, but FHA does allow a higher debt-to-income requirement compared to conventional financing. Not too many Washington DC Lenders can do FHA loans with credit scores down to 500 FICO.
One of the top Washington DC Lenders for bad credit and lower credit scores is Gustan Cho Associates. A larger percentage of our borrowers are folks with credit scores down to 500 FICO and need manual underwriting.
The Best Washington DC Lenders For Borrowers With Lower Credit Scores
An FHA mortgage is also a great financial tool that can allow you to build wealth even if you have had a bankruptcy in the past. The waiting period after a chapter 7 bankruptcy is only two years, half the time compared to conventional financing. And if you have a chapter 13 bankruptcy, you can actually purchase or refinance a property while still in the active chapter 13 bankruptcy.
Washington DC Lenders With Low Rates
Conventional mortgage rates require a full two-year waiting period after you are discharged from a chapter 13 mortgage. Since many chapter 13 repayment plans are five years in length, it could be up to seven full years before you qualify for a conventional mortgage loan. If you are already discharged from your chapter 13 bankruptcy, there is no waiting period to apply for an FHA mortgage. For more information on FHA bankruptcy lending, please call Mike Gracz at 630-659-7644 or email us directly at email@example.com.
Washington DC Lenders for High-Balance VA Loans With No Overlays
VA mortgage loans – If you were brave enough to serve our country, you have the ability to utilize one of the best mortgage programs available, a VA mortgage loan. A VA mortgage loan does not require a down payment which is the main hurdle most Americans face when attempting to purchase a home.
The best Washington DC lenders for VA loans are mortgage lenders with no overlays on VA loans. The team at Gustan Cho Associates are experts in helping our veterans with credit scores down to 500 FICO and high debt-to-income ratio get approved for a VA loan in Washington, DC.
With the crazy rate of inflation seen throughout the global economy, saving money is harder now than it has been in the past. Veterans of our country do not need a down payment and are able to qualify for a mortgage program that also does not have private mortgage insurance. Saving you thousands of dollars over the life of the loan.
Washington DC Lenders For VA Loans with Credit Scores Down to 500 FICO
A VA mortgage does not have a minimum qualifying credit score. We specialize in lower credit score VA mortgage lending and also offer manual underwriting. The VA does have a payment history requirement. The basic qualifications for a VA mortgage loan include clean 12-month payment history and all items that report to your credit.
A late payment or derogatory items such as a collection in the past 12 months could hinder your VA qualifications. An underwriter would also verify your ability to make your housing payment. They can view the last 24 months of rent or mortgage payments during the underwriting process.
Expert Washington DC Lenders For VA Loans While in Chapter 13 Bankruptcy
Our highly skilled VA team is here to assist you. We will complete a thorough credit analysis with you to determine your qualifications. Even if you have late payments reporting in the previous 12 months, our team will point you in the right direction to qualify for a VA loan as quickly as possible. Many veterans also have bankruptcies reported on their credit reports.
There is a two-year waiting period after a chapter 7 bankruptcy, very similar to FHA financing. There is also no waiting period during a chapter 13 bankruptcy just like FHA financing. As long as you are at least 12 payments into your bankruptcy without any mist payments, please reach out to our team today.
Washington DC Lenders Who Are Experts on Non-QM Jumbo Mortgage Loans
NON-QM mortgage products – The District of Columbia area has many self-employed individuals. Self-employed borrowers may face difficulty when qualifying for a mortgage due to how they filed their federal tax returns. Most self-employed individuals take advantage of write-offs to limit their federal income tax liability. Since the agency guidelines require mortgage companies to verify a borrower’s ability to repay, there are very black-and-white guidelines surrounding self-employed income. These guidelines are put in place to avoid a market crash as we saw in 2008.
Washington DC Lenders For Self-Employed Borrowers
Many NON-QM mortgage products are geared towards self-employed individuals and real estate investors. They are able to utilize rental income for investment properties to qualify for a mortgage. They are also able to utilize your self-employed income shown on your bank statements versus your tax returns.
The business-related deposits into your bank statements are used to calculate your qualifying income. In fact, tax returns are not required to qualify for these mortgage loans. The down payment requirements vary based on credit score and we recommend you reach out to Mike Gracz at 630-659-7644 to discuss your NON-QM options in the D.C. area. Our team has access to numerous NON-QM outlets, giving us a competitive edge.
Get Pre-Approved With Washington DC Lenders with Lax Requirements and Low Rates
Our team is excited to grow and is here to assist you with your mortgage needs. We will continue to update our readers as we expand into more states during the calendar year of 2023. Even if you have been turned down for a mortgage in the past, we recommend you reach out to our team as you may be running into a lender overlay. We strive on making our team available to fit your schedule and are available on nights and weekends. The application process is simple and completed online to streamline the process. Feel free to give us a phone call today with any mortgage-related questions.
January 23, 2023 - 10 min read