Home Purchase Programs- find the right mortgage.

Conventional (Best rates for the best credit)

General Requirements-

Good Credit (some minor dings allowed)

Loan Limits:

Single Family Residence- $275,000

Exceeding the Loan Limits- refer to the jumbo programs, or consider taking a second mortgage to cover the portion that exceeds the loan limit.

Income: (Monthly Debt vs. Monthly Income)

Top Ratio: 28% or less (Monthly Housing Expense)

Bottom Ratio: 36% or less (All Monthly Debts including Housing)

Exceeding Debt Ratios: you may exceed these ratios if there are compensating factors, or if you qualify under desktop underwriting.

Bankruptcy- must have been discharged at least four years ago, and credit must be re-established.

Desktop Underwriting- allows for more borrowers to be approved for conventional mortgages, even though they may not meet the above classic approval guidelines. (Click for more details).

Minimum Down Payment Requirements-

3% Down *- this program allows for gift of down payment or your own money but the interest rate runs a little higher.

5% or more Down on Primary Residence*- the minimum down payment on a primary residence is 5%. (Owner occupied homes that are multiple units may require larger down payments).

10% Down on Second Home- 10% down payment is required on one unit home used as a second home. Second homes must be in a designated vacation area or located some distance from your primary residence. Multiple units homes may require larger down payments.

10-20% Down on Investment Property- A 20% down payment is required on a one unit home purchased as an investment property, unless you can qualify under desktop underwriting which only requires only 10% down. (Multiple units require larger down payments).

*This applies to owner-occupied single family residences only, other types of property may have different refinancing requirements contact Velocity for details.

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FHA/VA
(Low rates, small to no down payments, less stringent credit requirements)

General Requirements-

Good to Fair Credit (some dings allowed)

Loan Limits:

FHA County Specific Maximum Loan Amounts- click here to see a list of county limits.

VA Maximum Loan Amount- $203,000

Exceeding the Loan Limits- depending on your credit refer to the conventional programs (good credit) or to the non-conventional programs (no credit or damaged credit).

Income: (Monthly Debt vs. Monthly Income)

Top Ratio: 28% or less (Monthly Housing Expense)

Bottom Ratio: 41% or less (All Monthly Debts including Housing)

Exceeding Debt Ratios: you may exceed these ratios if there are compensating factors, which are examined on a case by case basis.

Property Requirements: both FHA and VA properties must meet certain housing guidelines set by each agency.

VA Eligibility Requirements: you must be an eligible veteran (check with your local Veterans office).

Bankruptcy- must have been discharged at least two years ago, and credit must be re-established.

Minimum Down Payment Requirements-

100% FHA Neimiah Purchase- This program allows the seller to gift you the 3% down payment, through the Neimiah Foundation. You must have 1% of your own funds to be applied to the down payment/closing costs.

3% Down Standard FHA Purchase- requires at least 3% down payment. Due to the method that FHA loans use to calculate the loan amount some closing costs are paid for in the loan, however any remaining portion of closing costs are the responsibility of the buyer or may be paid by the seller.

100% VA Purchase- for those eligible veterans no down payment is required and closing costs can be financed in the loan.

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Non-Conventional
(Programs for damaged credit)

General Requirements-

Damaged Credit (derogatory credit allowed)

Credit Grade- depending on how much derogatory credit you will be assigned a corresponding credit grade (A⁺, A, A-, B, C⁺, C, C-, or D), please contact Velocity to help you determine your credit grade.

Loan Limits:

Minimum Loan Amount- $30,000

Maximum Loan Amount- $500,000

Exceeding the Loan Limits- in special circumstances the maximum loan amount can be increased.

Income: (Monthly Debt vs. Monthly Income)

Cannot exceed: 40 - 55% (All Monthly Debts including Housing vs. Monthly Income). The amount of monthly debt allowed changes depending on your credit grade.

Bankruptcy- allowed, but it will impact your credit grade depending on when the bankruptcy was discharged.

Charge-offs, Collections, Foreclosures, & Judgments- allowed, but once again it will impact your credit grade, and paying off certain accounts might be a condition to receiving a mortgage loan.

Minimum Down Payment Requirements-

Please note: mortgage lenders that allow damaged credit usually will not loan the full purchase price. Instead they will loan a portion of the purchase price (determine by your credit grade), and the remaining portion of the purchase price will need to be covered by a down payment or seller financing (see descriptions below).

5% Down Payment: usually 5% of your own money is required. (There are very limited circumstances where you won't have to come up with any money).

Seller Financing: this is when the seller is willing to take a private contract (2nd mortgage) on any remaining portions of the sales price. The terms of the 2nd mortgage will have to be determined by you and the seller before the purchase can be finalized.

General Guidelines on the Maximum Amount Financed based upon Credit Grading:

Credit Grade Max. Amt. Financed Credit Grade Max. Amt. Financed

A⁺ ^{95 - 100%} C⁺ 80%

A 90 - 95% C 75%

A- 85 - 90% C- 70%

B 80 - 85% D 65%

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Construction to Permanent All-In-One Loan

General Requirements-

Good Credit (some minor dings allowed)

Loan Limits:

Single Family Residence- $275,000

Exceeding the Loan Limits- refer to the jumbo programs, or consider taking a second mortgage to cover the portion that exceeds the loan limit.

Income: (Monthly Debt vs. Monthly Income)

Top Ratio: 28% or less (Monthly Housing Expense)

Bottom Ratio: 36% or less (All Monthly Debts including Housing)

Exceeding Debt Ratios: you may exceed these ratios if there are compensating factors, or if you qualify under desktop underwriting.

Loan Term- The construction loan lasts until the home is fit for occupancy, and then the regular mortgage term begins. The construction period length can range from 30 days up to 1 year.

Interest Accrual- During the construction period, interest is due monthly on the amount of the loan that has been take as a draw. During the Mortgage period, interest and principal are due based on a standard 15 or 30 year amortization.

Bankruptcy- must have been discharged at least four years ago, and credit must be re-established.

Desktop Underwriting- allows for more borrowers to be approved for conventional mortgages, even though they may not meet the above classic approval guidelines. (Click for more details).

Minimum Down Payment Requirements-

5% or more Down on Primary Residence*- the minimum down payment on a primary residence is 5%. (Owner occupied homes that are multiple units may require larger down payments).

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Alternative Programs
(Specialized non-conventional programs for good credit)

General Requirements-

Good Credit (some minor dings allowed)

Why Alternative Programs- these programs allow 100% purchase, and can offer better rates for those that narrowly missed qualifying for a conventional mortgage.

Loan Limits:

Minimum Loan Amount- $30,000

Maximum Loan Amount- $500,000

Exceeding the Loan Limits- in special circumstances the maximum loan amount can be increased.

Income: (Monthly Debt vs. Monthly Income)

Cannot exceed: 38 - 50% (All Monthly Debts including Housing vs. Monthly Income). The amount of monthly debt allowed depends on the specific alternative program.

Bankruptcy- usually not allowed within the past four to seven years.

Minimum Down Payment Requirements-

100% Financing- 0 down payment required.

Less than 100% Financing (Fannie Mae Fallout)- this allows for a decent interest rate when you narrowly missed qualifying for a conventional program. Please contact Velocity for exact down payment requirements.

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Jumbo
(Large loan amounts, usually anything that exceeds $240,000)

General Requirements-

Good Credit (some minor dings allowed)

Loan Limits:

Loan Amounts between- $275,000 to $1,000,000 (the loan amount allowed is dependent on the portion of the sales price that is financed).

Exceeding the Loan Limits- in special circumstances the maximum loan amount can be increased.

Income: (Monthly Debt vs. Monthly Income)

Top Ratio: 33% or less (Monthly Housing Expense)

Bottom Ratio: 38% or less (All Monthly Debts including Housing)

Exceeding Debt Ratios: you may exceed these ratios if there are compensating factors.

Bankruptcy- must have been discharged at least four years ago, and credit must be re-established.

Minimum Down Payment Requirements-

Maximum Loan Amount Chart for Specific Down Payment Amounts on Owner Occupied Single Family Residence (One Unit)-

Down Payment Max. Loan Amt. Down Payment Max. Loan Amt.

5% $300,000 30% $800,000

10% $400,000 40% $1,000,000

20% $600,000

Down Payment for Multiple Units, Second Homes, and Vacation Properties- please contact Velocity for exact down payment requirements.

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Rural Housing
(Available for rural communities only, 100% Purchase)

General Requirements-

Good Credit (some minor dings allowed)

Loan Limits:

County Specific Maximum Loan Amounts- call for the maximum loan amount for your county.

Income: (Monthly Debt vs. Monthly Income)

Top Ratio: 28% or less (Monthly Housing Expense)

Bottom Ratio: 41% or less (All Monthly Debts including Housing)

Exceeding Debt Ratios: you may exceed these ratios if there are compensating factors.

Property Requirements: home must meet exacting rural housing guidelines.

Geographical Limitations: only certain communities qualify- your town must usually be smaller than 10,000 people. (Contact Velocity to find out if the community you live in qualifies).

Minimum Down Payment Requirements-

100% Purchase + closing cost may be included- zero down and you can finance closing costs in the loan, up to the amount of the appraised value.

*Velocityloan.com's information and interactive calculators are made available to you as self-help tools for your independent use. We cannot and do not guarantee their accuracy or applicability to your circumstances. We encourage you to seek personal advice from one of our qualified mortgage professionals regarding your financing issues.