Loan Types

Finding the perfect home is just the first step. Choosing the right mortgage can make a significant difference in achieving your financial goals. I can help you navigate the various types of mortgages to find one that fits your unique needs. Here's how different mortgage options can benefit you:

Down Payment Assistance

CONVENTIONAL LOAN

Conventional loans is one of the most popular and flexible options available. These loans are not backed by the government, like FHA or VA loans, but instead are offered through private lenders. Conventional loans, however, are regulated by standard lending guidelines and may conform to rules set by government-sponsored enterprises like Fannie Mae and Freddie Mac, but they remain independent of HUD.

Down Payment Options Conventional loans offer down payments as low as 3-5%, making homeownership accessible to a wide range of buyers. This is an excellent option for buyers who have solid credit but may not have saved up for a large down payment. Example: $200,000 home x 3% = $6,000 down payment Primary Home: 3-5% minimum of down payment required. Second Home (or vacation home): 10% minimum of down payment required. Investment Property: 15-25% minimum of down payment required depending on 1-4 units. Down Payment Assistance options may be available dependent on Area Median Income, (AMI) A key metric used by the U.S. Department of Housing and Urban Development (HUD) to determine eligibility for federal housing programs. Once an application is submitted, Alejandro can review the numbers to determine if your file can qualify for down payment assistance.

Credit Scores While the minimum credit score for a conventional mortgage is 620, they are usually best for buyers with average or above average credit scores.

Priviate Mortgage Insurance (PMI) For borrowers who can make a down payment of 20% or more, conventional loans allow you to avoid PMI altogether. Even with smaller down payments, PMI on conventional loans often costs less and can be canceled once you reach 78% equity in your home. However, PMI monthly payment is heavily factored by your credit score. The higher the FICO score, the lesser the monthly PMI. The lower the FICO score, the higher the monthly PMI.

Appraisals Unlike FHA and VA loans, which require homes to meet strict safety and habitability standards, conventional loans allow for more flexibility. Conventional appraisals primarily focus on the fair market value of the home based on comparable sales in the area, rather than scrutinizing every aspect of the property’s condition. This means the appraisal is less likely to flag minor cosmetic issues or require specific repairs unless they significantly affect the property’s safety or value. Since there are fewer strict guidelines compared to FHA or VA loans, the appraisal process for conventional loans is often faster. This can help speed up the loan approval process and get you to the closing table more quickly. Conventional loans give buyers more freedom to negotiate with the seller as a better offer, as opposing to trying to purchase with an FHA loan.

Federal Housing Administration (FHA)

An FHA loan is a type of mortgage insured by the Federal Housing Administration (FHA), a government agency that aims to make homeownership accessible to more Americans. FHA loans are particularly beneficial for first-time homebuyers and those with less-than-perfect credit or limited savings for a down payment. Like VA mortgages, these loans are only for primary residences.

Down Payment Options FHA mortgages will allow for a down payment of as little as 3.5% of your purchase price up to 4-units! Example: $200,000 X 3.5% = $7,000 Down Payment Assistance options may be available dependent on application numbers. While there are a lot programs available, each program is unique on ensuring it meets the program checklist for eligibility. Once an application is submitted, Alejandro can review the numbers to determine if your file can qualify for down payment assistance. One-Time Construction loan is also available for FHA. 3.5% Down payment required. -You purchase the loan and construct the loan at the same time. -If you have a lot already, this can be used in place for downpayment. Ask me more about this product.

Credit Scores Buyers with credit scores as low as 500 (with a 10% down payment) or 580 (with a 3.5% down payment) may qualify for an FHA loan. This makes it a great option for buyers working to rebuild their credit or who may not qualify for a conventional loan. ****Disclosure**** A 500 FHA credit score makes you eligible to apply for an FHA loan, but approval is not guaranteed. Success depends on meeting other FHA and lender-specific requirements, including down payment, income stability, and overall financial health. A 500 FHA credit score makes you eligible to apply for an FHA loan, but approval is not guaranteed. Success depends on meeting other FHA and lender-specific requirements, including down payment, income stability, and overall financial health. Lenders look at the overall credit history, including patterns of late payments, collections, or bankruptcies. Even with a 500 score, borrowers need to demonstrate an effort to improve their credit profile. Compensating factors provide additional assurance to lenders that the borrower has the ability to repay the loan, even if certain parts of their financial profile are less than ideal.

Mortgage Insurance Premium (MIP) This is a required insurance policy that protects the lender in case the borrower defaults on the loan. MIP is mandatory on all FHA loans regardless of the down payment amount. FHA loans are designed for borrowers who may have lower credit scores or limited savings, so they present a higher risk to lenders. The MIP ensures the FHA program can continue insuring loans by covering potential losses from borrower defaults. How MIP Works on an FHA Loan Upfront Mortgage Insurance Premium (UFMIP) Borrowers must pay 1.75% of the loan amount as an upfront fee. This can be paid at closing or rolled into the total loan amount. Example: On a $200,000 loan, the UFMIP would be $3,500. Annual Mortgage Insurance Premium (MIP) Borrowers also pay an annual MIP, which is divided into monthly payments and included in the mortgage bill. The MIP rate varies depending on the loan term, loan amount, and loan-to-value (LTV) ratio. For most 30-year FHA loans with less than 5% down, the MIP rate is 0.85% of the loan balance annually.

Appraisals While FHA appraisals are much like Conventional appraisals, there are a few differences. FHA has some extra condition requirements for the home. Some of these requirements are: -Operational/functioning appliances -No chipped paint inside or outside of the home -Clean, continuous water supply with sanitary facilities -Free of lead-based paint FHA appraisals are essentially covering “The Three S'” Safety: The home should protect the health and safety of the occupants. Security: The home should protect the security of the property. Soundness: The property should not have physical deficiencies or conditions affecting its structural integrity.

U.S. Department of Veterans Affairs (VA)

It is designed to help eligible veterans, active-duty service members, National Guard members, Reservists, and certain surviving spouses achieve homeownership. These mortgages are for primary residences only. They offer some of the absolute lowest interest rates across all loan types and never require Private Mortgage Insurance! This program offers unique benefits that make it one of the most advantageous home financing options for those who qualify.

Down Payment Options No Down Payment Required VA loans allow eligible borrowers to purchase a home with zero down payment, making it easier to afford a home without saving for years. One-Time Construction loan is also available for VA. 0% Down payment required. -You purchase the loan and construct the loan at the same time. -If you have a lot already, this can be used in place for downpayment. Ask me more about this product.

Credit Scores The VA loan program does not set a minimum credit score requirement. Instead, the U.S. Department of Veterans Affairs leaves the decision to individual lenders, who evaluate a borrower’s creditworthiness based on their own criteria. However, VA loans are known for their flexible credit requirements, making them accessible to borrowers with varying credit profiles. While there is no VA-mandated minimum credit score, most lenders look for a score of 580-620 or higher. Some lenders may approve borrowers with lower scores, especially if they have other compensating factors. -Luckily I work with some amazing lenders who are more than willing to give a veteran a second chance to homeownership.

Funding fee The VA funding fee is a one-time fee charged to most borrowers using a VA loan. It is required by the U.S. Department of Veterans Affairs to help sustain the VA loan program and reduce the cost to taxpayers. The funding fee helps ensure that the program remains available for future veterans and service members while allowing the VA to guarantee loans without requiring private mortgage insurance (PMI). This fee varies from 0.5% of your loan amount to 3.6%, depending on a few factors and how many times you have had a VA mortgage. This fee can be paid up front OR rolled into your mortgage. Some borrowers are exempt from paying the funding fee. Exemptions apply to: Veterans with a service-connected disability rating (even as low as 10%). Surviving spouses of service members who died in service or from a service-connected disability. Active-duty service members who have received a Purple Heart.

Appraisals While VA appraisals are much like Conventional appraisals, there are a few differences. VA has some extra condition requirements for the home. Some of these requirements are: -Working electric, heating and cooling systems -Adequate roofing that will last the foreseeable future -Sufficient in size for basic living necessities -Clean, continuous water supply with sanitary facilities -Free of lead-based paint -Free of wood destroying insects, fungus and dry rot -Safe and sanitary sewage disposal -Accessible from an all-weather public or private street -Attics and crawl spaces must be accessible and properly vented

U.S. Department of Agriculture (USDA)

A USDA loan is a mortgage program backed by the U.S. Department of Agriculture (USDA), designed to help low- to moderate-income buyers purchase homes in eligible rural and suburban areas. The program offers affordable financing with features that make homeownership more accessible for qualifying buyers.

Down Payment Options No Down Payment USDA loans allow buyers to finance 100% of the home's purchase price, making them ideal for those with limited savings.

Credit Scores USDA loans are more forgiving of lower credit scores, with many lenders accepting scores as low as 640.

Funding fee USDA loans, offered through the U.S. Department of Agriculture's Rural Development program, include two primary fees: Upfront Guarantee Fee: This is a one-time fee calculated as a percentage of the loan amount. For fiscal year 2024, the upfront guarantee fee is set at 1% of the loan amount. Borrowers have the option to pay this fee at closing or finance it into the loan. Annual Fee: In addition to the upfront fee, there's an annual fee assessed on the remaining principal balance. For 2024, this fee is 0.35% of the loan amount. It's divided into monthly installments and included in the mortgage payment. These fees support the USDA loan program, enabling it to offer benefits like zero down payment and competitive interest rates to eligible borrowers.

Appraisals When securing a USDA loan, the appraisal process has unique guidelines compared to FHA and VA loans. While all three loan types aim to ensure the property meets minimum standards of safety, livability, and value, USDA appraisals have specific requirements tied to the program’s focus on rural and suburban homeownership. -The property must be in a USDA-approved rural or suburban area as defined by the USDA. The appraisal includes verification that the home is within eligible geographic boundaries. (FHA and VA Loans: There are no location restrictions. Properties can be urban, suburban, or rural, as long as they meet the loan program's guidelines.) USDA appraisals ensure the property is "decent, safe, and sanitary," similar to FHA and VA standards. However, the USDA focuses on: Livability and functionality rather than minor cosmetic issues. Ensuring adequate utilities (water, sewage, and electricity) and compliance with local building codes. The property must not have any income-generating potential (e.g., large-scale farms or commercial enterprises).

Anchor 2

Down Payment Assistance (DPA)

The purpose of Down Payment Assistance is to aid a first-home buyer in purchasing a home. Assistance for the down payment and/or closing cost may help you close the transaction. Keep in mind that down payment assistance is only provided on certain contingencies. Just because you are a first-time home buyer, does not mean you qualify for the program. All programs have their own rules for making you eligible for the assistance. As a loan officer, I go down the list to see which program fits your situation. Please read below and see what may or may not qualify you for down payment assistance.

Down Payment Options Sometimes, the Down Payment Assistance programs are given in two options. 1. GRANT - This is forgivable after making 6-monthly payments or more on the loan. (Depending on program terms) If you sell the house, refinance, or take out equity on the home, you do not need to repay the grant used to assist you in making the down payment. 2. SECOND-LIEN - Property liens are notices that are attached to a piece of real property by a creditor when money is owed to them by the homeowner. Depending on the type, having a lien on your home could mean that you agreed to have your home act as collateral for a debt you owe, such as a mortgage or down payment assistance. This lien can have a fixed term of 1-10 years that will stay filed against the home. This lien may have contingencies such as the sale of the house, refinance, or taking out equity, which will trigger the lien to be paid, before you complete any transaction. This means if you decide to sell the house, refinance or take out home equity before the term of the second lien completes, you will be required to pay back this money before any of these transactions close. To avoid on paying the lien back (aka down payment assistance program used to help you get into the home) you must not trigger the lien to be collected by completing any of those transactions. After the term has been reached, the 2-lien may be forgivable contingent on the program used to help you finance the down payment. Some programs are not forgivable, which is why the loan officer must understand your situation short-term and long-term, for the home you want to purchase.

Down Payment assistance eligibility may vary based on credit score, income limits, and debt-to-income ratios. This is not an exclusive list.

Credit Scores When I review your application, the first thing I review is your credit score. Some Down Payment Assistance programs may not accept your application based on your credit score. It is my duty to see which program will accept your credit score. Most programs have a minimum FICO score of 620. While there are some programs that require no minimum credit score or a FICO score at all, they have other contingencies that must be met.

Anchor 3

Non-Qualified Loan (NON-QM)

Here is a non-exclusive list of NON-QM loans.

-BANK STATEMENT LOAN

-DSCR INVESTOR LOAN

-FIX N FLIP

-FOREIGN NATIONAL LOAN

A Non-QM (Non-Qualified Mortgage) is a type of home loan designed for buyers who may not meet the strict requirements of traditional or "qualified" mortgages. These loans are ideal for individuals with unique financial situations, such as self-employed borrowers, those with inconsistent income, or those who rely on alternative documentation to verify their ability to repay the loan. Non-QM loans offer more flexibility in terms of credit score, income documentation, and debt-to-income ratio but may come with higher interest rates and fees compared to traditional loans. They're a great option if you have non-traditional income or financial circumstances and need a tailored loan solution.

Down Payment Options Down payment options for Non-QM (Non-Qualified Mortgage) loans can vary depending on the lender and the borrower's financial profile. Here are some common scenarios: Standard Down Payments: Most Non-QM loans require a minimum down payment of 10-20%. The exact percentage depends on the loan program, the borrower’s credit score, and other risk factors. Higher Down Payments for Riskier Profiles: Borrowers with lower credit scores or unique income scenarios may need to provide a down payment of 20-30% or more. Flexible Programs for Stronger Profiles: If a borrower has a high credit score or significant assets, some Non-QM lenders might allow for down payments as low as 10%. Asset-Based Loans: For borrowers using asset-based qualification methods, a larger down payment (typically 25% or more) may be required to offset the reduced income verification. Bank Statement Loans: These programs, popular with self-employed borrowers, often require a down payment of 10-20%, depending on the lender’s guidelines. Non-QM loans are flexible, but down payment requirements tend to be higher than traditional loans due to the added risk for the lender.

Credit Scores Typical credit scores for Non-QM are usually starting around 680 or above. You can't ask a lender to not use your IRS tax return and lower FICO score? Non-QM loans are already risky for the lender. You either have good credit, and higher down payment or go back to the traditional loan option.

Funding fee Because this is not a traditional mortgage loan that is backed by the FED, but backed by private investors, Mortgage Insurance is not required. However, since these not traditional loans, the lender is may or may not charge an early penalty fee to payoff the loan early.

Appraisals Appraisal standards for Non-QM (Non-Qualified Mortgage) loans are similar to those for traditional loans in many respects but may also include additional requirements depending on the lender and loan program. Here's an overview: General Standards: Licensed Appraiser: The appraisal must be conducted by a licensed or certified appraiser. Market Value Assessment: The appraiser determines the market value of the property based on comparable sales, property condition, and market trends. Uniform Appraisal Dataset (UAD): The appraisal typically follows industry standards set by the Uniform Standards of Professional Appraisal Practice (USPAP) and may use Fannie Mae/Freddie Mac's UAD format. Non-QM Specific Considerations: Multiple Appraisals: Some Non-QM lenders may require two appraisals, especially for higher-value properties (e.g., over $1 million) or if the loan-to-value (LTV) ratio is high. Property Types: Non-QM loans can finance unique property types (e.g., non-warrantable condos, mixed-use properties, or investment properties), which may require specialized appraisal methods. Condition Requirements: Properties must meet minimum condition standards, but Non-QM lenders may accept properties in need of repair if the borrower plans to renovate and the property has sufficient equity. Valuation Flexibility: Lenders may allow more flexibility in appraised value acceptance, especially for unique or luxury properties, as long as the borrower compensates with a larger down payment. Compliance and Risk Mitigation: Loan-to-Value (LTV) Ratio Limits: Appraised value directly impacts LTV calculations, which influence the down payment amount required. Non-QM loans may have stricter LTV limits (e.g., 80-90%). Fraud Detection: Lenders often perform quality control checks to ensure the appraisal is accurate and free of any potential fraud. Additional Requirements: For certain Non-QM programs, lenders may request desk reviews or field reviews to validate the appraised value. Some lenders may also use automated valuation models (AVMs) as a supplement but not a replacement for a traditional appraisal. In summary, while Non-QM loans adhere to standard appraisal practices, they often include additional layers of scrutiny or flexibility depending on the borrower’s profile and the property type.

Anchor 1

ITIN LOAN

Un préstamo hipotecario con ITIN (Número de Identificación Personal del Contribuyente) es un tipo de préstamo hipotecario diseñado específicamente para personas que no tienen un Número de Seguro Social (SSN) pero poseen un ITIN, que es emitido por el IRS para fines impositivos. Este programa de préstamos ayuda a ciudadanos no estadounidenses, como inmigrantes o extranjeros que viven y trabajan en los EE. UU., a comprar o refinanciar una vivienda.

Opciones De Pago Inicial Los montos del pago inicial pueden variar entre el 3.5% y el 20% dependiendo de su puntaje crediticio, la deuda que tenga y los ingresos que obtenga. Se requiere comprobante de fondos para el cierre en efectivo - El pago inicial mínimo es del 3.5 % del precio de compra, excepto en los siguientes escenarios: ▪ Retención de una segunda vivienda: se requiere un pago inicial del 5 % ▪ VOR/Suplemento de crédito utilizado para la verificación de la vivienda con una puntuación de más de 700: se requiere un pago inicial del 5 % ▪ VOR/Suplemento de crédito utilizado para la verificación de la vivienda con una puntuación inferior a 700 (incluye la falta de puntuación): se requiere un pago inicial del 10 % ▪ Precio de la vivienda de más de $750 000: se requiere un pago inicial del 10 % (con excepción) - Costos de cierre del préstamo subyacente de la FHA ▪ Los costos de cierre de la FHA se pueden reducir con el uso del crédito del vendedor (hasta un 6 %). ▪ Las tarifas del prestamista y del título están sujetas al mercado Requisitos adicionales -Liquidez ▪ No se requiere preparación ▪ Debe ser en forma de efectivo líquido (cuenta corriente o de ahorros) ▪ Puede incluir depósito de garantía y crédito del vendedor para la propiedad financiada ▪ Puede provenir de fondos donados (ver a continuación) ▪ Excluidos: valor en efectivo de seguros de vida, activos de jubilación, activos de inversión, planes de pensión del empleador, activos no líquidos -Fondos donados ▪ Se debe proporcionar un extracto bancario del otorgante que demuestre el monto donado

Mínimos de Puntuación Crediticia -Puntuación crediticia mínima: 600 -Puntuación crediticia mínima para autónomos: 660 -Puntuación crediticia mínima para clientes que actualmente poseen una vivienda y la conservan: 660 -Puntuación crediticia mínima para viviendas con precios de $750,000 o más: 700 No se permiten puntajes con los siguientes requisitos (incluye prestatario autónomo con ITIN sin puntaje): - Verificación de 1 línea de crédito activa y vigente abierta durante al menos 12 meses en el informe crediticio o suplemento crediticio ▪ Para estar activa y al día, la fecha del último pago debe estar dentro de los 90 días posteriores a la fecha en que se extrajo el crédito o - Verificación de 1 servicio público actual pagado a tiempo durante 12 meses ▪ Las formas aceptadas de líneas de crédito de servicios públicos incluyen: seguro de automóvil, Internet, teléfono celular, electricidad, agua, alcantarillado, basura y facturas de gas ▪ Se puede verificar a través de extractos bancarios, suplemento crediticio o un libro de registro de pago del historial de alquiler si se muestra como un cargo separado del cargo de alquiler • No hay quiebra activa, ejecución hipotecaria o venta corta - Se permiten quiebras, ejecuciones hipotecarias o ventas cortas con los siguientes requisitos: ▪ Elegibles al momento de la descarga o satisfacción ▪ Deben estar registrados en el informe crediticio • Se permiten gravámenes fiscales y sentencias con los siguientes requisitos: - Elegibles si se liquidan o dados de baja -Las condiciones de pago se documentan en un acuerdo • Préstamos para estudiantes -Deben estar al día y no en cobros

Se deben cumplir muchas contingencias para este préstamo o puede provocar que el préstamo no se cierre.

Elegibilidad de Ingresos Empleado W2 • Formulario W2 más reciente • 60 días de recibos de sueldo consecutivos más recientes • Los dos últimos estados de cuenta bancarios que verifiquen los depósitos Ingresos por cuenta propia, 1099 o contratista independiente • Declaraciones de impuestos del año más reciente (se requiere la declaración de impuestos de 1 año) • 1099 más reciente (si corresponde) • Pérdidas y ganancias del año actual hasta la fecha y Pérdidas y ganancias del año anterior hasta la fecha (si han pasado menos de 6 meses del año) -Preparado por un contador público certificado o por un sistema de contabilidad electrónico -No se aceptan declaraciones preparadas por uno mismo • Extractos bancarios comerciales de 3 meses -Se permiten extractos bancarios personales si se depositan ingresos 1099 -Si 2 personas figuran en los extractos bancarios personales y ambas reciben ingresos, ambas deben estar en la solicitud • Copia de la licencia comercial o verificación de que no se requiere -El prestamista verificará el registro comercial en el sitio web del Secretario de Estado cuando sea posible • Los ingresos se calculan sobre el flujo de efectivo actual de los extractos bancarios -Los depósitos de ingresos que se muestran en los extractos bancarios menos los gastos que se muestran en las pérdidas y ganancias -Se aceptan varias cuentas que reciben nuevos depósitos de ingresos y se pueden incluir en el cálculo del ingreso total -Las transferencias entre cuentas separadas se excluyen del cálculo del ingreso • Revise los ingresos Por razonabilidad, dado el tipo de trabajo • La declaración de impuestos presentada más recientemente debe mostrar los ingresos SE/1099, excepto cuando los ingresos sean nuevos desde la última declaración de impuestos y, por lo tanto, no se hayan informado en las declaraciones de impuestos Ingresos otorgados • La manutención de los hijos, la seguridad social y la jubilación son formas aceptadas de ingresos otorgados • Se debe proporcionar una carta de concesión y los dos extractos bancarios más recientes que muestren los depósitos • Los ingresos por manutención de los hijos deben continuar durante más de 3 años después de la fecha de cierre prevista para que se tengan en cuenta en la solicitud

Verificación de Renta Verificación de 12 meses de pagos puntuales de la vivienda ▪ No se aceptan recibos en efectivo ▪ No se aceptan giros postales ▪ No se aceptan alquileres pagados en efectivo debido a su incapacidad inherente para ser verificados -Si se paga electrónicamente, proporcione un libro de pagos del cliente de un sistema de administración de propiedades en línea verificable. Si el libro de pagos no cumple con los estándares del prestamista, aún se pueden solicitar extractos bancarios. ▪ Se aceptan registros de los siguientes sistemas de administración de propiedades (pero no se limitan a): Rent Manager, AppFolio, Yardi, Landlord Studio, Propertyware, OneSite ▪ No se aceptan registros de QuickBooks ni Stessa ▪ El prestamista puede solicitar la verificación del sistema si no está claro en el registro -Si no se paga electrónicamente, proporcione 12 meses de extractos bancarios (esto incluye pagos realizados con cheque o proveedores de transferencia móvil como Zelle, Venmo, etc.) -Se aceptan VOR/suplementos de crédito + 3 meses de extractos bancarios que verifiquen los pagos según el -Puntaje de crédito de más de 700: requiere un pago inicial del 5 % -Puntaje de crédito de menos de 700: no se incluye el puntaje: requiere un pago inicial del 10 % Historial de pago de 12 meses al día/a tiempo -Sin antecedentes de pagos atrasados, cobros u otras violaciones de alquiler en los últimos 12 meses -Sin desalojos en los últimos 24 meses -Sin cobros de vivienda o servicios públicos sin resolver -El pago de la vivienda debe estar documentado cambiando de manos/transfiriendo a otra parte -El alquiler del lote es una forma aceptada de historial de alquiler, pero se requiere un pago inicial del 5 % si se conserva una casa móvil o un remolque y se aplican pautas de impacto de alquiler según el monto

RENOVATION/REHAB LOAN

A government renovation loan is a type of home financing program designed to help buyers purchase or refinance a home and include the costs of renovations or repairs in a single loan. These loans are backed by government agencies like the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA), making them accessible to a wide range of buyers. Here's a buyer-friendly explanation:

How it Works:

Instead of getting separate financing for the home purchase and the renovations, you combine both costs into one loan.
The loan amount is based on the home's "after-renovation" value, which means the projected value of the home after the improvements are completed.

This product is available for

-FHA

-VA

-CONVENTIONAL

Down Payment Options FHA - 3.5% Down payment VA - 0% Down Payment CONV - 3% Down Payment for first time home buyers, 5% Down payment for new primary.

Credit Scores FHA - 640 FICO or higher, 45% DTI CONV - 700 FICO or above, 49% DTI VA - 580 FICO or above, 50% DTI

Funding fee FHA - Subject to monthly PMI CONV - If less than 20% down, subject to Mortgage Insurance VA - subject to funding fee unless exempt due to disability.

Appraisals Establishing Value: · An After Improved Value and an Adjusted As-Is Value of the Property must be determined. If both an As-Is and After Improved Value are required, the case will require two separate appraisal reports. · The appraisal must include a finalized copy of the plans, specs, contractor’s bid and WWU. The WWU is required for Standard 203(k) only. · Any appraiser required or recommended repairs must be added to the plans and specs. · Following completion of the renovation work, the borrower must obtain a certification of completion stating that the renovation was completed in accordance with the submitted plans and specs. The certification must be documented on the Appraisal Update and/or Completion Report (Form 1004D). After Improved Value is established using an appraisal of the property subject to the repairs and improvements and must include the following: Standard 203(k): The appraiser must be provided with a finalized copy of the Consultant’s WWU and contractor’s bid/specification of repairs. Limited 203(k): The appraiser must be provided a finalized work plan and contractor’s bid/specification of repairs. What You Can Use It For: Updating Kitchens or Bathrooms Repairing Structural Issues (e.g., roof, foundation) Improving Energy Efficiency (e.g., windows, HVAC) Adding Rooms or Expanding Space Addressing Safety or Code Issues