Guaranteed Rural Housing Development Loans (aka RD Loans, aka USDA Residential Loans)
These are loans that are guaranteed by USDA. Geographic eligibility applies; property eligibility can be verified by checking property on USDA website and is limited to 1 unit properties (single family homes, PUDs and Condos). Household income limits apply.
Financing is to max 100% LTV. The USDA Guarantee fee is 3.5% of base loan amount and is typically financed into the loan (in a manner similar to the VA funding feel financed into VA loans or the UFMIP financed into FHA loans). There is no monthly mortgage insurance.
USDA Eligibility Website
Seller Assist is limited to 6% LTV of appraisal value or sale price (whichever is lower) and seller assist cannot exceed actual settlement costs (sum of one time settlement costs, prepaids, and lender escrows). Seller assist can be used to pay the USDA Guarantee fee (if it is not financed into the loan).
Community Development Mortgage Program Loans (aka CDMP loans)
CDMP loans are a specialized program offered by Prosperity Mortgage and WFHM as part of meeting CRA lending requirements. Program contains income limits derived from HUD median income records, as well as minimum credit standards and maximum debt-to- income ratios. There is no monthly or upfront mortgage insurance requirement.
Minimum down payment is based on market classifications by county, and will vary between 2% to 4% minimum down payment. Seller Assist is maximum 3% towards buyer’s settlement costs.
FANNIE MAE HOMEPATH LOAN PRODUCT
This is a program specific to Fannie Mae REO properties. To locate eligible properties, check Homepath.com . Properties not listed as eligible on this website are not eligible for the HomePath program, (even if they are Fannie Mae REO).
This loan program generally conforms to the standard LTVs of regular conforming loans with 2 notable exceptions.
1) Owner occupied 1 unit primary residence may be up to 97%LTV with no PMI.
2) Non owner occupied (investor) 1 unit may be up to 90%LTV with no PMI.
Appraisal waivers are sometimes offered. Max seller assist, set by Fannie; usually 3.5%.
Pennsylvania Housing Finance Authority (PHFA) (aka PA Bond Loans)
PHFA loans are a type of bond loan originated by lender to PHFA requirements and released to PHFA post closing for servicing. PHFA bundles and issues these as tax exempt bonds subject to certain IRS requirements. Borrower household income limits (and sometimes asset limits) apply. The factor that determines PHFA loans, as far as minimum down payment and maximum seller assist, is determined by the insurer of the loan. PHFA loans can be insured by FHA, VA, or USDA, provided they meet the underwriting requirements of the insuring entity.
On these loans, the insuring entity’s requirements determine the min down payment and max assist (a PHFA loan insured by FHA would have minimum 3.5% down payment, and max 6% seller assist, with MIP costs the same as regular FHA loans). PHFA loans not insured by FHA, VA, or USDA, are a subtype of conventional, known as PHFA conventional loans. If financing more than 80%LTV, the conventional PHFA loans are insured by a sister organization called PHIF. Max financing is 95% if credit score 659 or lower, and max 97% financing if credit score is 660 or higher. Max assist on conventional PHFA loans is 3%.
Please note, PHFA loans contain different requirements depending on specifics of the program. Details can be found at PHFA.ORG. Prosperity is a participating lender in the majority of PHFA purchase mortgage products.
CLOSING COST ASSISTANCE PROGRAMS and DOWN PAYMENT ASSISTANCE PROGRAMS (aka DAPs)
Collectively referred to as DAPs, these constitute a variety of funding from various community based programs (at the township, county, state, and federal levels) and can also include certain non-profit organizations. DAPs will vary on the particulars for borrower eligibility, property eligibility, and use. Most will manifest as a grant or subordinate financing. We are happy to work with any borrowers and/or agents interested in DAP programs, but please realize effective use of DAPs involves upfront planning and accuracy. DAPs from bona fide community and non-profit sources are generally eligible subject to underwriting criteria. DAPs that fund seller money towards buyers in lieu of actual down payment (such as Nehemiah) are generally prohibited.