Loan Officer 101 – For Real Estate Agents Welcome to Loan Officer 101 for real estate agents! Today, we’re diving into what lenders look for when qualifying buyers and the basics of many loan products available. Not every buyer fits perfectly into one box, so it's essential to understand how Fannie Mae, Freddie Mac, FHA, and VA programs each help your clients in different ways. Conventional Loans (Fannie Mae & Freddie Mac) Conventional financing allows first-time buyers to purchase with as little as 3% down, up to a maximum loan amount of $806,500 in many areas today. Debt-to-income ratios can reach 50.49%, depending on the borrower’s credit and job stability. This program is ideal for clients with solid credit and a steady income. We can go High balance in Los Angeles County to 1.209 Mil or Jumbo above that to a $5 Mil loan amount. They mostly follow Fannie guidelines. FHA Loans FHA remains a favorite among first-time buyers due to its more flexible credit requirements. The standard down payment is 3.5%, but there are also zero-down options available through programs like CalHFA and other assistance programs. FHA guidelines allow higher debt-to-income ratios, generally around 46.9% front-end and 56.9% back-end, giving more buyers a path to homeownership. VA Loans VA financing is one of the best benefits for our veterans and active-duty military. These loans require no down payment, and in some cases, we can even structure multiple zero-down loans for the same borrower. VA loans technically have no set debt-to-income limit - instead, they use "residual income" to determine qualification. This flexibility, combined with no mortgage Insurance and competitive rates, makes VA an incredible option for eligible buyers. Alternative and Non-QM Options For self-employed clients or those with non-traditional income, Non-QM programs can make a big difference. Bank statement loans allow as little as 10% down and up to 50% debt-to-income ratios, often using up to 80% of deposits with a CPA letter verifying business expenses. DSCR investor loans can start around 15% down and are based on property cash flow rather than personal income. Profit-and-loss loans usually require 20% or more down and rely on CPA-prepared P&L statements rather than tax returns. Asset-depletion loans are an excellent fit for borrowers with substantial assets but limited income. For example, $600,000 in assets can count as roughly $10,000 in qualifying income per month. Non-Warrantable Loans – Whether it is construction defects, Insurance issues, deferred maintenance, a lawsuit, or something else. We can get the job done! Equity-Based Loans Private money loans are usually for investment or business purposes. These loans typically need 35% or more down. You will definitely pay points, and the rate is not pretty. Fix-and-Flip Loans require 25% Equity after the repaired value. I have done loans for people with 10% down to fix a property and eventually flip it for a profit! I have even had a few people slide in and move into the property after! Bridge loans are a great way to get from home A to Home B! It can be a smart option for buyers who find the right property and need to make a move before their home sells! Flex Bridge Loans – Get buyers’ cash fast to improve their credit scores or their debt-to-income ratio. I do five or more of these each month, helping my buyers save money before they buy and sell! A Flex Bridge Loan can also be used for a deposit on a new home too! Reverse Mortgages For our senior clients, reverse mortgages can be a powerful tool. Homeowners 62 (we have some that go as low as 55) and older can access their home equity and eliminate monthly mortgage payments while staying in their home. It's an excellent option for retirees looking for flexibility and financial peace of mind. The takeaway is simple: there’s a loan program for almost every situation. Whether your client is a first-time buyer, an investor, or a retiree, we have options to help make homeownership or investment goals a reality. If you’d like me to run through any of these programs with your clients, reach out. I’m always happy to help you look like the hero in every deal! Oktoberfest is bringing back the Sushi truck, and we have Pizza and German food too! Please let me know if you have any questions or if a client needs my guidance. I’m just a call, text, or email away. 📞 Direct Line: 661-291-2222 – Text OK 📞 Cell: 661-714-6258 – Text OK 📞 Office: 661-260-2970 ext. 2222 – Text OK 📧 Email: Mike@AugustaFinancial.com But wait, there’s more… Interest Rates Interest rates have moved back to one-year lows, but that’s not saying much. A little more to the downside, and we can start talking about 3-year lows. LOL! Loan Programs We do loans on Non-warrantable condos! We offer 12-day escrows for pre-approved buyers, including conventional FHA/Jumbo/Bridge loans. We provide loans in all 50 states, so call me with anything you need. Government loans (FHA/VA/USDA) are in the 5s. Conventional loans up to $806,500 are in the high 5’s and low 6s. High-balance loans from $806,501 to $1,209,750 are also in the 6s. Jumbo loans above $1,209,750 are in the 6’s. ARMS in the 5’s and some in the 6’s Bank statement loans are available with 10% down again, with larger down payments in the 6’s++. Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement! 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000. Private Money lenders offer Hard Money Loans with 35% down. No-Ratio Loans require a 30% down payment. DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down. Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go! 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates! Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits. **Good News for Condos:** NONE **Bad News for Condos*** Nothing New! CONDO HELP!!! If you have a listing or a buyer interested in a specific condo and are unsure whether it is warrantable or Non-warrantable, please call me, and we can look up Fannie’s list in real-time. We don’t know when something has changed, and it would be impossible to track everything day by day, but we don’t mind looking up a few items each day. The full state of California’s naughty list has been added to: MikeMeena.com! See the link below: https://mikemeena.com/non-warrantable-condos/ Let me know if you hear anything new about condos or townhouses. I am available every day if you need anything. 📞 Direct Line: 661-291-2222 – Text OK 📞 Cell: 661-714-6258 – Text OK 📞 Office: 661-260-2970 ext. 2222 – Text OK 📧 Email: Mike@AugustaFinancial.com Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow! Mike Meena President | Loan Officer Click to Call or Text: (661) 714-6258 This entry has 0 replies Comments are closed.
