Mortgage Categories
resources:
- Conventional Loans
- Any mortgage loan other than a VA or an
FHA loan. A conventional loan may be conforming or
non-conforming.
- Government Loans
- Loans purchased or guaranteed by government organizations such as the
Government National Mortgage
Association (GNMA or GinnieMae). Ginnie Mae which is part of
HUD helps increase the supply of affordable
housing by guaranteeing securities issued by private lenders backed by pools of
residential mortgages insured by three federal agencies -- the Federal Housing
Administration (FHA), the Department of Veterans Affairs
(VA) and the Rural Housing Service.
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- Conforming Loans
- A loan that conforms to the guidelines established by
Fannie Mae or
Freddie Mac. These guidelines
establish the maximum loan amount, down payment, borrower credit & income
requirements, and suitable properties. Lenders that make loans established to
these guidelines may sell those loans to Fannie Mae or Freddie Mac. These
lenders may retain the servicing on these
loans - so that a borrower will continue to make payments to the original
lender. Conforming loans make up the majority of loans in the U.S.
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| Conforming Loan Limits
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| No. Of Units |
Contiguous States, District of Columbia and Puerto Rico |
Alaska, Hawaii & Virgin Islands |
| 1 |
$359,650 |
$539,475 |
| 2 |
$460,400 |
$690,600 |
| 3 |
$556,500 |
$834,750 |
| 4 |
$691,600 |
$1,037,400 |
Non-conforming Loans
A loan that does not conform to the guidelines established by Fannie Mae or
Freddie Mac is called a non-conforming loan. A loan that is larger than the
conforming loan limit is called a Jumbo loan. Loans that do not meet the credit
quality of conforming loans ('A' paper) are called 'B','C' and 'D' paper loans.
Second mortgage loans - credit lines, home equity loans, home improvement loans
are also non-conforming loans.
Portfolio Loans
Loans may be sold on the secondary market to
Fannie Mae,
Freddie Mac or a select number of
conduits (e.g. GE Capital) or they be kept in the banks portfolio (e.g.
American Savings Bank). Portfolio loans
may have more flexible qualifying criteria, while saleable loans have to meet
an investors criteria.
Commercial Loans
Loans programs discussed above are for 1-4 unit residential properties. For
5+ unit residential properties, office buildings, warehouses and other
commercial property refer to the 1st
Commercial Mortgage Directory.
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