Tennessee Valley Realty Associates



Below is a list of common home loans utilized in today's market and the main features of each.

  • Conventional Loan
    Loans not guaranteed or insured by government agencies are known as conventional loans.  These loans adhere to Fannie Mae guidelines.  Fannie Mae, or Federal National Mortgage Association, is a corporation created by the federal government that buys and sells conventional mortgages. It sets the maximum loan amount and requirements for borrowers. Usually, a conventional loan is a 30-year fixed rate mortgage.  That means it has a fixed interest rate for the 30 year term of the loan.  Conventional loans also typically require at least a 20 percent down payment.  For example, if a house costs $200,000, the lender will provide a loan for 80 percent of that amount.  So, $160,00 is financed through the lender and the borrower must pay $40,000 cash. Conventional loans can have better interest rates than non-conventional loans and can be a great option for those with a 20 percent down payment.  However, even if the borrower does not have a 20 percent down payment, it is still possible to get a mortgage.  By putting less down and accepting a possibly higher interest rate, the borrower can still get financing through a non-conventional loan.
    Click Here for a  Quick and Easy Conventional Home Loan Quote.
  • Freddie Mac Homesteps
    This program is only for the purchase of Freddie Mac's HomeSteps homes. Not all properties listed on homesteps.com are eligible for HomeSteps Financing. To determine if a home is eligible for HomeSteps Financing, please contact us. All loans are subject to lender requirements and credit approval. A minimum 5% down-payment and closing within 45 days of escrow is required. Program subject to change without notice. For complete mortgage terms, conditions, and qualification requirements, you must contact one of our approved HomeSteps Financing lenders. Homesteps financing is availablie in Alabama, Florida, Georgia, Illinois, Kentucky, North Carolina, South Carolina, Tennessee, Texas and Virginia. HomeSteps Financing does not require mortgage insurance, so you may save on your house payment each month. HomeSteps Financing does not require an appraisal at origination, which may mean savings for you when you close on your new home. Put down a little as 5% when using HomeSteps Financing.
    Click Here to recieve more Home Steps Home Loan Info.
  • Fannie Mae HomePath
    HomePath financing, available only on Fannie Mae-owned properties, offers great benefits — a 5% down payment (as of November 16, 2013), no mortgage insurance, expanded seller contributions, and more. HomePath Mortgage is available for move-in ready properties for both owner occupants and investors — a limited number of HomePath lenders also now offer HomePath Mortgage for the LLC borrower. The HomePath Renovation Mortgage provides both the funds to purchase and to renovate in one loan.
    Click Here to request a free Home Path Home Loan Quote.


  • Jumbo Loan
    A jumbo loan is a loan with a loan amount larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Currently the limit is set at $417,000 for most areas. Special areas such as Alaska, Hawaii, Guam, and the U.S. Virgin Islands have a higher limit of $625,000. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate; usually .25% to .50% higher than that of a conforming loan.
    Click Here to Receive More Info about Jumbo Loans in Our Market.
     A mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). FHA loans are designed for low to moderate income borrowers who are unable to make a large down payment. FHA loans currently allow the borrower to borrow up to 96.5% of the value of the home. The 3.5% down payment requirement can come from a gift or a grant, which makes FHA loans popular with first-time buyers. A loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans, they are generous enough to handle moderate-priced homes almost anywhere in the country. FHA home loans require a fee paid at closing or a portion of this fee added to each monthly payment of an FHA loan to insure the loan with FHA. In addition, FHA mortgage insurance is applied to the monthly payment.
    Click Here for a free FHA Home Loan Quote.
  • FHA 203B w/ Repair Escrow

    An FHA repair escrow allows a borrower to purchase a home that needs repairs using a mortgage. Lenders typically will not issue a mortgage for a home that needs repairs, but the FHA, or Federal Housing Administration, has created a repair escrow program for mortgages that is designed for the buying and repair of a property at the same time. The repair funds are put into a separate account and used as needed while the work is completed.

    The house the repair escrow is for must not need more than $5,000 in exterior or interior repairs, and the repairs must be started within 90 days of the loan finalization and completed within one year, according to the U.S. Department of Housing and Urban Development (HUD). The 90-day period is extended, at the discretion of HUD, for homes that need exterior repairs but are in an area experiencing inclement weather conditions. If the house is owned by HUD or a lender, an amount equal to 110 percent of the repair estimation can be put into the escrow. For other properties, the maximum escrow amount is 150 percent of the repair estimates.

    HUD requires the loan underwriter to receive a specific set of documents prior to the loan closing to establish a repair escrow. Two bids from licensed contractors which clearly line itemize all repairs and the cost for each are needed, as well as a copy of the contractor's license and a report from an FHA inspector detailing the work that is necessary. The loan underwriter must determine the minimum escrow amount. HUD requires the amount to be either $500 or 150 percent of the repair cost, whichever figure is higher, as per HUD. The party responsible for the money to be deposited into the account -- the buyer or the seller -- has to be clearly identified by the underwriter on the escrow documents. Once the work is completed, the lender must receive an inspection report certifying the defect has been properly repaired and any open invoices for the work.

    Repair escrows are not allowed for certain types of work, even if the repair expense is under $5,000. Any work that is necessary for the home to be habitable is not permitted, because the home must be habitable for the initial loan to be approved. Roof, foundation and repairs to the home's basic structure cannot be included in a repair escrow, as well as a system for electricity, plumbing or the delivery of heating fuel, per HUD.
  • FHA 203K
    The 203K loan is a type of FHA loan. It can be used for an entirei rehabilitation of a property or just a few select repairs. There are actually 2 types of FHA 203K loans, one is refered to as a streamline FHA 203K and is for rehab costs that are less than $35,000 and have a few limitations that a full blown 203K does not. It is used primarily say if you wanted to replace the roof and maybe get new appliances for instance. A fuill 203K is for a more complex rehab and requires an FHA consultant to review the property and write up a work order. The rehab costs are paid to the contractor the same way a construction loan is set up. Once pre-determined goals are met then the property is inspected for compliance and approval. Once the approval is made then funds are released to the contractor for that portion oof the work. Generally speaking the most inspections are 5 for a major rehab. At the loan settlement no funds are released fro the actual rehab so you should work with a contractor who is familier with the process and understands they will not receive any funds upfront. 
    Once the rehab is complete any leftover funds  if any will be applied to the back end of your loan. This is a great loan product but does entail coordination on the part of loan officer, home buyer, contractor, FHA consultant and real estate agent. All parties wroking proactivlly results in a successful completion of the project. Although FHA does not require it, all lenders require you to use a contractor unless you are in the business and can clearly show the knowledge and ability required to complete the work and get required permits.  
  • VA Loan

    A mortgage loan made by an approved lender and guaranteed by the Department of Veterans Affairs. They are made available to eligible veterans, those currently serving in the military, and, in some case, their spouses. A VA loan differs somewhat from a standard mortgage. Even though it is provided through a private lender, the federal government guarantees a portion of the principal. That means that the Department of Veterans Affairs backs the loan, so if the borrower defaults on it, the lender is protected. Borrowers who are eligible for a VA loan are permitted to have a small, or sometimes non-existent, down payment and still get a mortgage. This is the biggest advantage of a VA loan. Be sure to ask your lender what its down payment requirements are when requesting a VA loan.

    Some of the requirements for a VA loan are standard, as with any loan: good credit, enough funds for payments, etc. Another is that you must be eligible though your affiliation with the military. To see a full list of eligibility requirements, visit the Department of Veterans Affairs website at www.homeloans.va.gov. This site also answers many specific questions about the program. When requesting a VA loan, you need a certificate of eligibility to show the lender. You can get this certificate through the Department of Veterans Affairs. Upon providing it to the lender, the lender can then help you. Click Here to request a copy of your Certificate of Eligibility or for "DD Form 214" to apply for your VA Loan.

  • USDA Rural Development Loan

    Since 1991, the U.S. Department of Agriculture (USDA) has offered rural development loans for homebuyers. This is provided that the homebuyers are willing to relocate in rural areas or currently live in a qualifying area considered rural / suburban. The USDA does this to encourage growth in rural parts of the country where other agencies, like the Federal Housing Administration (FHA), aren't as active.

    For borrowers that meet USDA Rural Development loan requirements, they offer many benefits paired with relatively lenient approval requirements. With competitive interest rates and a minimal down payment, USDA Rural Development loans are great for borrowers living away or planning to move from major metropolitan areas. USDA Rural Development loans have maximum borrower income limits factored for the entire household. Contact one of our USDA Rural Development lenders for specific income limits. USDA RD loans may finance all of the purchase price and closing costs is some cases.




Home Loan Center

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