Questions about mortgage loans, page 2

Yes. The regulation lets the loan reach the lesser of the appraised value plus the upfront guarantee fee or the price plus allowable costs, so the minimum down payment is 0%. You still pay closing costs, except those that can go into the loan or that the seller pays.

For fiscal year 2027 (October 1, 2026 to September 30, 2027), the upfront guarantee fee is 1% and the annual fee is 0.35%, on purchases and refinances. The upfront fee can be added to the loan, and the annual fee is charged in your monthly payment.

It is your area's 'moderate income': the greatest of 115% of U.S. median family income and two other figures that depend on your state, your area and your household size. The income of everyone living in the home counts, with some deductions. USDA's eligibility site gives you an idea; your lender does the final math.

Check the address on USDA's eligibility site, in the property section. USDA only guarantees loans in areas Rural Development designates as rural, and that designation can change; if it does, existing commitments are honored.

The regulation requires evidence that you are a citizen, a non-citizen national or a 'qualified alien.' That category is defined in federal law and includes, among others, permanent residents, asylees and refugees. If you are not sure which category you fall in, an attorney or an accredited representative can guide you. Rules can change: check the verification date.

The regulation requires a verifiable credit history and an acceptable score, without setting one number for everyone. A score of 680 or higher counts as a compensating factor if your payments exceed the 29% and 41% caps. If you have no history, other methods can be used, such as a non-traditional credit report.

Only if you meet several conditions: your current home no longer meets your family's needs, you will live in the new one, you lack the resources to buy without the guarantee, you keep no more than one other home and you can afford both.

Not with a USDA guaranteed loan. The regulation rules out land or buildings used principally to produce income, and property used primarily for agriculture or a business. The lot must be typical in size for the area.

Not today. HUD Mortgagee Letter 2025-09 eliminated eligibility for non-permanent residents for case numbers assigned on or after May 25, 2025. Citizens, permanent residents and citizens of Micronesia, the Marshall Islands and Palau remain eligible.

Fannie Mae's rule accepts lawful non-permanent residents on the same terms as citizens. But it does not say which documents prove legal presence: each lender decides, case by case. That is why it makes sense to ask several, in writing, before you apply.

Fannie Mae does not set a list: the lender uses the documentation it deems appropriate for your status. It must also confirm your identity, require a Social Security number or an ITIN and verify your employment and income the same way as for a citizen. Bring your current work permit and ask what else it needs.

The law requires the government to review each designation at least 60 days before it ends and to publish its decision in the Federal Register. If a designation ends, the termination cannot take effect earlier than 60 days after it is published. Look up your country's notice in the Federal Register and, if you have questions, ask an accredited representative.

USDA requires being a citizen, a non-citizen national or a 'qualified alien,' and the law puts someone paroled for a period of at least one year on that list. USDA also only guarantees loans in areas it designates as rural. If you are not sure whether your parole qualifies, ask an accredited representative.

Regulation B allows a lender to take your immigration status into account, and Fannie Mae requires your income to be reasonably expected to continue. In Illinois, the Department of Human Rights treats refusing to rent to someone because their status has an expiration date as discrimination. Ask each lender, before you apply, how it treats your permit's date.

Fannie Mae requires a valid Social Security number or an ITIN for each borrower. The Social Security regulation allows a number to be assigned to someone with legal authorization to work in the United States.

That is a question for a representative accredited by the Department of Justice or an immigration lawyer, not for a lender or this site. A notario cannot give legal advice.

It is a loan for homeowners 62 and older that uses the home as security. You make no monthly payments: interest and fees are added to the balance each month, and the loan is repaid when you no longer live in the home, usually by selling it. The title stays in your name.

The CFPB says that failing to pay property taxes or homeowners insurance may lead to foreclosure. That is why the regulation requires you to pay those charges, maintain the home and live in it. If you are struggling to pay them, the CFPB suggests getting help right away from a reverse mortgage counselor.

Not personally: the regulation says the borrower has no personal liability for the balance and the lender can collect only through sale of the home. If the balance is more than the home's value, your heirs don't have to pay more than 95 percent of the appraised value. If they want to keep the home, they must pay the full balance.

If they meet HUD's conditions (married to you at closing, named as an eligible non-borrowing spouse and living in the home), they can stay after your death without paying the balance, as long as within 90 days they establish a legal right to stay and keep meeting the loan's obligations. If they don't meet those conditions at closing, the loan becomes due when you die.

Yes. HUD's regulation says the borrower, any non-borrowing spouse and any other owner must receive counseling from an approved HECM counselor, and the counselor gives you a certificate for the lender. To find one, HUD points to its counselor roster or (800) 569-4287.

According to HUD, it depends on the age of the youngest borrower (or eligible non-borrowing spouse), the interest rate and the lesser of the appraised value, the HECM FHA limit and the sales price. You can take it as monthly payments, a line of credit, a combination of both or, with a fixed rate only, a single lump sum.

With most reverse mortgages, yes: you have three business days after closing to cancel for any reason without penalty, by notifying the lender in writing. The CFPB suggests sending the letter by certified mail with a return receipt. The lender has 20 days to return what you paid.

It depends on your numbers. VA suggests dividing your closing costs by how much you expect to save each month to see whether it is worth it. For IRRRLs, the law requires those costs to be recouped within 36 months through lower payments. A HUD-approved housing counselor can review your situation, often for free.

You pay closing costs again, and VA says they can add up to thousands of dollars. Your real figure is on the Loan Estimate, which the lender must give you within three business days of your application. A loan advertised as no-cost covers those costs with a higher rate or by adding them to the loan.

It is a refinance with less paperwork for people who already have an FHA or VA loan. In a non-credit qualifying FHA streamline, your credit is not analyzed and no appraisal is ordered; with a VA IRRRL, you refinance your VA loan to lower the rate or switch to a fixed rate. Both require a net benefit to you and a minimum time since the previous loan.

For most refinances, yes: you have three business days (Saturdays count) after you sign, receive the Closing Disclosure and receive two copies of the notice of your right to cancel. You must notify the lender in writing. If you refinance with the same lender without borrowing more, you do not have this right.

It depends on the program. For an FHA streamline, at least 210 days must have passed since the old loan closed and six months since its first payment. For a VA IRRRL, the law requires six consecutive monthly payments and 210 days since the first payment. For an FHA cash-out refinance, at least six months of payments.

Yes, with a cash-out refinance. With FHA, the loan cannot exceed 80 percent of the home's adjusted value. Your debt grows: VA says to understand how the new loan amount relates to your home's value.

You may need approval from the HELOC lender to refinance your first mortgage. According to the CFPB, that lender can refuse, and then you may need to pay off the HELOC first.

Fannie Mae's Selling Guide accepts a valid Social Security number or an ITIN, plus documented legal residency, and buys loans to lawful permanent and non-permanent residents on the same terms as citizens. The lender decides which documents it accepts, so the answer depends on your case and on each lender. Your credit, income and home value also count.

For case numbers assigned on or after May 25, 2025, FHA accepts only citizens, lawful permanent residents and citizens of Micronesia, the Marshall Islands and Palau, and each borrower must show a valid Social Security number. A Social Security card alone does not prove status. Rules can change: check the verification date.

According to the IRS, you cannot have both. Stop using the ITIN, use your Social Security number for taxes, and tell the IRS by letter or at a local office so it combines all your tax records under your new number.

Not all mortgages have one; if yours does, you agreed to it at closing and it is in your note. Regulation Z allows a penalty only on certain fixed-rate qualified mortgages, and even then it cannot exceed 2% of the balance in the first two years or 1% in the third, or apply after three years. If you are not sure, ask your loan servicer.

With a Fannie Mae conventional loan, a cash-out refinance requires your current mortgage to be at least 12 months old and you to have been on title for at least six months. With FHA, you must have lived in the home for the previous 12 months, paid on time and stay at or below 80% of the value. Without cash-out, Fannie Mae limits the cash you receive to the greater of 1% of the loan or $2,000.

On most refinances you have three business days to cancel, counting Saturdays but not Sundays or holidays. You must give notice in writing. It does not apply if you refinance with the same lender and borrow no additional money. If you cancel, you still owe your original loan.

It depends on the rate, the closing costs, any penalty you have and how long you plan to stay. The CFPB recommends getting Loan Estimates from at least three lenders and comparing the APR. A loan advertised as no-cost covers those costs with a higher rate or by adding them to the loan.

Only an attorney or an accredited representative can give you legal advice about your immigration case; notarios and consultants cannot. For the refinance numbers, a HUD-approved housing counselor gives independent advice, often free or at low cost.

It is a loan that meets federal requirements that make it less risky: no interest-only period, no growing balance, no balloon payment (with exceptions for small lenders), a term of up to 30 years, limits on the APR and on points and fees, and your income and debts verified. If your loan is a QM, it is assumed that the lender followed the ability-to-repay rule.

It is a mortgage that does not meet the requirements of a qualified mortgage. It is allowed: the CFPB says lenders are not required to make only qualified mortgages. But most lenders still have to determine in good faith that you can repay the loan.

It is a loan where the lender calculates your income from your bank statements instead of your tax returns. Regulation Z allows verifying income with financial institution records. Fannie Mae's rules for self-employment income, by contrast, are based on your signed tax returns or IRS transcripts. Always ask whether the offer is a qualified mortgage.

Yes. According to the CFPB, all government-backed loans (FHA, USDA and VA) are qualified mortgages. Conventional and jumbo loans must meet special requirements to be QMs.

On a loan covered by the rule, only if it is a qualified mortgage with an APR that cannot go up, it is not higher-priced, and the law otherwise allows it. Even then, the penalty cannot apply after three years or exceed 2% of the balance prepaid in the first two years or 1% in the third. Check the "Prepayment Penalty" line on your Loan Estimate.

On a qualified mortgage of $100,000 or more (an amount adjusted for inflation), points and fees cannot exceed 3% of the loan. Outside qualified mortgages there is no such cap: the CFPB says lenders can charge more if they choose. Compare section A of each Loan Estimate.

Yes, a few. The CFPB lists Community Development Financial Institutions (CDFIs), state housing finance agencies, certain down payment assistance providers and nonprofits that lend rarely and only to low- or moderate-income borrowers, which must follow their own written procedures.

Get a Loan Estimate for each one: every lender uses the same form and must give it to you within three business days of your application. Compare the rate, the APR, the points and fees, and the "Loan Terms" table, which says whether there is a prepayment penalty, a balloon payment or payments that can go up. The CFPB recommends getting at least three offers in writing.

It is a loan larger than the conforming loan limit, that is, larger than what Fannie Mae and Freddie Mac can buy by law. According to the CFPB, rules for a jumbo vary by lender, but you usually need good credit and a high down payment.

For a one-unit home it is $832,750 in most counties, and in high-cost areas it can go up to $1,299,500. The law sets higher limits for two- to four-unit homes, and all of them change every year. Find your county's limit on the conforming loan limits page.

It depends on the county: in our data it ranges from $541,287 to $1,299,500 for a one-unit home. The law sets it from the area's median home price, with a national floor and ceiling. Look it up on the FHA loan limits page or your county's page.

To the loan. FHFA refers to the loan's origination balance and Fannie Mae to the original loan amount. With FHA, the upfront mortgage insurance premium is not counted against the limit, and the maximum loan is the lesser of the limit or a percentage of the home's value.

Because the law ties it to home prices. The conforming limit is adjusted on January 1 each year based on FHFA's house price index (if prices fall, there is no adjustment), and FHA publishes new limits for each calendar year.

Yes, if it meets the requirements. The CFPB explains that government loans are always qualified mortgages, while conventional and jumbo loans must meet special requirements to qualify. Ask the lender, and see the non-QM loans guide.

If you have full entitlement, VA says you have no loan limit, as long as you can afford the loan and the appraisal supports the price; the lender still has to approve you. If you have used part of your entitlement, what remains is based on the county limit, which is the same as FHFA's.

The law sets higher conforming limits for 2-, 3- and 4-family homes, and Fannie Mae says its limits vary with the number of units. FHA law also sets different limits for 2-, 3- and 4-family homes. Check your county's limit for the number of units you are buying.

It depends on what you need the money for, your current rate and how long you expect to take to repay it. The CFPB says a HELOC lets you draw and repay over years, almost always at a variable rate, and that a cash-out refinance leaves you with one payment but usually higher closing costs. A HUD-approved housing counselor can review your situation, often for free.

The CFPB says yes: if you fall behind or can't repay on schedule, you could lose your home, because it is the collateral. That is why it recommends considering a HELOC only if you are confident you can keep up with the payments.

When the draw period ends, repayment begins, and according to the CFPB monthly payments are often significantly higher. In some cases you must repay everything at once. And the rate is usually variable, so the payment can change from month to month.

Yes, in certain cases. Under Regulation Z, the lender may stop extending credit or lower your limit if your home's value drops significantly below the appraisal, if it believes you can't pay because of a material change in your finances, or if you default on the agreement.

Yes. You have three business days to cancel the line when it is opened, by notifying the lender in writing. The lender must return the fees you paid, including application and appraisal fees.

According to IRS Publication 936, you can no longer deduct interest on a loan secured by your home to the extent the money was not used to buy, build or substantially improve the home, and you must itemize to deduct it. If you want help with your return, you can look for an IRS VITA site.

No. According to the CFPB, for a HELOC you receive Truth-in-Lending disclosures instead of a Loan Estimate. A cash-out refinance does come with a Loan Estimate.

Yes. HUD says a borrower with lawful permanent resident status may be eligible for FHA under the same requirements, terms and conditions as a citizen. The file must include evidence of your permanent residence, and a Social Security card alone is not enough to prove status.

Under FHA and Fannie Mae rules, no: the same terms apply as for a citizen. The FHA minimum down payment is 3.5% with a score of 580 or more, and Fannie Mae's HomeReady can start at 3% if you meet the income limit. Each lender may have its own additional requirements: compare.

The regulation asks you to apply for a replacement card when it will expire within six months. HUD requires evidence of your permanent residence and Fannie Mae leaves it to the lender to decide which documents it accepts. Ask each lender which evidence it accepts if your card is about to expire or is being replaced.

The law says that residence is obtained on a conditional basis and that the petition to remove the conditions is filed in the 90 days before the second anniversary; if it is not filed, residence ends on that date. Ask each lender how it treats a conditional card, and for questions about your case talk to an accredited representative or a lawyer.

For USDA, a permanent resident is a 'qualified alien,' so the status rule is met; the home must be in an area USDA designates as rural. A VA loan depends on qualifying for its Certificate of Eligibility (COE), and it often requires no down payment.

Yes. Regulation B allows a lender to ask about your permanent residency and immigration status, and to take them into account. What it may not do is discriminate against you because of your national origin.

According to the IRS, if you are a lawful permanent resident at any time during the year, you are a resident for federal tax purposes. The CFPB recommends having your signed federal tax returns for the last two years on hand before you talk to lenders.

HUD requires a minimum investment of 3.5% of the home's value if your score is 580 or higher. With a score from 500 to 579, the loan cannot exceed 90% of the value, so you put down at least 10%. On a $332,700 home, the typical US value, 3.5% comes to $11,645, plus closing costs.

Under HUD's handbook, at 580 or higher you can get maximum financing; from 500 to 579, up to 90% of the value; and below 500 you are not eligible. If you have no credit score, you can still get maximum financing, but your loan is underwritten manually.

It depends on your down payment. On a loan of more than 15 years, if you put 10% or more down, the annual premium lasts 11 years; if you put down less, it lasts for the life of the loan. The CFPB says FHA rules differ from PMI rules and that questions about your FHA insurance go to your loan servicer.

For case numbers assigned on or after May 25, 2025, HUD eliminated eligibility for non-permanent residents. Citizens, permanent residents and citizens of Micronesia, the Marshall Islands and Palau can qualify, and each borrower must show a valid Social Security number. The ITIN mortgage guide explains other options. Rules can change: check the verification date.

It depends on your county. The law sets the limit from each area's median home price, and HUD publishes new limits every year. In our data, the limit for a one-unit home ranges from $541,287 to $1,299,500; look up your county on our FHA loan limits page.

Yes, if the building has four units or fewer, you buy the whole building and you live in one of the units. Limits are higher for multi-unit homes. At least one borrower must move in within 60 days of signing and live there for at least one year.

Yes, up to a point. The seller, agents and other interested parties can contribute up to 6% of the sales price toward your closing costs, prepaids and points. Anything above that cap counts as an inducement, and none of it can go toward your minimum investment.

Yes. HUD accepts gifts from a family member, your employer or union, a close friend with a documented interest, a charity or a government homeownership program. It is money you do not repay; the gift money guide explains the paperwork.

Not today. HUD Mortgagee Letter 2025-09 eliminated eligibility for non-permanent residents for case numbers assigned on or after May 25, 2025. Citizens, permanent residents and citizens of Micronesia, the Marshall Islands and Palau remain eligible. Between 2021 and 2025, FHA did accept DACA recipients with a current work permit.

Fannie Mae's rule allows it if you are a lawful non-permanent resident: it buys those loans on the same terms as for citizens. But Fannie Mae does not say which documents prove legal presence; each lender decides. That is why one lender may say yes and another no. Ask in writing before you apply.

Fannie Mae requires each borrower to have a valid Social Security number or an ITIN. The Social Security regulation allows a number to be assigned to someone with legal authorization to work in the United States. For FHA, HUD also says a Social Security card alone is not enough to prove immigration status.

DACA and its work permit are granted for 2-year periods. Fannie Mae requires your income to be stable and reasonably expected to continue, and noncitizens face the same employment and income verification as citizens. How each lender treats a pending renewal is something to ask directly, before you apply.

Yes. Regulation B allows a creditor to ask about your immigration status and take it into account. What it may not do is discriminate against you because of your national origin, meaning the country where you were born or where your ancestors came from.

USDA requires being a citizen, a non-citizen national or a 'qualified alien.' The law defines that list: permanent residents, asylees, refugees, people paroled for at least one year and other categories. If you are not sure whether your status fits, that is an immigration question for an accredited representative or a lawyer.

That is an immigration question neither a lender nor this site can answer. You can ask a representative accredited by the Department of Justice or an immigration lawyer; never a notario, who cannot give legal advice.

It depends on the program and the lender. Fannie Mae's HomeReady and Freddie Mac's Home Possible allow as little as 3% if you meet the income limit. On a $332,700 home, the typical US value, that is $9,981. With less than 20% down you pay private mortgage insurance (PMI).

If the loan is underwritten by hand, Fannie Mae requires at least 620 on a fixed-rate loan and 640 on an adjustable-rate loan. If it goes through its automated system (DU), there is no fixed minimum: the system weighs your risk using several factors. Your score also affects the loan's price.

By law, you can ask in writing to cancel it when your balance reaches 80% of the home's original value, if you have a good payment history, are current, have no second mortgage and the home has not lost value. It ends on its own when the scheduled balance reaches 78%, if you are current, and no later than the midpoint of the loan. The first date you can ask is on the PMI notice you got at closing.

It is a Fannie Mae conventional mortgage for people whose income is no more than 80% of the area median income where the home is. It can finance up to 97% of the value on a one-unit home, with a fixed rate for up to 30 years. If everyone who will live in the home is a first-time buyer, it requires a homebuyer education course.

Fannie Mae's Selling Guide accepts a valid Social Security number or an ITIN, plus documented legal residency, and buys loans to lawful permanent and non-permanent residents on the same terms as citizens. The lender decides which residency documents it accepts, and not every lender offers this. The ITIN mortgage guide explains how to ask.

Yes. On a principal residence, Fannie Mae accepts gifts from relatives and from people with a familial relationship, such as your partner or fiancé. On a one-unit home you do not have to put in any of your own money: all of it can be a gift. The donor signs a gift letter saying no repayment is expected.

There is no answer for everyone. The CFPB says conventional loans typically cost less than FHA loans but can be harder to get, and that PMI is generally cheaper than FHA insurance for borrowers with good credit. PMI also ends by law, while FHA insurance with less than 10% down lasts the life of the loan. Get Loan Estimates for both and compare.

It is a loan above the conforming limit, the most Fannie Mae and Freddie Mac can buy. The CFPB says jumbo rules vary by lender but usually require good credit and a high down payment.