[Dawn]

HUD, the parent of FHA, is the federal government giant that administers FHA loans. HUD has lenient guidelines on FHA loans. The minimum credit scores for FHA loans are as follows:

580 or higher: You can qualify for a 3.5% down payment according to the standard.

500 to 579: A 10% down payment is required.

However, additional lender-imposed minimum requirements may be known as “lender overlays.” Many people with low credit ratings prefer FHA loans because they have more relaxed qualification standards. Even though HUD sets the minimum FHA credit score requirements, each mortgage lender can have their lender overlays. Lender overlays have higher lending requirements than the minimum HUD agency mortgage guidelines. Therefore, if one lender denies you an FHA loan because of a low credit score due to their lender overlays, a different lender can approve you. Gustan Cho Associates has no lender overlays on FHA, VA, USDA, and Conventional loans.

[Dawn]

Non-QM loans maximum debt-to-income ratio cap is at 50%. Lenders of non-QM loans use alternative income to calculate debt-to-income ratio. Unlike traditional loans, non-QM (non-qualified mortgage) lenders calculate the debt-to-income ratio with flexible guidelines. Different methods can be used to do this, which include:

Bank statement loans: here, the DTI is calculated using income shown in 12-24 months of bank statements instead of tax returns or W-2 forms.

Asset-based loans: DTI may be based on liquid assets rather than monthly income.

DSCR: DSCR (debt service coverage ratio) loans are used for investment properties, and they consider rental income instead of personal income. Lenders usually have varying DTI limits depending on a person’s overall financial profile.

[Dawn]

On average, receiving a “Clear to Close” takes thirty to forty-five days after applying for a mortgage. Still, several factors can expedite or delay this. Below is a general outline of what should happen:

Application: It usually takes one to three days to complete the initial paperwork and collect necessary documents.

Processing: This phase involves document verification and home appraisal, which may take one to two weeks.

Underwriting: Conditional approval is typically granted within one or two weeks.

Clear To Close (CTC): The final review happens here, so expect it within a few days of submitting the last document. How fast you avail records and underwriting smoothness determine efficiency.

[Dawn]

Fannie Mae and Freddie Mac Automated The Systems of Underwriting (AUS).

These automated underwriting systems assess mortgage loan applications. They are called Fannie Mae’s desktop underwriter (DU) and Freddie Mac’s loan product advisor (LPA).

AUS Findings:

Approve/Eligible: This phrase indicates that the borrower meets all program requirements and that no further documents are necessary.

Refer/Eligible: A borrower qualifies under certain conditions, but higher risks may require manual underwriting.

Refer with Caution: It means that there is significant risk or non-eligibility, and it is rare for such a loan to be approved.

Significance of AUS Findings:

They help lenders determine how much documentation is required before approving loans at different levels of risk while still ensuring compliance with agency guidelines for borrowers.

[Dawn]

Which Credit Scores Do Mortgage Lenders Use?

A mortgage lender often uses the middle credit score for the three main credit reporting agencies: Experian, TransUnion, and Equifax. They appraise all three reports and then use the average number for approval.

Credit Score Use in Mortgage Applications:

When getting a joint mortgage, lenders consider both spouses’ credit scores, using the lower middle score of either applicant.

FICO Scores Needed to Buy a House:

FHA Loans: 580 (3.5% down) or 500 (10% down).

Conventional Loans: 620 or higher.

USDA/VA Loans: 620+ (varies by lender).

Gustan Cho Associates has a national reputation for being able to do FHA, VA, and USDA loans with credit scores down to 500 FICO. Gustan Cho Associates has no lender overlays on government and conventional loans.

[Dawn]

Minimum Credit Scores for USDA Loans:

Typical Minimum Score: USDA loans have no minimum credit score requirements. However, most lenders set their minimum credit score requirements as part of their lender overlays. Most lenders require a 640 credit score. 620 to 640 credit scores are generally required for most lenders to qualify for a USDA loan with approval from an automated underwriting system.

Lowest Credit Score: Some lenders may consider lower scores with manual underwriting, but it’s more challenging.

Credit Bureau Used:

USDA loans typically pull reports from all three major credit bureaus: Equifax, Experian, and TransUnion.

Credit Scoring Model:

FICO Scores (classic models like FICO Score 2, 4, or 5) are commonly used for USDA loan qualification.

[Dawn]

What Do Employers Seek for in Your Credit?

Employers can examine your credit report but not your credit score. They do this to determine your financial accountability, especially for roles that involve money management or access to confidential information. Here are some of the things they look at:

Levels of Debt: High debt levels could be risky.

Payment Timeliness: Consistently late payments may raise questions.

Public Records: Bankruptcies or liens may act as warning signs.

Impact on Recruitment Caused by Credit Score:

High Credit Rating: Implies trustworthiness and good financial management skills.

Low Credit Score: This could put employment at risk, particularly within finance-related positions.

Jobs That Are Likely To Check Your Credit:

• Financial roles such as accountants and financial analysts.
• Security-sensitive positions like government jobs requiring security clearance, such as law enforcement, intelligence, security, and jobs that require leadership and responsibility.
• Loan officers and employees of financial institutions.

Bad credit does not mean no hire. Employers use credit reports to measure reliability.

[Dawn]

I agree with my friend Danny Vesokie, the President and CEO of Affiliated Financial Partners, Inc. Hello! Witnessing such fervor to transform the world for the better is wonderful. Let’s get the scums of the scums like Barack Obama and his transgender Michael Robinson Obama, The Rothchild Family, Bill Gates, Joe Biden, Gavin Newsom, Jill Biden, Bill Clinton, Hunter Biden, Hillary Clinton, Nancy Pelosi, Tim Walz, JB Pritzker, Anthony Fauci, Tony Evers, Adam Schiff, and Kamala Harris. They all belong to Guantanamo Bay for Military Tribunals for crimes against humanity. Revitalizing localities, upholding fairness, and resisting wrongs are among vital undertakings. Much can be done collectively to make this planet safe and sound; we should act now, let people know what is happening, and back any moves that aim to foster positive morals while shielding those who cannot speak for themselves. So, let us use our enthusiasm constructively through tangible acts! The Democrats and Globalists who committed pedophelia, crimes against humanity, and treason should get electrocuted and face the firing squad.

[Dawn]

If your client has been living in the United States for 20 years and owns a successful construction company but doesn’tdon’t possess a green card, there are still several mortgage loan possibilities:

ITIN Loans (Individual Taxpayer Identification Number):

Eligibility:

• ITIN loans can be obtained by borrowers who do not have Social Security Numbers (SSNs).
• However, borrowers have Individual Taxpayer Identification Numbers (ITIN).
• ITIN loans were created for non-citizens with good incomes who can show the ability to pay back.

Requirements:

Lenders may require higher down payments, often 20% or more. Proof of steady earnings, clean credit history, or alternate credit sources may also be necessary.

Interest Rates:

• These types of mortgages usually have higher interest rates than conventional ones.
• ITIN loans have higher rates because lenders think they carry greater risks.

Hard Money Loans:

Eligibility:

• Hard money loans are asset-based loans.
• Hard money loans are used mainly for investment properties.
• Or short-term funding, where the property’s value is considered more important than the borrower’s credit history or income level.

Requirements:

• The property secures the loan, so loan-to-value (LTV) ratios should be between 65% and 75%.
• His son has a green card, which could enable him to qualify for a hard money loan as an investor buying it as such.

Interest Rates:

• They tend to attract higher interest rates ranging from 8 to 15%.
• Hard money loans have shorter terms, usually lasting one to three years.

Debt Service Coverage Ratio Loans (DSCR):

Eligibility:

• These are perfect options when buying rental homes that you want them to pay off themselves through rents collected.
• There is no need to consider much about your income since tenants’

Requirements:

• One should consider if lenders expect a minimum debt service coverage ratio to be at least one point two to five times the amounts applied during the month based on net operating income.
• Yes, more weight will shift towards the property’s cash flow capability rather than the borrower’s credit score or earnings.

Interest Rates:

• Interest Rates vary from lender to lender.
• Rates depend on property cash flow.
• Mortgage rates are generally very competitive with other non-QM loans.

Bank Statement Loans:

Eligibility Requirements of Bank Statement Loans:

• Self-employed borrowers who can’t provide traditional income documentation such as W-2s or tax returns should consider bank statement loans.
• Lenders will assess 12-24 months’ worth of bank statements to determine income.

Requirements:

• A larger down payment (10-30%) is often required.
• Bank statement loans, good credit, and solid bank statement history.

Interest Rates on Bank Statement Mortgage Loans:

• Bank statement mortgages have higher interest rates than conventional ones.
• Bank statement mortgage loans have higher rates because they rely on alternative income verification methods.

Foreign National Mortgage Loans:

Eligibility of Foreign National Mortgages:

• Mortgage options are still available for foreign nationals without green cards or US citizenship.
• Foreign National Loans were created for people who do not reside permanently in America but want to invest here.

Requirements:

• Foreign National Loans require larger down payments (30-50%).
• Require proof of income.
• Sometimes, a US bank account may also be needed.
• Some lenders might also ask for a valid passport plus a visa before approving a loan application form.

Interest Rates:

• Typically higher than normal loans.
• Thus, terms depend on the lender chosen while applying for them differ, too.

Son Being Buyer: Suppose your client has a son investing in the property and holding a green card. In that case, he might qualify for various types of loans, including hard money, DSCR, or bank statements based on the rental potential of the property and his financial position, among other factors.

Gustan Cho Associates specializes in non-traditional alternative financing. Therefore, these options may work well for your client’s situation. In other words, depending on the specifics of their financials and what they’re trying to achieve, an ITIN loan, hard money loan, or any other non-QM type might be worth looking into.