[Gustan Cho]

Rhonda, I suggest you contact the rep and talk to them. See how they sound and their level of service. You can ask other loan officers and see if any of them worked with Quontic.

[Gustan Cho]

Of course! I am happy to provide more information about FHA Jumbo Loans or High-Balance FHA Loans. These loans are for borrowers in high-cost areas whose home prices exceed the standard FHA loan limits.

FHA Jumbo Loans Compared to Traditional FHA Loans:

The main difference is in the loan amount, where FHA Jumbo Loans exceed the standard FHA loan limits within a given area but still fall under the maximum limit set by the Federal Housing Administration (FHA) for these loans in high-cost areas.

Key features of an FHA jumbo loan include:

Down Payment Requirements:

• Minimum 3.5% down payment for credit scores above 580.
• 10% down payment for credit scores between 500-579.
• This is similar to traditional FHA loans; however, it will be higher because the loan size is bigger.

Debt-to-Income Ratio (DTI):

• They are normally capped at 46.9% front-end and 56.9% back-end on Automated Underwriting System-approved files.
• ManualManual underwriting can be up to 40% front-end and 50% back-end, with two compensating factors, such as a higher credit score and a larger down payment.
• Just like traditional FHA loans.

Credit Score Guidelines:

• Minimum of 500 (with 10% down).
• 580 or higher with a 3.5% down payment.
• Some lenders may have higher minimums for jumbo amounts.

Income Guidelines:

• Must show stable and reliable income.
• Typically, one needs two years of employment history.
• Self-employed borrowers usually require two years of tax returns.

Loan Limits:

• They differ from county to county.
• In one-unit properties, Federal Housing Administration, the national low-cost area mortgage limits are $498,257 for 2024.
• The national cap on FHA high-balance loans is $1,149,825 for one-unit properties in high-cost areas.
• The same applies here: anything over this limit but below their high-cost area mortgage limit would qualify as a “jumbo” Federal Housing Administration-backed loan.

Property Types:

• Single-family homes
• Multi-unit properties (up to four units)
• Condos (need to be approved by the Federal Housing Administration)
• Manufactured homes (with restrictions)

Mortgage Insurance:

• The Upfront Mortgage Insurance Premium (UFMIP) is 1.75% of the loan amount. Depending on the term and LTV, the annual MIP is 0.55% of the loan amount.

Interest Rates:

• Usually in line with conventional jumbo loans.
• However, because these loans are for larger amounts, interest rates may be slightly higher than those charged on standard FHA loans.

Occupancy:

Owner-occupied primary residence only

Refinancing Options:

Available through Federal Housing Administration Streamline Refinance (with restrictions)

Differences from Traditional FHA Loans:

Loan Amount: Bigger than standard Federal Housing Administration loans.

Property Values:

Targetted at high-cost areas

Lender Availability:

Fewer lenders provide Federal Housing Administration jumbo mortgages

Underwriting on FHA High-Balance Loans:

It may have more rigid underwriting requirements due to the greater borrowed sum involved.

Documentation:

This could necessitate extensive documentation

Processing Time on FHA Jumbo Loans:

It can take longer due to bigger loan sizes, which require more complex underwriting procedures.

Closing Costs: They might be higher based on a larger loan amount

Key Benefits of FHA Jumbo Loans:

• Lower down payment relative to conventional jumbo mortgages.
• More lenient credit requirements compared to traditional jumbos.
• Allows for higher DTIs than many non-jumbo conforming loans.
• Easier qualifying standards vs. other similar-sized mortgage options.

Considerations:

Mortgage insurance is required throughout the life of the loan if less than 10% down. The property has to meet FHA standards. Even though it is a high-cost area, the laws and regulations governing these programs still set limits.

Remember: Although the Federal Housing Administration sets general rules for all its products, each lender can add extra conditions, especially when dealing with larger sums of money like those in this category. Always shop around and compare offers from different companies before deciding.

[Gustan Cho]

Definitely! I can give you a more focused range of ideas for getting a loan with only 1099 income, especially centered around non-QM loans for people who need more tax documentation and a short income history.

Non-QM Loans for Only 1099 Income (Without Tax Returns Required):

Bank Statement Loans:

• Verify earnings using one or two years’ worth of bank statements.
• Typically, deposits are used as proof of income.
• May accept personal or business bank statements.

1099-Only Loans:

• Designed for independent contractors.
• Can verify income with 1099 forms, often without tax returns.

Asset Depletion Loans:

• Qualify based on total assets rather than income.
• It is a good option if you have a high net worth but report lower earnings.

DSCR (Debt Service Coverage Ratio) Loans:

• For investment properties only.
• Base qualification on the potential rental income of the property to be financed.

Types of Mortgage Loans Based on 1099 Income Only:

One-Year 1099 Income Loans:

• For borrowers with just one year’s history of receiving this pay type.
• Usually, they require larger down payments and higher credit scores.

No-Doc or Limited-Doc Loans:

• Minimal income documentation is needed to close.
• Often, they come with higher interest rates and down payment requirements.

Stated Income Loans:

• Borrower states their income with minimal verification from the lender.
• Less common due to increased regulations

Interest-Only Loans:

• Lower initial mortgage payments but slower equity buildup.
• It can be useful for those with irregular earnings who want lower monthly payments.

Non-QM 1099-Income Only Mortgage Loan Process Overview:

Pre-Qualification: Determine creditworthiness and overall financial situation upfront to see which non-traditional mortgage programs could work.

Loan Program Selection: Identify & select the most appropriate non-QM plan based on the applicant’s case specifics.

Document Gathering Stage: 1 or 2 copies of Form(s) 1099 (typically) Bank Statements (12-24 months). Proof Of Assets Verification(s) Business License. Or Proof Self-Employment Confirmation(s).

Loan Application Submission Step: Complete the formal application process per lender policy.

Income Calculation Phase(s): Evaluate the applicant’s eligibility for the chosen program by considering average monthly deposits, etc.

Property Appraisal Procedure: Official market value assessment conducted by a professional appraiser

Underwriting Process: Closely analyze all submitted information.

Conditional Approval Granted: Loan approved subject to satisfaction of certain conditions.

Satisfaction Of Conditions: Additional documentation may be requested before final funding approval.

Final Approval Issued: Approval given by underwriter(s) working on behalf of lending institution responsible for originating said loan product.

Closing Stage: Reviewing, signing, and funding all necessary paperwork related to mortgage transactions.

Make payment for closing and down payment(s).

1099 Income Only Non-QM Loan Considerations:

Interest Rates:

Usually higher than conventional loans.

The rate may vary significantly depending on the program selected and borrower profile.

Down Payments:

They often require larger upfront payments (20-30% or more).

Some programs may have lower options with higher rates.

Credit Scores:

Typically 660+ is required for better terms.

Some programs go as low as 600.

Debt-to-Income Ratio(s):

It is more flexible than traditional loans, sometimes up to 50% or higher.

Cash Reserves Requirements: You may need to keep 6-12 months’ mortgage payments in the reserve account(s).

Prepayment Penalties Existence:

Please read your documents carefully as they might exist!

Limits on Loans Amounts Borrowed :

Can often exceed conforming loan limits set forth by FHFA

Different Property Types Accepted :

It may allow non-warrantable condos or mixed-use properties that are not eligible under regular guidelines.

Income Stability Proving Timeframe :

While only one year is mandated, showing stable / increasing income over longer periods viewed favorably lenders do take look back past two tax returns sometimes even three years!

Future Refinancing Potential Issues:

Consider potential challenges in refinancing non-QM loans in the future.

Non-QM Mortgage Lender Experience:

Look for lenders experienced in non-QM and 1099 income loans.

Mortgage Broker Assistance:

Working with a mortgage broker like the team at Gustan Cho Associates, who is experienced in non-QM loans, is an urgent priority. Mortgage brokers need to help borrowers understand that these are not normal mortgage guidelines. They’re supposed to help people who wouldn’t qualify under regular rules. But with greater flexibility come harder requirements elsewhere—usually at a much higher price tag. Make sure you know what you’re getting into before signing anything.

[Gustan Cho]

Yes, getting approved for a mortgage loan with only 1099 and no W-2 income is possible. However, the process can be more complicated and different from traditional W-2 income verification. Here’s what you need to know:

Income Verification:

• Two years of tax returns are typically needed to show stable or increasing income.
• Some lenders may require three years for industries that have large fluctuations.

Debt-to-Income Ratio:

• Lenders will look at your net income after business expenses.
• An average of the past two years’ incomes may be used.

Documentation:

• Full tax returns (personal and business).
• Profit and loss statements.
• Business bank statements.
• 1099 forms.

Stability:

Lenders prefer consistent or increasing income.

You may be asked to show that you have been in the same line of work for two or more years.

Credit Score:

• Usually, higher credit scores are required compared to W-2 borrowers.
• 680+ for conventional loans, although some lenders will go lower

Down Payment: A larger down payment may be required.

Cash Reserves: You should show more cash reserves than a borrower who receives a W-2.

Loan Types:

• Commonly, conventional loans are used.
• FHA and VA loans are also options if their requirements are met.
• Non-QM Loans 1099-Income Only Mortgage Loans
• Some banks offer self-employed or bank statement loans.

Write-offs: Remember that significant business deductions can decrease your qualifying income. Non-QM 1099-Income Only Loans do not require tax returns.

Consistency: Lenders like consistent business structure and income sources.

Non-QM Options:

• Some banks offer nonqualified mortgage options.
• These are more flexible about verifying your earnings.
• There are no Income Tax Returns. You can receive 1099 income only for one year.
• You must also be a 1099-wage earner for two years.

Industry:

Certain industries may carry more risk in their eyes, which could impact approval odds/terms, etc.

It’s important to understand that every lender has different policies. Some lenders have more experience working with people who earn a 1099 income, while others are less comfortable with this situation. If you are self-employed, working with a mortgage broker specializing in this area can be helpful because they have relationships with many different lenders and can help guide you through the process.

Also, timing can be key when applying for a mortgage. If you plan on making any major changes to your business structure or income, apply before these changes occur or wait until after they occur so that your approval process goes smoothly.

[Gustan Cho]

Advantages and Disadvantages of Living in California

Positives

Climate: California has a broad range of climates, from sunny beaches to snowy mountains, which enables people to enjoy different ways of life throughout the year.

Opportunities in business: The state has a thriving economy that offers employment opportunities in various sectors, such as technology, entertainment, and agriculture. Silicon Valley and Hollywood are major economic centers in this region.

Diversity: People know this region because it accommodates many different races, each with its own cuisine and cultural events.

Scenery: Cali has many beautiful places, from beaches to mountains or even deserts like Yosemite National Park, which could be considered one of the wonders worldwide.

Education system: It boasts some of America’s best universities, including the UC Irvine system; Stanford University is also located here, along with other institutions like community colleges, etcetera…

Innovation & Tech hubs: Many tech firms and start-ups can be found here because they are an innovation center within California state boundaries.

Leisure and lifestyle: Surfing, skiing, trekking, and wine tasting are just a few examples of leisure activities that are possible in California.

Negatives

Costs related to living there: Californians pay dearly for everything, including housing tax rates that are above average across America. Coupled with high living standards, Californians pay dearly, though not all parts might be equally expensive, so one should choose wisely before settling down anywhere else. Traffic jams plus commutes that take forever, especially during rush hours, are mostly experienced around Los Angeles City Areas, where congestion levels always top the charts.

Environmental hazards linked mainly to earthquakes, floods, fires, and droughts, among others, usually occur within this geographical zone since it lies along major fault lines where tectonic forces collide, leading to natural calamities.

Unaffordable homes are mainly because they are very expensive, thus making it difficult for ordinary citizens possessing limited financial resources to acquire their own homes besides having to contend with bidding wars, which are part of the purchase process.

Homeless individuals living on streets can make life unbearable, especially those residing in big towns or cities where significant numbers exist within limited spaces, sometimes leading to overcrowding, thus creating unhealthy living conditions for all parties involved, including passersby passerby.

Strict regulations and taxes: California is notorious for having many rules its inhabitants must follow without compromise. Failure to do so attracts heavy penalties while imposing higher tax rates on businesses and individuals than other states, thereby acting as a burden rather than a support system.

It is the best place to live in California and raise a family with great job opportunities.

San Francisco Bay Area

The pros include many technology companies (Google, Apple, Facebook), exceptional schools, cultural diversity, and stunning scenery.

Cons: High cost of living, housing prices, and traffic congestion can be problematic.

San Diego

Pros: A pleasant climate all year round; beautiful beaches close by. A good school district nearby suitable for children’s upbringing coupled with family-friendly neighborhoods making it an ideal place for raising kids; a strong biotech industry healthcare sector provides ample employment opportunities within this region, especially for those who possess relevant qualifications needed by such institutions, etcetera….

Cons: The cost of living remains relatively high compared to some other parts of the USA, thereby limiting affordability levels, particularly among low-income earners or individuals operating small businesses. Hence, people should settle here only if they can comfortably meet these demands; otherwise, they may find themselves facing financial constraints sooner rather than later.

Sacramento

Pros: It offers more affordable housing options than coastal cities like San Francisco or Los Angeles, plus a growing job market mostly concentrated around government institutions and educational establishments alongside their associated service sectors such as private tutoring firms located within city limits suburbs bordering Sacramento County, etcetera. Also, there are good school districts available where parents can enroll their children, thus ensuring that they receive quality education while still young enough to benefit from it fully later in life;

Cons: Summers here can get hotter and less glamorous than in other coastal cities.

Irvine

Pros: Irvine has top-rated schools; safe neighborhoods due to its status as a planned community where security measures have been put into place, making it one of the safest places to live within this region, thus being a good environment for bringing up children; strong job market in the tech industry and education sector, especially for those who possess relevant qualifications required by such institutions, etcetera…

Cons: Expensive housing costs suburban sprawl.

Santa Barbara

Pros: Excellent climate throughout year-round, including winter months when most parts experience extremely cold temperatures coupled with heavy snowfalls, hence posing serious threats towards human beings, animals, and plants alike; beautiful coastal setting offers scenic views, an ideal place for leisurely walks, picnics, etcetera…; good schools district provides quality education alongside strong community ties among residents fostered through various social events organized regularly throughout year round thereby creating sense belongingness unity among them all;

Cons: High living standards, costs associated with services provided within city limits, hotels, restaurants, bars, clubs, etc.

Some of the best places to live in California to raise a family are those that offer a mix of strong employment opportunities, good-quality education, and family-friendly atmospheres.

[Gustan Cho]

Becoming a first-time homebuyer in California is possible, although challenging. Some of the many programs and aid options available include:

• Programs offered by the California Housing Finance Agency (CalHFA).
• FHA loans that have lower down payment requirements.
• VA loans for veterans.
• USDA loans for rural areas.
• Down payment assistance programs

That said, these programs often have restrictions, such as income limits; even so, even with help from them, many people still find it hard to afford homes because prices are so high.

But regarding your question about why anyone would want to live in California considering all these problems — there are quite a few reasons:

Economic opportunities: Despite pockets of high unemployment rates throughout certain regions/areas within this state alone — we must not forget its diverse economy, which remains vibrant across many sectors including but not limited to tech, entertainment & agriculture;

Climate: Many parts of California boast mild winters coupled with hot summers that typical Mediterranean climates tend to offer, which makes living here more attractive than in other places.

Natural beauty: From sandy beaches stretching along the coastline into snowy mountain ranges or lush green forests dotting everywhere, nowhere else offers such variety as CA!

Cultural diversity: There isn’t any doubt about multiculturalism being one major driving force behind all those who choose to reside in any given year, whether they were born here or moved later on during their lives, especially in big cities like Los Angeles where people come from every corner world over seeking better life opportunities offered by American dream itself among others.

Innovation & technology hub: Still considered global, Silicon Valley attracts the best and brightest minds worldwide thanks to its culture that nurtures and supports entrepreneurship, innovation, and technological advancements to drive future economies worldwide.

Education: With prestigious world-class universities and strong public university systems, secondary and tertiary education levels remain key pillars supporting overall growth development countrywide. Thus, CA once again proves why it stands out from the rest of the USA in terms of academics alone.

Entertainment & culture: This is where Hollywood-based needs to say more. Every year, millions flock here to see these things themselves and seek employment within the creative arts industry, among other sectors such as hospitality, service, tourism, etc.

Food scene: When it comes to eating out, there are few places like California. Yes, you can get all kinds of cuisine from different parts of the world right at your doorstep if you desire; however, even locally sourced organic farm produce still ranks high high-quality tastes for both residents and visitors alike since the state is blessed with having the most fertile soils across nation hence the abundance of fresh fruits and vegetables all year round.

Progressive policies: Here, some may argue that the point of view of social justice warriors might seem a bit extreme. The truth is that most of the population agrees with such stands taken by government officials and politicians who represent them. This holds especially true for the major Democratic Party, which has been the dominant political power in Californian politics for decades now and continues to wield significant influence even after losing its grip on some seats during recent elections due to gerrymandering, among other factors.

Lifestyle: One word sums up everything—Californians live a lifestyle where there’s no tomorrow today anymore. Tomorrow never comes. California is known for its laid-back attitude, health consciousness, outdoor living, and caring for yourself while enjoying year-round weather.

However, please note that even though we have many problems—I mean extremely hard times, believe me or not—the severity varies depending upon where exactly one lives within this vast landmass called California. Some places suffer lower crime rates than others, affordable houses, better job prospects, etcetera, but generally speaking, everywhere else faces common issues mentioned earlier in my response to your question about why people continue living here despite everything going wrong.

Further, many locals stick around their families, friends, and established communities they grew up together, and loved ones nearby always make sure they never forget where they came from and what they have accomplished thus far in life, generally speaking anyway, because sometimes those achievements could be quite remarkable, indeed, surpassing anybody else’s wildest expectations, whatsoever maybe even own self-imposed limitations too but then again like said before don’t worry too much if things do not make sense right off the bat because eventually, everything will become crystal clear.

In addition, some folks never leave the state due to close family ties, lifelong friendships, hometown pride — or simply because it’s home. But as we discussed today, afternoon, evening, night, late morning, early evening, or whenever this conversation occurred, the afternoon lunch break time zone difference didn’t matter much anyway due to high costs and other difficulties. Many residents are contemplating moving elsewhere outside the borders of the United States and the North American world.

Ultimately, choosing whether to live in California boils down to weighing pros and cons based on personal priorities. Individuals may have different perspectives about what constitutes “good” versus “bad,” thus making each decision unique. For some people, positives outweigh negatives, while others find challenges insurmountable, thus leading them to opt against.

[Gustan Cho]

Of course! I will give you a complete overview of mortgage lending requirements for investment property jumbo loans, including traditional options and non-QM (non-qualified mortgage) options.

Traditional Jumbo Loans for Investment Properties:

Credit Requirements:

• Typically, 720+ credit score.
• Positive credit history with no late payments or collections.

Income Requirements:

• Stable income that can be verified.
• Generally, two years’ worth of tax returns and W-2s. If self-employed, you may need to provide 2-3 years of business tax returns.

Down Payment:

• Usually 25% – 30% of the purchase price.
• Some lenders may require up to 35% – 40% down on multi-unit properties.

Debt-to-Income Ratio (DTI):

• Usually capped at 43%.
• Some lenders may allow up to 50% DTI for strong applicants.

Reserves:

• Typically require 6-12 months’ worth of mortgage payments in reserves.
• This could increase with multiple investment properties financed.

Loan Limits:

Varies by lender and location; typically starts above conforming loan limits.

Property Types:

Single-family homes, multi-unit properties (2-4 units), condos

Non-QM Jumbo Loans for Investment Properties:

Credit Requirements:

• More flexible; some lenders accept scores as low as 580 – 600.
• It may still qualify after recent credit events such as bankruptcy or foreclosure.

Income Requirements:

Alternative documentation options are available

Bank statements, asset depletion, and rental income are all possible ways to verify income.

Down Payment:

Depending on the program and borrower qualifications, the total can range from 20% to 40%.

Higher interest rates might be charged for lower down payment scenarios.

Debt-to-Income Ratio (DTI):

It can go higher than traditional QM loans; the maximum varies by program/lender.

It may qualify with higher DTI if other factors, such as assets or reserves, are strong.

Reserves:

Different programs have different reserve requirements; typically, 6-12 months’ worth of payments.

Bank statements may be used to prove reserves in some cases.

Loan Limits: Can sometimes exceed traditional jumbo loan limits, up to $5 million or more.

Property Types: More flexible than conventional options: non-warrantable condos, mixed-use properties, etc.

Mortgage Rates on Non-QM Jumbo Loans:

• In general, rates will be higher than for traditional jumbo loans.
• Rates can range from 1% – 3% higher than those offered on conforming loans.

Rate is determined by credit score, down payment, and loan structure.

Types of Traditional and Non-QM Jumbo Loans:

Traditional:

• Fixed-Rate Jumbo Loans
• Adjustable-Rate Jumbo Loans (ARMs)

Interest-Only Jumbo Loans

Non-QM:

• Bank Statement Loans
• Asset Depletion Loans
• Debt Service Coverage Ratio (DSCR) Loans
• Foreign National Loans
• Recent Credit Event Loans (for those with recent foreclosures or bankruptcies)

Closing Costs:

• Similar to conventional loans, they typically range between 2% – 5% of the loan amount.
• This may include origination fees, appraisal fees, title insurance fees, etc.

Some lenders who are not QM may charge higher fees.

Traditional and non-QM jumbo loan mortgage process:

Pre-qualification: First, look at creditworthiness and financial situation

Loan application:

• Complete official application
• Give necessary documents (changes based on traditional or non-QM)

Document review:

• The lender goes through all the papers
• They might ask for more information

Property appraisal: A professional figures out how much the property is worth.

Underwriting:

• A detailed analysis of the borrower’s financial situation and property specifics.
• More manual underwriting may be required for non-QM loans.

Conditional approval: The loan is approved with some conditions.

Satisfaction of conditions:

Borrower submits any additional necessary documentation.

Final approval:

The lender gives the final green light for the loan

Closing:

• Sign all loan paperwork
• Pay closing costs and down payment
• Process differences are explained in brief below:

Traditional Jumbo:

• More streamlined process
• Tighter documentation standards
• It may take longer due to increased scrutiny

Non-QM Jumbo:

• More adaptable process
• Other forms of document verification are often allowed/accepted
• It may be faster, especially with specialized lenders and non-QM lenders involved
• Additional considerations for investment properties:

Rental income:

• 75% of rental income is typically used to qualify for traditional loans.
• Use a higher percentage or DSCR (debt service coverage ratio) to qualify for non-QM mortgages.

Property condition:

• Both usually require good condition
• Flexible with properties that need work on non-qm loans, though.

Experience:

Some lenders might need previous landlord experience, especially regarding larger amounts borrowed.

Portfolio concentration:

Certain lenders may limit the number of financed properties or total exposure to one borrower.

These are just general rules; they can greatly differ from lender to another. There are many types of niche products in the non-QM market that cater specifically to different borrowers’ situations. You must compare rates and work with a mortgage broker with experience lending on investment properties to find the perfect fit for your unique situation.

[Gustan Cho]

This is everything I know about FHA Jumbo Loans:

Loan Limits:

Change each year based on middle home prices:

FHA Loan Limit in Median Priced Areas of the United States for 2024:

• 1-unit: $498,257
• 2-unit: $637,950
• 3-unit: $771,125
• 4-unit: $958,350

Differ depending on county and property type (1-4 units)

FHA Loan Limit in High-Cost Areas of the United States:

These are the FHA high-cost area limits for 2024:

• 1-unit: $1,149,825

• 2-unit: $1,472,250

• 3-unit: $1,779,525

• 4-unit: $2,211,600

Down Payment:

If the credit score is 580 or higher, then the minimum is 3.5%

10% if the credit score is between 500-579

Can be from family members or eligible non-profits

Credit Score Requirements:

Absolute minimum: 500

Minimum for 3.5% down: 580

Many lenders have higher minimums (620-640) for jumbo loan amounts as part of lender overlays.

Debt-to-Income Ratio (DTI):

• Front-end DTI (housing expenses): Usually capped at 46.9%.
• Back-end DTI (all debts): Normally capped at 56.9%.
• It can go up to 40% front-end and 50% back-end on manual underwriting with compensating factors.

Income Verification:

• Usually, you need two years of steady employment history.
• Self-employed borrowers usually need two years of tax returns.
• Multiple income types are accepted (salary, hourly, commission, etc.).

Property Requirements:

• Must be a primary residence.
• Allowed property types include one to four units.
• Must meet FHA property standards.
• Condos must be FHA-approved.

Mortgage Insurance:

• Upfront Mortgage Insurance Premium (UFMIP).
• Charged as a percentage of the loan amount – usually around 1.75%.

Annual MIP: Varies based on loan term and LTV ratio – 0.55%.

MIP duration:

• It lasts for life on loans with down payments below or equal to ten percent.
• For others, it ends after 11 years.

Interest Rates:

• Competitive with conventional jumbo loans.
• It can be fixed or adjustable.

Loan Terms:

• 15 or 30-year terms are the most common.
• Some lenders offer 20 or 25-year terms.

Closing Costs:

• Similar to standard FHA loans, they may be higher due to the larger loan amount.
• It can be partly covered by seller contributions (up to six percent of the sales price).

Appraisal Requirements:

• It would help if you used an FHA-approved appraiser.
• Property must meet FHA’s Minimum Property Requirements (MPR).

Occupancy Requirements:

• Must be owner-occupied within 60 days of closing.
• Must remain primary residence for at least one year.

Refinance Options:

• FHA Streamline Refinance is available after six months.
• FHA Cash-Out Refinance is available after twelve months.

Assumability:

Lender approval is required to assume FHA loans, including jumbos.

Bankruptcy and Foreclosure Waiting Periods:

Chapter 7 Bankruptcy: Must wait two years from discharge date.

Chapter 13 Bankruptcy: May qualify after one year of on-time payments under certain circumstances.

Foreclosure: Three years must pass before you can get approved again.

Eligible Borrowers:

U.S. citizens

Permanent residents

Non-permanent residents with valid work authorization

Co-borrowers:

Non-occupying co-borrowers allowed (with restrictions)

Cash Reserves:

Typically, they need one to two months of mortgage payments in reserve

May require more reserves for three and four-unit properties

Employment:

A minimum of two years of continuous employment history is generally required.

It may qualify with strong compensating factors if it is under two years old.

Debt Payoff for Qualification:

Allowed on debts being paid off to meet qualification requirements; not permitted with all types of mortgages, though, so check first!

Student Loans:

Counted in DTI even if in deferment; calculated as follows – use greater than one percent of the loan balance or actual payment.

Manual Underwriting:

Available for borrowers with no credit score or non-traditional credit; additional requirements apply.

Energy Efficient Mortgage (EEM):

It can be used in combination with FHA Jumbo for energy-efficient improvements.

Renovation Options:

Can be combined with the FHA 203(k) program for home improvements

Seller Concessions:

• You are limited to 6% of the sales price.
• You can only use seller concessions for closing costs, not down payments.

Remember that while these are FHA guidelines, individual lenders may have stricter requirements, especially regarding jumbo loan amounts. Always shop around and compare offers from multiple FHA-approved lenders.

[Gustan Cho]

Of course! I would love to help. Based on my experience as a loan officer, here is an extensive guide on non-QM 1099 income mortgage loans for owner-occupied homes, second homes, and investment properties.

Owner-Occupied Homes: Eligibility Requirements:

• Proof of 1099 income (typically 1-2 years)
• Bank statements (12-24 months)
• Proof of assets
• Business license or proof of self-employment

Credit Scores:

• Minimum: Often 600-620
• Preferred: 660+
• Best terms: 700+

Down Payment:

• Minimum: Can be as low as 10% for strong borrowers
• Typical: 20-25%
• Lower credit scores may require 30%+

Property Types:

• Single-family homes
• Condominiums (including some non-warrantable)
• Townhouses
• 2-4 unit properties (if one unit is owner-occupied)
• Planned Unit Developments (PUDs)

Second Homes: Eligibility Requirements:

• Similar to owner-occupied, plus
• Property must be suitable for year-round occupancy
• Generally located in a resort or vacation area
• The borrower must have exclusive control over the property

Credit Scores:

• Minimum: Often 620-640
• Preferred: 680+

Best terms: 720+

Down Payment:

• Minimum: Usually 20%
• Typical: 25-30%

Some lenders may require up to 35-40%

Property Types:

• Single-family homes
• Condominiums
• Townhouses
• Some lenders may allow small multi-unit properties

Investment Properties: Eligibility Requirements:

• 1099 income documentation or bank statements
• Proof of assets
• Some lenders may require landlord experience
• DSCR (Debt Service Coverage Ratio) may be used instead of income

Credit Scores:

Minimum: Often 640-660