Superior Funding Corporation offers a wide range of mortgage products. Our list includes low-to-moderate income loans, high amount Jumbo mortgages and everything in between. Which residential loan program best caters to your needs? Take a moment to read through the product and program descriptions, then contact us to discuss your specific situation and your goals. Together we will make the ultimate informed decision.
Fixed rate mortgage loans feature constant interest rate and monthly payments for the life of the loan. Available terms include 10 years, 15 years, 20 years, 25 years and 30 years. On Conventional Conforming loans, we also offer a custom term option (8-29 years). Generally, rates on shorter term loans are lower - 10 and 15 year fixed rates would be lower than 20 and 30 year, while payments are higher due to faster loan repayment. Fixed rate loans are ideal for borrowers who plan to be in the home for a long time and/or people who do not like risks.
Adjustable rate mortgage loans (ARMs) feature a fixed rate period after which the rate varies based on the underlying index. A typical ARM is a 30 year loan with initial fixed rate period of 3, 5, 7 or 10 years. After the fixed rate period ends, the rate changes annually. New rate is calculated by adding a margin (a constant value established upfront) to current value of the index (Rate = Index + Margin). Typically, an ARM has a lower rate than a longer term fixed rate loan, all things being equal. ARMs can be a good choice for borrowers who are not planning to stay in the home for a very long time and/or people who are willing to take risks in exchange of a lower initial payment. ARMs carry a risk because one may not be able to refinance later on and may face higher rates. The reward is lower payments, at least during the fixed rate period (but also sometimes after it ends).
Loans which fit criteria established by the two largest secondary market agencies, Fannie Mae and Freddie Mac, are called Conventional Conforming. The most commonly known parameter of Conforming loans is the loan size limit, which for 2018 is $484,350 (1-unit), $620,200 (2-unit), $749,650 (3-unit), and $931,600 (4-unit). However, the borrower must also meet the credit standards set by the two agencies. Conforming loan qualification is performed using Desktop Underwriter or Loan Prospector Automated Underwriting Systems, while the final approval is subject to underwriting review of the complete loan file. Conforming loans have been and continue to be by far the most frequently used financing solution.
High Balance Conforming Loans (a.k.a. Super Conforming or Conforming Jumbo) are Fannie Mae and Freddie Mac loans above standard Conforming limits designed for high cost geographical areas. High Balance Conforming loans have somewhat stricter criteria and slightly higher rates than standard Conforming loans.
Click here for 2019 High Balance Conforming loan limits (this is a PDF file).
Jumbo loans are those which exceed Conforming loan limits and therefore cannot be purchased by Fannie Mae and Freddie Mac. These are portfolio products offered by large Wall Street investors and banks through their retail and wholesale channels. Jumbo underwriting parameters are generally more restrictive than on Conforming loans, requiring higher credit scores, larger down payment (generally 20%), and certain post-closing reserves (funds remaining in borrower's bank accounts after settlement).
FHA loans are insured by HUD and are designed to accommodate borrowers with lower down payment and/or less than perfect credit history. FHA loans are more flexible but are also more expensive than conventional Conforming loans. Borrower pays Upfront Mortgage Insurance Premium (MIP) which is financed into the loan as well as Annual Mortgage Insurance Premium in monthly instalments to HUD in exchange for HUD insuring the loan against default. FHA loans require only 3.5% down payment on 1-4 unit primary residence. Non-owner occupied (investment) properties are not allowed. FHA loans are more forgiving to recent bankruptcies than Conventional loans. Chapter 7 wait period is 2 years after discharge (1 year if the bankruptcy was caused by extenuating circumstances beyond borrower's control which led to loss of income). Chapter 13 must be in repayment for at least 12 months.
VA loans are guaranteed by U.S. Department of Veteran Affairs. VA home loan is a benefit available to American veterans, people on active duty, and National Guard and reserve members. It is also available to surviving spouses. VA loans can be used to purchase a home with zero down payment or refinance with or without cash-out up to 100% of home value. Eligibility for VA loan is described here. U.S. Department of Veteran Affairs charges a loan funding fee for the guarantee. Veterans receiving service-related disability compensation and surviving spouses of veterans who died in service or from a service-connected disability do not pay the funding fee. The amount of funding fee depends on several factors, please see the latest VA funding fee chart for details.
USDA loans are insured by the US Department of Agriculture and are available to qualified individuals who are purchasing or refinancing their home loan in an area that is not considered a major metropolitan area by USDA. USDA loans are available in many areas most people wouild not consider rural.
Learn more about USDA loans.
Fannie Mae 97 allows purchase of single family primary residence with only 3% down and loan amount up to standard Conforming maximum. Unlike HomeReady and Home Possible products below, there are no income limits on this program and the property does not have to be in an underserved area, but at least one borrower has to be a first time home buyer.
Fannie Mae HomeReady allows purchase of single family primary residence with as little as 3% down under expanded criteria (as compared to Fannie Mae 97 product). The program is more forgiving to lower credit scores than regular Conforming products (lower scores do not necesserilly result in higher rates). To qualify, either the borrower's income needs to be under certain income limit (generally, 80% of subject property Area Median Income), or the home needs to be located in an area considered underserved. The program allows loan amounts up to standard Conforming maximum.
Use Fannie Mae HomeReady eligibility lookup tool to check income limits based on property address.
Freddie Mac Home Possible allows purchase of single family primary residence with as little as 3% down, and 2 to 4 unit primary residence with as little as 5% down (especially valuable feature), with loan amounts up to standard Conforming maximum. Similar to Home Ready, this program is more forgiving to lower credit scores than regular Conforming products (lower scores do not necesserilly result in higher rates). The borrowers must meet Freddie Mac area-based income limits (which for some areas may be higher than Fannie Mae's thus allowing borrowers with higher income to still qualify), or the property must be in an area considered underserved.
Lookup Freddie Mac HomePossible eligibility lookup tool to check income limits based on property address.
Generally, Private Mortgage Insurance (PMI) is required on single loans with less than 20% down. PMI is usually paid by the borrower monthly and is an additional expense on top of the loan. In many cases, borrowers can opt for a slightly higher rate and have the lender pay Mortgage Insurance for them. This option, called LPMI (lender-paid MI), can result in lower total monthly payment, allowing you to qualify for a larger purchase. It is generally available on Conforming loans with as little as 3% down. Call us to find out if you are better of with traditional (borrower-paid) MI or a lender-paid MI if you are planning to put less than 20% down.
Non occupant co-borrower can be added to the application to increase combined income for qualification purposes. For example, it can be parents helping their child buy his or her first home. Credit history, debt and assets of the non-occupant co-borrower are considered in underwriting as well, not just the income. Non-occupant co-borrower does not need to occupy the property. As long as the borrower occupies the property, it will be treated as primary residence for qualification purposes.
Combo loans are two-loan solutions, with main loan in the first position and a smaller piggyback loan in the second. One can use such combination for various purposes on both purchase and refinance transactions. For example, a combo loan can be used to avoid the need for Mortgage Insurance with less than 20% down payment. It can also be used to avoid stricter Jumbo loan criteria by splitting a larger loan into two - a Conforming first loan and a piggyback second on top of it.
Home Affordable Refinance Program (HARP) was designed to help borrowers with homes under water (with mortgage amounts near or higher than the property value), who otherwise would not be able to refinance. Loan-to-value ratios are waived on this product. The loan must be owned by Fannie Mae or Freddie Mac and must have been sold to them prior to May 31, 2009. Primary residence, second home, and investment properties are eligible. If your loan does not qualify for a refinance, you may still be able to take advantage of today's lower rates if it qualifies under HARP.
If you need loan amount exceeding Conforming limits but can't seem to meet traditional strict Jumbo criteria, Flexible Jumbo may be the answer. Flexible Jumbo requires smaller down payment (as little as 5%), and may allow less extensive credit history and lower post-closing reserves than typical Jumbo products. Flexible Jumbo underwriting uses less rigid, common-sense approach for situations just outside of typical Jumbo product standards.