The following is a partial list of programs offered by Superior Funding Corporation with a brief description of the key elements of each. To learn more about these and other programs that we offer, please contact us at 617-938-3900.
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 2022 is $647,200 (1-unit), $828,700 (2-unit), $1,001,650 (3-unit), and $1,244,850 (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.
Fannie Mae HomeReady and Freddie Mac Home Possible loan programs may be well suited for low to moderate income borrowers looking to purchase their first home, although being a first-time buyer is not a requirement. The programs allow purchasing a home with as little as 3% down payment on a single family and 5% down on a 2-4 family homes and can be more friendly to less than perfect credit scores. Total qualifying income cannot exceed 80% of subject property Area Median Income on these programs.
First time homebuyers with income above 80% of Area Median Income have another 3% down payment option when buying a single family home or condo. Standard Conforming loans do allow 3% down payment with certain restrictions. There are no income limits on this program, but at least one borrower must be a first-time buyer to qualify.
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.
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).