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Loan Types
VA
Up to 6% credit and 0% down but takes longer to close because the appraisal is slow.
Must have Condo Docs before appraisal is ordered so a tight time frame on the Condo Docs should be used.
Non-allowable are expenses which the buyer can't pay so the seller or lender must cover them.
One option is to request a closing costs credit from the seller. This should be fixed dollar amount or percentage.
A large closing cost credit means you have to offer more which increases the risk the appraisal will come in lower.
The best option is to have the lender take care of the non-allowable's.
VA will not lend if the home has anything unpermitted.
Lender cannot pick the appraiser.
FHA
Allows for 3.5% down and potentially lower closing costs. Closing costs can be rolled into the loan.
Condos must be 51% or higher owner occupancy.
FHA will not lend if the home has anything unpermitted.
Can request seller credit up to 3% of closing costs.
Lender can pick which appraiser to use.
Conventional
Conventional loans require at least 10% down, although less than 20% might not qualify for Mortgage Insurance.
20% or more down than owner occupancy rate for Condos does not matter.
No investment loans for Condos with less than 50% owner occupancy.
Can request seller credit up to 3% of closing costs.
Lender cannot pick the appraiser.
USDA
You do not have to be a farmer. Many homes on Oahu qualify for a USDA loan.
Eligible Areas - Village Park, Royal Kunia, Ewa Beach, Makakilo, Kapolei, Leeward Region, Central from Whitmore Village, North Shore, Kahuku to Ahuimanu, Waimanalo, includes Single Family and Condos.
If you can go USDA you can save your VA for later use.
Up to 6% credit, 0% down, 45 day closing, easy pre-approvals, choose appraiser, no mortgage insurance.
Might offer better terms than an FHA or conventional loan.
Income must be below 109K for family of 4 or $144K for 5 or more people.
Condos must be on FHA or VA approved list.
Lender can pick which appraiser to use.
MCC
A Mortgage Credit Certificate can be used for some loans.
Income for a family of 3 must be less than $92,760 and over 3 must be less than $108,220.
Maximum home price is $644,429.
The MCC allows you to deduct 20% of your mortgage interest as a direct federal tax credit.
A MCC will normally delay the closing so sellers are not so happy with offers that use them.
All loans
Things that kill a loan: - Litigation, short term & rental pools, 1 entity owning more than 10%, leasehold.
Nonconforming is OK, which means it is not up to today's code but grand fathered in from when it was built.
Once in escrow make sure your lender knows the closing date and the conditional approval date.
For more help with loans please see our recommended lenders.