VA loans do have similar requirements to FHA loans for things like septic tanks and water tests when a home is on a private well or private water system. If a buyer is going to apply for a VA loan, I’ll do a quick check and make sure the property will not have issues with the minimum property requirements, just like I would for an FHA loan.
Jumbo Loan Programs
We previously went over jumbo mortgages in a previous chapter, but it’s worth going over them again in more detail. In case you don’t remember, a “conforming loan” is one that is under a certain price threshold as determined by the Federal Housing Finance Agency (FHFA), and a “jumbo loan” is a mortgage that is over that set threshold. You may be wondering why we need to set a threshold for mortgages in the first place. The reason is that Fannie Mae and Freddie Mac — two government-backed investment enterprises — purchase the bulk of U.S. residential mortgages from banks and other lenders for investment purposes. In other words, the lender organization loans a borrower money, and then Fannie Mae and Freddie Mac purchase that loan from the bank to then trade on the stock market. This is called a mortgage-backed security. The whole point of the government allowing this practice is to keep a steady flow of cash to the mortgage industry. This helps people buy homes, which helps the overall economy. However, if there were no limits set on the mortgages Fannie Mae and Freddie Mac could buy, eventually the market would become so overpriced that lower-middle-class Americans couldn’t afford a home.
Therefore, if a lender issues a jumbo loan, the lender is on its own
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