monthly income. • Gig Economy Workers: People with non-traditional or fluctuating incomes. • Borrowers with Past Credit Issues: Those recovering from financial setbacks but who are otherwise financially capable.
TYPES OF MORTGAGE PROVIDERS
Lenders offer both conventional and government backed loan instruments. Government-insured loans include the Federal Housing Administration (FHA) program (low down payment), the Veterans Affairs (VA) program (veterans and active service members), and the United States Department of Agriculture (USDA) program for specified rural locations. More detailed descriptions of these providers appear in Chapter Six. Conventional (non-government) loans come either from the lender's portfolio, outside investors, or are sold to Fannie Mae and Freddie Mac. Fannie and Freddie are the two government- sponsored real estate enterprises known also as GSEs, but they are not government insured in the manner of the Federal agencies named above.
MORTGAGE AMOUNTS
The size of a mortgage is expressed as either conforming or non-conforming (also referred to as jumbo). The dollar limits to determine if it is conforming or jumbo are set by the Federal Housing Finance Agency (FHFA). A jumbo loan is one that is larger than the conforming price set by the FHFA. Non conforming (jumbo) loans will have different guidelines than smaller ones. In addition to requiring a higher income level they often set a lower allowable Debt to Income
26
Powered by FlippingBook