Answers to frequently asked questions

Fannie Mae Loans

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Q: What is Fannie Mae? 
A: Fannie Mae guarantees and purchases loans form mortgage lenders to make sure families can buy, refinance and rent a home. They also help families avoid foreclosure. Fannie Mae is a government sponsored enterprise, but is privately owned. It receives support from the Federal Government. The main function is to provide liquidity to the nation's mortgage finance system. Fannie Mae purchases home loans made by private firms (providing the loans meet the requirements), package those loans into mortgage-backed securities and guarantee timely payment of principal and interest on those securities to outside investors. The Fannie Mae website is http://www.fanniemae.com/portal/index.html

Q: What does Fannie Mae stand for? 
A: The Federal National Mortgage Association.

Q: How do I know if Fannie Mae owns my loan? 
A: You can find out if Fannie Mae owns your loan by using the self-service loan look-up tool https://www.knowyouroptions.com/loanlookup

FHA Loans

Q: What is an FHA loan? 
A: An FHA loan is a mortgage insured by the Federal Housing Administration, a government agency within the US Department of Housing and Urban Development. A borrower with a FHA loan pays for mortgage insurance which protects the lender from loss if the borrower defaults on the loan. Because of the insurance generally interest rates are lower and there are more flexible qualification requirements.

Q: How does mortgage insurance work with an FHA loan? 
A: Actually two mortgage premiums are required on all FHA loans. The up-front 2.25% of  the loan amount and the annual premium of .55%. The up-front premium is paid when the borrower gets the loan, but it can be financed as part of the loan. The annual premium is paid monthly within the loan.

Q: What is the minimum down payment? 
A: The minimum down payment is 3.5%.

Q: Is SC Home Loans an FHA approved lender? 
A: Yes.

Q: Is there extra cash available for repair when getting an FHA loan? 
A: Yes. For instance if a home buyer is purchasing an older home or foreclosure and needs to do renovations and repairs. A 203(k) Rehabilitation Mortgage Insurance Program loan allows borrowers to include cost of repairs within the home financing.

Q: What about less than perfect credit? 

A: FHA loans don't have a minimum credit score. A borrower's credit worthiness is considered.

Q: Can a borrower have more than one FHA loan?? 

A: Typically no. However transactions in which an existing FHA mortgage is paid off and another FHA mortgage is acquired is acceptable.  You may also be able to have more than one if they are in different states.

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Freddie Mac Loans

Q: What is an Freddie Mac loan? 
A: Freddie Mac stands for Federal Home Loan Mortgage Corporation. It is a private corporation founded by Congress, the Federal Home Loan Mortgage corporation's mission is to promote stability and affordability in the housing market by purchasing mortgages from banks and other loan makers. The corporation is currently under conservatorship, under the direction of the Federal Housing Finance Agency.

Q: How do I know if Freddie Mac owns my loan? 
A: You can find out if Freddie Mac owns your loan by using the self-service loan look-up tool https://ww3.freddiemac.com/loanlookup/

Q: What is Freddie Mac doing to support the housing recovery? 
A: Freddie Mac is supporting the nation's housing market by providing a constant stream of mortgage funding that helps America's families buy, refinance, or rent a home. They are also helping to stabilize communities through homeowner assistance programs, homeowner education, and more.

Q: What is Freddie Mac doing to protect against another housing recession?
A: Freddie Mac has strengthened it's credit and eligibility standards to produce better quality loans that foster sustainable homeownership opportunities for America’s families. In September 2008, Freddie Mac was placed into conservatorship in order to help restore confidence in the company, enhance their capacity to fulfill their mission and mitigate the systemic risk that contributed directly to the current instability in the market.

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VA Loans

Q: What is a VA Loan? 
A: VA helps Service members, Veterans, and eligible surviving spouses become homeowners. They provide a home loan guarantee benefit and other housing-related programs to help Veterans buy, build, repair, retain, or adapt a home. VA Home Loans are provided by private lenders, such as banks and mortgage companies. VA guarantees a portion of the loan, enabling the lender to provide you with more favorable terms.

Q: What are the eligibility requirements? 
A: The length of your service or service commitment and/or duty status may determine your eligibility for specific home loan benefits.

Q: What is IRRRL? 
A: It stands for Interest Rate Reduction Refinance Loan.

Q: What does a VA Interest Rate Reduction Refinance Loan provide? 
A: No appraisal or credit underwriting package is required when applying for an IRRRL. An IRRRL may be done with "no money out of pocket" by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs. No lender is required. A VA lender will process the application, and borrowers do not receive any cash from the loan proceeds. An IRRRL can only be made to refinance a property on which you have already used your VA loan eligibility. It must be a VA to VA refinance, and it will reuse the entitlement you originally used. Generally, all Veterans using the VA Home Loan Guaranty benefit must pay a funding fee. 

Q: What are the eligibility requirements?
A: The length of your service or service commitment and/or duty status may determine your eligibility for specific home loan benefits.

Purchase Loans and Cash-Out Refinance: VA-guaranteed loans are available for homes for personal occupancy. A borrower must have a good credit score, enough income, a valid Certificate of Eligibility (COE), and meet certain service requirements. http://benefits.va.gov/HOMELOANS/purchaseco_certificate.asp for more details

Housing Grants for Disabled Veterans: VA helps Veterans with certain total and permanent disabilities related to your military service obtain housing with either a Specially Adapted Housing (SAH) or Special Housing Adaptation (SHA) grant. http://benefits.va.gov/HOMELOANS/adaptedhousing.asp  for more details

http://benefits.va.gov/homeloans/index.asp  for the U.S. Department of Veterans Affairs website concerning home loans.