| Financing Options |
Construction Perm Loan
The construction-to-perm loan provides the borrower an opportunity to purchase the land or lot, fund the construction of their personal single family home with
either a "Prime + 1" or "One Year Arm" construction product, and then modify from the construction phase to a permanent product all with one closing. The
"Prime Rate" based construction loan charges the borrower interest-only payments during the construction phase and is based on funds disbursed
throughout the project. The interest payments are typically based on an interest rate equal to "Prime" as established from time to time as shown in the Wall
Street Journal plus 1%. This is known as the construction interest rate. Upon completion of the construction of the home, the borrower(s) will modify their initial
closing documents to their selected permanent mortgage. Usually, your builder offers to pay the interest payments during the construction phase.
Conventional Loan
Conventional loans are secured by government sponsored entities such as Fannie Mae and Freddie Mac. Conventional loans can be made to purchase or
refinance homes with first and second mortgages on single family to four family dwellings.
Fannie Mae and Freddie Mac's single family, first mortgage loan limit is $417,000 in 2006. This limit is reviewed annually and, if needed, changed to reflect
changes in the national average price for single family homes. The current loan limit applies to all conventional mortgages delivered after January 1, 2006.
In addition to common loan structures such as fixed rate, adjustable rate and balloon loans, Fannie Mae and Freddie Mac also have loan programs for low to
no down payments, community lending and affordable housing initiatives, construction to permanent, home improvement and reverse mortgages.
Conforming Loans
Conventional loans may be conforming and non-conforming. Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae
and Freddie Mac. These two stockholder-owned corporations purchase mortgage loans complying with the guidelines from mortgage lending institutions,
packages the mortgages into securities and sell the securities to investors. By doing so, Fannie Mae and Freddie Mac, like Ginnie Mae, provide a continuous
flow of affordable funds for home financing that results in the availability of mortgage credit for Americans.
The construction-to-perm loan provides the borrower an opportunity to purchase the land or lot, fund the construction of their personal single family home with
either a "Prime + 1" or "One Year Arm" construction product, and then modify from the construction phase to a permanent product all with one closing. The
"Prime Rate" based construction loan charges the borrower interest-only payments during the construction phase and is based on funds disbursed
throughout the project. The interest payments are typically based on an interest rate equal to "Prime" as established from time to time as shown in the Wall
Street Journal plus 1%. This is known as the construction interest rate. Upon completion of the construction of the home, the borrower(s) will modify their initial
closing documents to their selected permanent mortgage. Usually, your builder offers to pay the interest payments during the construction phase.
Conventional Loan
Conventional loans are secured by government sponsored entities such as Fannie Mae and Freddie Mac. Conventional loans can be made to purchase or
refinance homes with first and second mortgages on single family to four family dwellings.
Fannie Mae and Freddie Mac's single family, first mortgage loan limit is $417,000 in 2006. This limit is reviewed annually and, if needed, changed to reflect
changes in the national average price for single family homes. The current loan limit applies to all conventional mortgages delivered after January 1, 2006.
In addition to common loan structures such as fixed rate, adjustable rate and balloon loans, Fannie Mae and Freddie Mac also have loan programs for low to
no down payments, community lending and affordable housing initiatives, construction to permanent, home improvement and reverse mortgages.
Conforming Loans
Conventional loans may be conforming and non-conforming. Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae
and Freddie Mac. These two stockholder-owned corporations purchase mortgage loans complying with the guidelines from mortgage lending institutions,
packages the mortgages into securities and sell the securities to investors. By doing so, Fannie Mae and Freddie Mac, like Ginnie Mae, provide a continuous
flow of affordable funds for home financing that results in the availability of mortgage credit for Americans.
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