Conforming Loans

Conforming Loans are Texas home loans that meet the conforming loan limits and guidelines set by Fannie Mae and Freddie Mac. The maximum conforming loan amounts for home mortgage loans are adjusted at the end of each year. These limits are displayed in the right hand column. Conforming loans include 1 to 4 unit residences to be used for your primary residence, a second home or for investment(rental) properties.

If you don't find the information you are looking for here, please email us with your questions.

Guidelines for Full Documentation Loans
Purpose Occupancy Units Max. LTV/
CLTV (4)
FICO
(1)
DTI
(2)
Purchase
and
Rate/Term
Refinance
Primary 1 95%/95% AU
---
640
Min.
AU
---
50%
Max.
(5)
2 80%/80%
3-4 80%/80%
Second Home 1 90%/90% (6)
Purchases Investment 1 80%/85% (3)
2-4 75%/75%
Rate/Term Refi Investment 1-4 75%/75%
Cash-Out
Refinance
Primary see Home Equity Loans
Second Home 1 75%/75% (3)
Investment 1 75%/75%
2-4 70%/70% (3)

Guidelines

Additional guidelines include:

  • Acreage -  No limit on most loan programs, provided an acceptable appraisal with comparable properties can be secured.
  • Assumable - No.
  • Bankruptcy or Foreclosure -- Other restrictions may apply. Documented extenuated circumstances may reduce these requirements. Contact us for more details.

    Chapter 7 or 11
    You must wait 4 years from the discharge date and have reestablished your credit. You must also show evidence that all debts not satisfied by the bankruptcy have been paid. A 680 minimum middle credit score is required.

    Chapter 13
    You must wait 2 years from the discharge date or 4 years from the dismissal date. You must also show evidence that all debts not satisfied by the bankruptcy have been paid. A 680 minimum middle credit score is required.

    Multiple Bankruptcies
    For borrowers with more than one bankruptcy filings in the past 7 years
    You must wait 5 years from the most recent dismissal or discharge date and have reestablished your credit. You must also show evidence that all debts not satisfied by the bankruptcy have been paid. A 680 minimum middle credit score is required.

    Foreclosure
    You must wait 7 years from the date of the foreclosure.

    Additional requirements apply for applications taken five (5) to seven (7) years from the completion date:

    • Purchase of a Primary Residence with a 10% minimum down payment (A Second Home or Investment Property is not allowed).
    • Required Loan Score = 680 for each borrower with significant adverse or derogatory credit caused by financial mismanagement.
    • Evidence on the credit report and other credit documentation that the borrower has reestablished an acceptable credit history.
    • Allowable Refinances: Rate/Term Refinances for any occupancy types (Cash-out Refinances are not allowed for any occupancy type).

    Short Sale
    You must wait 4 years from the date of the sale and have reestablished your credit. A 680 minimum middle credit score is required.

    NOTE: After a bankruptcy be sure to check your credit report for errors and correct inaccurate information. This can make a big difference in your credit scores and loan approval.

  • Buy-downs - Allowed on purchase loans only. Not allowed on ARM loans.
  • Closing Costs - It's best to submit our Pre-Qualification form for a Good Faith Estimate.
    The Owner's Title Insurance Policy, about 0.8% of the sales price, is also a fee normally paid by the seller when purchasing an existing home.

    When purchasing a new home from a builder the veteran should discuss these items to be sure if the builder will pay these fees, part of these fees or none of these fees. If the builder is not paying these fees, notify us so we can structure your loan properly to pay these fees and still provide you with the lowest interest rate possible.

    Many builders will encourage you to use their own mortgage company and may provide incentives to you if you do, i.e., pay points for you or pay for your Owner's Title Policy. We have found that most of the time we can still save you money and give you a better interest rate, even without the builder's incentives, so it's best to request a Good Faith Estimate from us to compare with the builder's offer. You may be pleasantly surprised.

  • Credit Scores - Our automated underwriting systems will determine if credit scores are sufficient for approval, however, credit scores below 740 now require a price adjustment to the rate and the minimum credit score allowed is now 620.

    The following adjustments are to the points. As a rule of thumb, 0.25% in points equals about 0.125% in the rate. So if you have to add 0.75% pt. your rate will go up about 0.375%, i.e., 7.0% to 7.375%..
Credit Score Adjustments to Points
All Loans with terms > 15 years
LTV's
(Loan to Value)
Credit Scores
(Lowest middle score of 3 or lower score of 2)
640 - 659 660 - 679 680 - 699 700 -719 720 - 739 >739
< 60% 0.50% 0% 0% -0.25% -0.25% -0.25%
60.01 - 70 1.25% 1.00% 0.50% 0.50% 0% 0%
70.01 - 75 2.625% 2.125% 1.25% 0.75% 0.25% 0%
75.01 - 80 3.00% 2.625% 1.75% 1.00% 0.50% 0.25%
80.01 - 85 n/a n/a n/a 1.00% 0.50% 0.25%
85.01 - 97 n/a n/a n/a 1.00% 0.50% 0.25%
Minimum credit score is 640.

Additional Credit Score Adjustments to Points
Cash-out Loans for Investment Properties & Second Homes
(Primary Residence cash-out - see Home Equity Loans below)
LTV's
(Loan to Value)
Credit Scores
(Lowest middle score of 3 or lower score of 2)
640-659 660-679 680-699 700-739 >739
< 60% 0.25% 0.25% 0% 0% 0%
60.01 - 75 1.25% 0.75% 0.75% 0.625% 0.25%
75.01 - 80 2.25% 1.50% 1.375% 0.75% 0.50%
Minimum credit score is 640.

  • Delayed Financing - Borrowers who purchased the subject property within the past six months (measured from the date on which the property was purchased to the disbursement date of the new mortgage loan) are eligible for a cash-out refinance if all of the following requirements are met.
    • The original purchase transaction was an arms-length transaction.
    • The borrower(s) may have initially purchased the property as one of the following:
      • a natural person;
      • an eligible inter vivos revocable trust, when the borrower is both the individual establishing the trust and the beneficiary of the trust;
      • an eligible land trust when the borrower is the beneficiary of the land trust; or
      • an LLC or partnership in which the borrower(s) have an individual or joint ownership of 100%.
    • The original purchase transaction is documented by a HUD-1 Settlement Statement, which confirms that no mortgage financing was used to obtain the subject property. (A recorded trustee's deed [or similar alternative] confirming the amount paid by the grantee to trustee may be substituted for a HUD-1 if a HUD-1 was not provided to the purchaser at time of sale.)The preliminary title search or report must confirm that there are no existing liens on the subject property.
    • The sources of funds for the purchase transaction are documented (such as bank statements, personal loan documents, or a HELOC on another property).
    • If the source of funds used to acquire the property was an unsecured loan or a loan secured by an asset other than the subject property (such as a HELOC secured by another property), the HUD-1 for the refinance transaction must reflect that all cash-out proceeds be used to pay down, if applicable, the loan (unsecured or secured by an asset other than the subject property) used to purchase the property. Any payments on the balance remaining from the original loan must be included in the debt-to-income ratio calculation for the refinance transaction. Note: Funds received as gifts and used to purchase the property may not be reimbursed with proceeds of the new mortgage loan.
    • The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan (subject to the maximum LTV/CLTV/HCLTV ratios for the transaction).
    • The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan (subject to the maximum LTV/CLTV/HCLTV ratios for the cash-out transaction based on the current appraised value).
    • All other cash-out refinance eligibility requirements are met and cash-out pricing is applied.
  • Eligible Borrowers - US Citizens, Permanent Resident Aliens and Non-Permanent Resident Aliens(Restrictions Apply)
  • Interest Rates - Conforming loans with 5% or more down will have the lowest rates. Zero down loans have slightly higher rates.
  • Loan Terms - 10, 15, 20, 25 & 30 year fixed rate loans and 1 yr, 3/1, 5/1, 7/1 & 10/1 ARM loans are available. The 3/1 & 5/1 ARM loans are most popular.
  • Manufactured(Mobile) Homes - No programs available.
  • Minimum Loan Amount - $75,000.
  • Mortgage Insurance - Loans greater than 80% LTV require mortgage insurance. We can use a 2nd lien to reduce the 1st lien to 80% LTV or less to eliminate the need for mortgage insurance. If mortgage insurance is used, the maximum DTI = 45% and the minimum middle credit score must be 660 or higher.
    MI is not required on 80/15/5 or 80/10/10 loans.
  • Number of Financed Properties Owned - No limit if the subject property is your Primary Residence.
    Second Homes or Investment Properties - The maximum number of financed properties you can own when purchasing or refinancing a  second home or an investment property is 4 properties, including your primary residence. BUT,

    Fannie Mae has amended this requirement to a maximum of 5 to 10 financed properties, including your primary residence, if the borrower meets certain requirements. At this time, none of our lenders have adopted these new guidelines. Click here to review these new requirements.Icon - Opens in New Window

  • Occupancy - Primary residences must be occupied within 60 days of closing.
Parents who want to provide housing for their physically handicapped or developmentally disabled adult children or for their elderly parents (who are unable to work or who have income that is not sufficient for them to qualify) will be able to purchase or refinance a single-family property for such children or parents and have it be considered a Primary Residence, even though the parent borrower will not be the occupant of the property.
Required Documentation
  • A letter of intent from all parties detailing the purpose of the purchase.
  • Evidence the elderly parent or disabled adult child has insufficient income to qualify.
  • Property Types - 1-4 unit homes, townhouse, approved Condos and PUDs.
  • Maximum Loan Amount - See Conforming Loan Limits in right-hand column.
  • Rent-Loss Insurance - Required on 1 - 4 unit investment properties. Required on 2 - 4 unit primary residence properties only if rental income is used to qualify. The coverage must be for at least 6 months rental income.
  • Seller Concessions
    90.01-95% LTV - 3% of the sales price.
    75.01-90% LTV - 6% of the sales price. (Including 80-15-5 or 80-10-10 loan programs)
    75% or less - 9% of the sales price.
  • 100% and 97% Financing - Not Available.
Note:
Guidelines subject to change without notice. Additional guidelines and restrictions may apply. Submit your loan application for approval.
Conforming Purchase Loan Rates
Rates based on $200,000 Loans
30 Year Fixed Loans
30 day lock.
15 Year Fixed Loans
30 day lock.
Rate Points APR Rate Points APR
3.875% 0.875% 4.000% 3.000% 0.790% 3.442%
4.125% -1.000% 4.252% 3.250% -0.230% 3.695%
4.375% -2.125% 4.503% 3.500% -1.359% 3.948%
Adjustments:
- Investment Property Fees -
-- LTV => 75% = add 2.0% pts
-- LTV > 75% to 80% = add 3.0 pts.
Adjustments:
See Credit Score Adjustments below.
2 - 4 units = add 1.0 pt.
Credit Score Adjustments to Points
All Loans with terms > 15 years
LTV's
(Loan to Value)
Credit Scores
(Lowest middle score of 3 or lower score of 2)
640 - 659 660 - 679 680 - 699 700 -719 720 - 739 >739
< 60% 0.50% 0% 0% -0.25% -0.25% -0.25%
60.01 - 70 1.25% 1.00% 0.50% 0.50% 0% 0%
70.01 - 75 2.625% 2.125% 1.25% 0.75% 0.25% 0%
75.01 - 80 3.00% 2.625% 1.75% 1.00% 0.50% 0.25%
80.01 - 85 n/a n/a n/a 1.00% 0.50% 0.25%
85.01 - 97 n/a n/a n/a 1.00% 0.50% 0.25%
Minimum credit score is 640.

Additional Credit Score Adjustments to Points
Cash-out Loans for Investment Properties & Second Homes
(Primary Residence cash-out - see Home Equity Loans below)
LTV's
(Loan to Value)
Credit Scores
(Lowest middle score of 3 or lower score of 2)
640-659 660-679 680-699 700-739 >739
< 60% 0.25% 0.25% 0% 0% 0%
60.01 - 75 1.25% 0.75% 0.75% 0.625% 0.25%
75.01 - 80 2.25% 1.50% 1.375% 0.75% 0.50%
Minimum credit score is 640.

Additional adjustments & restrictions may apply <> Contact us for an analysis and estimate
Notes for rates

Rates are subject to change without notice until locked in.
Rates on this Page Last Updated:
10/29/14 10.30 AM

Purchase Loan Application - This is a complete loan application and purchase questionnaire. It should take from 15 to 30 minutes to complete.
  • Click here Icon - Opens in New Window for a general list of information needed to complete your application.
  • After reviewing your application and credit report, your loan will be submitted for Automated Underwriting prior to calling you to discuss your application unless additional information is needed from you.
  • The results will be emailed to you with an estimate for your review. Rates are subject to change until locked in. Please call our office for details about locking your rate.
  • Your complete loan application and disclosure forms will be overnighted to you for your review and signatures, along with copies for your records. A written list of the required documents needed and a return overnight envelope will also be included for you to return the documents to us.
  • The only upfront costs to you are the credit report/AUS fee($50) & the appraisal fee($405 for a standard 1 unit primary residence). Click here for more details on the loan process.
Note: If for some reason your loan cannot be approved through our Automated Underwriting Systems and traditional underwriting is required, some additional costs may be required and you will be advised in advance. More details on "Traditional Underwriting" can be found here Icon - Opens in New Window.

Pre-Qualify

  • This is a short form that only takes a few minutes to complete.
  • It will give us the info we need to pre-qualify you according to your income, debts and funds available for down payment and closing costs.
  • The results will be emailed to you with an estimate for your review.
  • The Pre-Qualify form is primarily designed for borrowers with good credit since NO credit report will be pulled with this prequalification.

Email or call us if you need additional information.

FAQs

What is AU or automated underwriting?

These are computerized online systems used to approve loans. It is much faster, generally approves loans at higher loan to values and can reduce your mortgage insurance. Both Fannie Mae and Freddie Mac have AU systems and many large lender have their own AU systems.

Do I need a survey?

Yes. All title companies require a survey to insure the property. You can use the seller's existing survey if they will sign an affidavit that no changes have been made that would affect the survey and the survey is acceptable to the title company. For Refinancing, you can use your existing survey provided it meets the same requirements.

What is Hazard Insurance?

This is your homeowners insurance. It insures your property for damage, theft and liability. You should shop around with several companies to see who has the best rates and terms. You will need a one year policy. Month to month policies are not acceptable. If Refinancing, your current policy must have at least 60 days remaining at the time of closing or it must be renew to close the loan.

My credit scores are low. What should I do?

This will depend on why your credit scores are low. Submit your loan application to us so we can pull your credit and see if we can get your loan approved through AU. If not, it may be best to use a Credit repair agency that can correct and/or remove errors and problems on your credit report that are causing the low scores. This repair process can take several months, usually 2 to 6 months.
If you need help repairing your credit, contact us and we will refer you to HTDI Financial, a credit repair agency we work with. This could raise your credit scores significantly, but you should start several months before you are ready to purchase or refinance.

How fast can we close on my loan?

Purchase Loans
Most loans can be closed in 2 to 4 weeks, but we have closed in as little as 5 days. New Federal laws require you to wait 7 days from the date you receive the Truth In Lending before closing.
Refinance Loans
Usually 5-6 weeks. Refinancing your primary residence requires a 3-day Right of Recession, so the loan must be closed 5 days before the loan will actually fund.

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Conforming Loan Limits
One Unit $417,000
Two Unit $533,850
Three Unit $645,300
Four Unit $801,950
3-day Right of Recession

Required on Refinance loans only.
Texas homestead law provides for any borrower refinancing their homestead in Texas to have a grace period of 3 business days from the closing date to re-consider the terms of the refinance before the loan becomes final. Details Icon - Opens in New Window

Second Homes

A second home/vacation home is considered a primary residence, but not your homestead.

To qualify as a second home you must use it at least two weeks of the year and it cannot be rented. The location is also  considered. It can't be 3 blocks from your current home. It could be 5 miles away at the lake or beach.

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