By Richard Woodward – Certified Reverse Mortgage Specialist & Certified Divorce Lending Professional.  I have over 25 years of experience in the mortgage industry and I have helped over a thousand families purchase a home.  I am passionate about educating people about building wealth with real estate.

Why You Can Trust the Answers on This Page

Mortgage information online is often outdated, incomplete, or written by people who do not actively originate loans.

Every answer in this FAQ Center is based on current mortgage guidelines and real-world lending experience, not generic marketing content.

Here’s what makes this resource different:

Built by an Experienced Mortgage Professional

This FAQ Center was created by Richard Woodward, a licensed mortgage professional with more than 25 years of hands-on experience helping clients purchase, refinance, and retain homes — often in complex or high-stress situations.

Based on Published Loan Guidelines

The information throughout this page reflects current guidance from:

  • FHA / HUD

  • Fannie Mae

  • Freddie Mac

  • VA

  • USDA

  • Approved Non-QM lending programs

This approach ensures accuracy based on published standards, not opinion.

Specialized Expertise Where It Matters Most

Some mortgage questions are straightforward. Others are not.

This FAQ Center places special focus on areas where borrowers are most likely to receive incorrect or oversimplified advice online, including:

  • Reverse Mortgages

  • Reverse Mortgages for Purchase

  • Divorce Lending

  • Texas Owelty Liens

  • Self-Employed and Alternative Income Loans

These are not one-size-fits-all loan scenarios and require specialized knowledge and experience.

Updated for Today’s Mortgage Market

Mortgage guidelines, interest rates, and qualification standards change frequently. This FAQ Center is designed to be reviewed and updated regularly so the information remains current and relevant.

Written for Education, Not Pressure

This page is intended to educate first — not to push you into a loan decision.

If you choose to move forward, you will do so with clarity and confidence, not confusion.

Ready to Get Started?

Start your mortgage application, schedule your consultation, or explore loan options here.

For immediate assistance, call or text: (214) 945‑1066

You can use the search option to narrow your search to the program you have questions about.

REVERSE MORTGAGES

A Reverse Mortgage allows homeowners 62+ to convert home equity into tax-free funds without monthly mortgage payments. The loan is repaid when the home is sold, vacated permanently, or the borrower passes away.

Both borrowers (if both occupy) must be 62 or older, occupy the home as a primary residence, maintain taxes/insurance, and pass FHA financial assessment guidelines.

Yes. A Reverse Mortgage for Purchase lets you buy a home with 45–70% down and never make a monthly mortgage payment (property charges still required).

No. Heirs may refinance, sell, or walk away if the balance exceeds value. They are not personally liable.  With current lending limits, it is unlikely one would be underwater unless they are in the mortgage for 20-30 years, until then, heir get to keep any remaining equity.

It depends on your age, interest rates, home value, and FHA lending limits.

Line of credit, lump sum, term payments, tenure payments, or combinations.

DIVORCE LENDING & TEXAS OWELTY LIENS

(Certified Divorce Lending Professional)

A Texas Owelty Lien allows one spouse to access equity from the marital home to buy out the other, secured via a deed and repaid through refinance/sale.

No. Owelty refinances have better LTV treatment under Texas law.

Divorce decree, Owelty agreement, deed updates, survey (if required).

We review child support, alimony, assets, credit, and alternative programs.  We will exhaust all of your available 270 lenders before we tell you that you don’t qualify.  If a spouse cannot qualify, then usually the court will order the home to be sold.

Yes, but anything beyond the Owelty amount is treated as a standard Texas cash-out loan.

Yes, including inherited property partitions.

BANK STATEMENT / SELF-EMPLOYED HOME LOANS

A loan using 3–24 months of bank statements instead of tax returns.  We use the deposits and add an expense ratio to calculate the income

Self-employed borrowers with stable deposits.

Typically 600–660+ depending on program.

 
 

Yes. We apply expense factors or CPA letters.

10–20% in most cases.

FIRST-TIME HOME BUYER PROGRAMS

Anyone who hasn’t owned a home in 3 years.

Yes—0% to 3.5% options available.

 
 
 

Yes including grants, MCC credits, investor sponsored, and state-sponsored help.

 

Not necessarily—lenders use favorable calculation methods.  Each case is unique but FHA, VA, and USDA uses .5% of the balance as the payment if it is not reported on the credit report.

 

Some programs require a short online course.

 

3% DOWN PAYMENT HOME LOANS

First-time buyers or even repeat buyers the qualify with low to moderate income.

620+ for some borrowers, however they would need compensating factors.  Normally, this program request somewhere around a 680+ credit score.

 
 
 

Yes—100% allowed from a family member or a co-habitating partner. 

 

No—primary residence only.

 

Yes, removable at 20% equity.

 

HOMEREADY HOME LOANS

A low-down-payment Fannie Mae program with reduced mortgage insurance.

Yes based on location and the median area income limits.

 
 
 

The Fannie Mae HomeReady mortgage program allows you to use boarder income to qualify, up to a maximum of 30% of your total qualifying income.  

 

To properly document this boarder income, you must provide the following:

  • Payment History: Documentation showing the boarder has paid rent for at least 9 of the most recent 12 months.  

     

    • The income used for qualifying will be the payments averaged over a full 12-month period.  

       

    • Acceptable documentation includes copies of canceled checks or records of online payment transfers. Cash payments are typically difficult to document and are not acceptable on their own.  

       

  • Shared Residency History: Documentation proving that the boarder has shared residency with you for a minimum of the most recent 12 months.  

     

    • Examples of this documentation include a copy of a driver's license, a bill, or a bank statement that shows the boarder's name and the same address as the borrower's address.  

       

The boarder must also plan to live with you and continue paying rent at the new property, which your lender will likely require you to confirm with a signed statement.  

 
 

Yes, First-Time Homebuyer education is generally required for the Fannie Mae HomeReady loan program.  

 

Here are the specific details regarding the education requirement:

  • When it is Required: Homeownership education must be completed by at least one borrower if all occupying borrowers are first-time homebuyers. This requirement applies regardless of the loan-to-value (LTV) ratio.  

     

  • What is Acceptable: The course must be from a qualified provider, meaning the content aligns with National Industry Standards (NIS) or is offered by a housing counseling agency approved by the U.S. Department of Housing and Urban Development (HUD).  

     

  • Recommended Course: The Fannie Mae HomeView course is a free online option that fulfills this requirement and provides a certificate of completion.  

     
  •  
 

Yes, the Fannie Mae HomeReady loan program is condo-friendly.  

 

Condominium units are an eligible property type under the HomeReady program, along with:  

  • Single-family homes (1-4 units)  

     

  • Townhomes  

     

  • Planned Unit Developments (PUDs)  

     

  • Manufactured housing (must meet MH Advantage requirements)

Key Condo Requirements to be aware of:

  • Primary Residence Only: The property must be your principal residence; HomeReady cannot be used for investment properties or second homes.  

     

  • Fannie Mae Review: The condo project itself must generally meet Fannie Mae's established guidelines and approval standards, which your lender will verify through a process called a project review.

  • High LTV Restriction: For loan-to-value (LTV) ratios greater than 95%, certain restrictions may apply, so your specific down payment amount can affect eligibility rules.  

     
 

TEXAS CASH-OUT REFINANCE 50(A6)

A refinance allowing equity access within Texas constitutional limits that include one may only have on cashout mortgage at a time on ones homestead.

Up to 80% of the homes appraised value.

 
 
 

No. Any equity access makes it a 50(A)6 cashout. Only one cashout is allow at a time.  However, one my have a rate and term first mortgage and then obtain a home equity loan or HELOC as a second cashout mortgage.

 

  • Yes, you can convert an existing Texas Section 50(a)(6) home equity loan (a cash-out refinance) into a non-equity rate and term refinance later on. This conversion is done under a specific provision of the Texas Constitution, Section 50(f)(2).  

     

    Here is how the conversion works and the main requirements:

    How to Convert a 50(a)(6) to a Rate and Term (50(f)(2))

    The conversion is accomplished through a new refinance loan, often called a Texas 50(f)(2) Conversion Refinance or a Non-Equity 50(a)(4) loan (as referred to by some agencies like Fannie Mae).

    1. Apply for a Refinance: You apply for a new loan with a lender that specifically handles this type of Texas refinance.

    2. No Cash Out: The new loan must be a true rate and term refinance, meaning you cannot receive any cash back at closing, other than what is necessary to pay closing costs and escrow reserves. The proceeds can only be used to pay off the existing 50(a)(6) lien and other valid liens on the property.  

       

    3. Lender Provides Notice: The lender must provide you with a written disclosure (a special 12-day notice required by Section 50(f)(2)(D) of the Texas Constitution) no later than the third business day after you submit your application and at least 12 days before the closing.

    4. Closing and Recording: Once the loan closes, an Owner's Affidavit confirming the conversion to a non-equity loan (under Section 50(f-1)) is typically signed and recorded.  

       

    Key Requirements for the Conversion

    • 12-Month Waiting Period (Seasoning): The new 50(f)(2) conversion refinance loan must close more than 12 months after the closing date of the original 50(a)(6) loan you are refinancing.

    • 80% Loan-to-Value (LTV) Cap: The total amount of all debts secured by your homestead (the new loan plus any other valid liens) cannot exceed 80% of the fair market value of the property at the time of the refinance.  

       

    • Loss of Protections: It's important to understand that converting to a non-equity loan means you lose some of the special consumer protections afforded by a 50(a)(6) loan, such as the constitutional prohibition against foreclosure without a court order. Lenders are required to provide notice of this loss of protection.  

       

    Consulting with a licensed Texas mortgage loan officer or real estate attorney is highly recommended to ensure all the strict constitutional and federal guidelines for the 50(f)(2) conversion are met.

 

Often yes due to added requirements.

 

USDA HOME LOANS

A USDA Home Loan, officially known as the USDA Rural Development Guaranteed Housing Loan Program, is a government-backed mortgage designed to promote homeownership in rural and eligible suburban areas. It is offered by the U.S. Department of Agriculture (USDA).

The key feature that makes this loan highly attractive is the zero-down-payment requirement, allowing qualified low- to moderate-income borrowers to finance up to 100% of the property's value.  

 

 

 
 
 

Here is a breakdown of the key qualification requirements for the most common type, the USDA Guaranteed Loan:

1. Borrower Eligibility (Your Financials)

  • Income Limits: Your total household income (for all adults over 18 living in the home) cannot exceed 115% of the median household income for the specific county where the property is located.  

     

    • Note: The USDA allows for certain deductions (like for dependents or childcare) when calculating this final qualifying income.  

       

  • Credit Score: While the USDA does not set a hard minimum, most approved lenders require a minimum credit score of 640 for automated underwriting. Scores as low as 600 may be considered, but will likely require more documentation and manual review.  Check with your lender to make sure they can work with your credit score.  NEXA Lending will work with 600+  

     

  • Debt-to-Income (DTI) Ratio: You need to demonstrate the ability to repay the loan. Lenders typically look for a DTI ratio (monthly debt payments compared to gross monthly income) of 41% or less for automatic approval.  

     

  • Occupancy: You must agree to occupy the home as your primary residence (not a second home or investment property).  

     

  • Citizenship: You must be a U.S. Citizen, U.S. non-citizen national, or a qualified alien/permanent resident.  

     

 

 

Property Eligibility (The Home's Location and Condition)

    • Location: The home must be in an area designated as rural by the USDA. These areas are typically outside of major metropolitan centers, though many suburban and small-town areas qualify. You can check a specific address using the USDA's Property Eligibility Map.  

       

    • Condition: The home must meet the USDA's Minimum Property Requirements (MPRs) for safety, structure, and habitability. The appraisal process ensures the home is structurally sound, accessible, and has functional systems (like heating, plumbing, and electrical).  

       

    • Property Type: Eligible properties include single-family homes, certain condominiums in USDA-approved projects, Planned Unit Developments (PUDs), and manufactured homes that meet specific HUD standards.

    • No Income-Producing Activity: The property cannot be used for income-producing activities or as a commercial farm.

 

USDA Home Loans are an excellent and often ideal option for homes not located in the city. In fact, the program is specifically designed for properties in eligible rural and certain suburban areas, and properties in major urban centers are generally excluded.  

 

JUMBO HOME LOANS

A Jumbo Loan is a home mortgage that exceeds the maximum loan limits set by the Federal Housing Finance Agency (FHFA) for conventional mortgages, which are eligible for purchase by Fannie Mae and Freddie Mac.  

Because they exceed these federal limits, they are considered non-conforming loans and are often used to finance high-priced homes in expensive real estate markets.  

 

 

The credit score required for a Jumbo Home Loan is significantly higher than for a standard conventional mortgage, but it can vary by lender and the specific details of the loan. However, at NEXA Lending we can offer Jumbo Home loans with scores as low as 600.

 
 
 

The down payment needed for a Jumbo Home Loan typically ranges from 10% to 20% of the home's purchase price, though it can vary significantly by lender.  

 

Yes, cash reserves are almost always required for Jumbo Home Loans and are one of the most critical parts of the qualification process.  

Often 6–12 months of Principal Interest Taxes and Insurance.

 

Yes with strong or alternative documentation.

 

FHA HOME LOANS

3.5% at 580+ score.

Yes, down to 500 with 10% down.

 
 
 

Yes, you absolutely can get an FHA Home Loan after a bankruptcy, but you must observe a mandatory waiting period that depends on the type of bankruptcy you filed.

The FHA (Federal Housing Administration) has specific, lenient guidelines compared to conventional mortgages, making it a common path for homeownership after financial setback.

FHA Waiting Periods After Bankruptcy

The waiting period begins on the discharge date (not the filing date) of the bankruptcy.

Bankruptcy Type Standard Waiting Period Exception (Shortened Wait) Key Requirements During Wait
Chapter 7 (Liquidation) 2 years from discharge 1 year from discharge Must demonstrate the bankruptcy was caused by extenuating circumstances (e.g., severe illness, job loss, death of a wage earner) and have re-established good credit.
Chapter 13 (Reorganization) 1 year into the repayment plan or immediately after discharge N/A Must have made at least 12 months of on-time payments on the repayment plan and receive written approval from the bankruptcy court or trustee to enter into the mortgage.
 

Other Key Requirements

Regardless of the bankruptcy type, you must also meet the standard FHA loan requirements:

  • Re-establish Credit: You must show that you have managed your new or existing credit responsibly since the bankruptcy.

  • Credit Score: You typically need a minimum credit score of 580 for a 3.5% down payment. Scores between 500 and 579 may qualify with a 10% down payment.

  • Letter of Explanation: You will need to provide your lender with a written explanation detailing the circumstances that led to the bankruptcy and what steps you have taken to stabilize your finances since then.

If you are currently making payments under a Chapter 13 plan, you may be able to secure an FHA loan sooner than many other mortgage types allow.

Would you like to know more about the documentation you would need to prove extenuating circumstances for an early application?

 
 
 
 
 

Yes, absolutely! Gift funds are not only allowed but are a key feature of the FHA loan program, making homeownership more accessible, especially for first-time buyers.  

You can use gift funds to cover the entire down payment (typically 3.5%) and all or part of your closing costs and financial reserves.  

Here are the critical guidelines you must follow when using gift funds for an FHA loan:

1. Acceptable Donors

The funds must come from an approved source with no financial interest in the sale of the property. Approved donors include:  

  • Family Members: Related by blood, marriage, adoption, or legal guardianship (parents, siblings, grandparents, etc.).  

     

  • Employer or Labor Union.

  • Close Friend: Must have a clearly defined and documented interest in the borrower and a verifiable, long-term relationship.  

     

  • Charitable Organization or a Government Agency providing down payment assistance.  

     

Yes, Mortgage Insurance Premium (MIP) is required for all FHA Home Loans, regardless of the size of your down payment. This is one of the main distinctions between an FHA loan and a conventional loan.  

MIP is paid to the Federal Housing Administration (FHA) and serves to protect the lender in case you default on the loan.  

There are two parts to the FHA's mortgage insurance requirement:  

  1. Upfront Mortgage Insurance Premium (UFMIP):

    • This is a one-time fee, currently 1.75% of the loan amount, which is typically paid at closing.  

       

    • You have the option to finance this fee by rolling it into your mortgage loan balance.  

       

  2. Annual Mortgage Insurance Premium (Annual MIP):

    • This is a recurring yearly fee, paid in 12 monthly installments as part of your regular mortgage payment.  

       

    • The rate for the Annual MIP typically ranges from 0.15% to 0.75% of the loan balance, but most borrowers pay 0.55% (as of 2025) if they have the minimum 3.5% down payment on a standard 30-year term.  

       

Duration of Annual MIP

How long you have to pay the annual MIP depends on your down payment:

  • Less than 10% Down: You must pay the annual MIP for the entire loan term (or until you refinance out of the FHA loan).  

     

  • 10% or More Down: You must pay the annual MIP for a minimum of 11 years.  

     
 

RENOVATION LOANS – FHA 203K

An FHA 203(k) mortgage is a specialized, government-insured loan that allows you to finance both the purchase (or refinance) of a home and the cost of its renovation or repair with a single mortgage.  

This loan is often called a "rehab loan" or "renovation loan." It is specifically designed for properties that need work but may not qualify for standard financing because of their condition.

  1. Single Loan, Two Purposes: You get one loan with one monthly payment that covers the purchase price plus the renovation expenses.4

  2. Appraisal on After-Improved Value: The loan amount is based on the appraised value of the home after all the planned improvements are completed, allowing you to borrow more than the current market value.5

  3. Renovation Escrow: The renovation funds are placed into an escrow account and disbursed to the contractor in draws as the work is completed and verified by inspections.6

Two Types of FHA 203(k) Loans

There are two versions to fit different repair needs:7

Loan Type Purpose and Scope Key Features
Limited 203(k) (or Streamline) For minor remodeling and non-structural repairs. Maximum repair cost is typically $75,000. No minimum repair cost. Does not require a HUD consultant.
Standard 203(k) (or Full) For extensive rehabilitation, including major structural work (e.g., foundation repair, moving load-bearing walls, adding a room). Minimum repair cost is $5,000. Requires the use of a HUD-approved 203(k) Consultant to oversee the project.
 
 
 

The FHA 203(k) mortgage allows for a wide range of repairs and improvements, from minor cosmetic upgrades to major structural rehabilitation. The qualified repairs depend on whether you use the Limited or Standard 203(k) loan.  

1. Limited 203(k) Loan (For Minor Repairs)

This loan is for smaller projects with a repair maximum generally limited to $75,000. It is intended for non-structural work.  

  • Cosmetic Upgrades: Interior and exterior painting, replacing flooring (carpet, tile, hardwood).  

     

  • System Upgrades: Replacing or upgrading existing HVAC, plumbing, or electrical systems.  

     

  • Safety/Functionality: Repairing or replacing roofs, gutters, and downspouts; installing a well or septic system.  

     

  • Accessibility & Energy: Making accessibility improvements for disabled persons or installing energy-efficient upgrades like new windows and doors.  

     

  • Appliances: Purchasing and installing new kitchen appliances (stove, refrigerator, dishwasher) or washers/dryers.  

     

2. Standard 203(k) Loan (For Major Structural Repairs)

This loan is for more complex projects that must cost at least $5,000 and have no upward limit other than the FHA maximum loan limit for your area. It requires a HUD-approved consultant.  

  • Structural Work: Foundation repair or replacement, fixing or replacing load-bearing walls, or repairing damage caused by pests like termites.  

     

  • Room Additions: Adding a new bedroom, bathroom, second story, or expanding the kitchen or living room.  

     

  • Health and Safety: Lead-based paint removal, asbestos abatement, or mold remediation.  

     

  • Major Site Improvements: Exterior grading, significant landscaping work, or connecting to public water/sewer systems.  

     

  • Reconstruction: Demolishing an existing structure and rebuilding it, provided the original foundation remains intact.  

     

Repairs That Are NOT Allowed

 

The FHA 203(k) loan generally will not cover luxury items or anything that is not a permanent part of the home. These often include:  

  • Building a new swimming pool (repairs to an existing pool are allowed).

  • Adding an exterior hot tub, sauna, or outdoor fireplace/BBQ pit.  

     

  • Adding non-essential items like a satellite dish, tennis court, or high-end decorative murals.  

     

  • Repairs intended solely to support commercial use of the property.

No, only a licensed and professional contractor. 

Yes, you absolutely can refinance your current home using an FHA 203(k) mortgage to fund renovations.  

 

The FHA 203(k) program is designed for this exact purpose, allowing you to combine your existing mortgage debt and the cost of repairs and improvements into a single new loan with one monthly payment.  

 
 

HOMESTYLE RENOVATION

The HomeStyle Renovation home loan is a conventional mortgage product offered by Fannie Mae that allows you to finance both the purchase or refinance of a home and the cost of its renovations, repairs, or improvements with a single loan and one monthly payment.   

It is often considered a conventional alternative to the FHA 203(k) loan.

Yes, a new in-ground swimming pool installation is allowed with a Fannie Mae HomeStyle Renovation home loan.

The HomeStyle loan is very flexible and permits both essential repairs and luxury improvements, as long as the improvements are permanently affixed to the property and add value.  

Yes, investor properties (non-owner occupied) are allowed to use the Fannie Mae HomeStyle Renovation home loan.

This is a key advantage of the HomeStyle loan over the FHA 203(k) loan, which is strictly limited to primary residences.  

 

10–20% of the construction budget, and if an investment property, payment reserves are sometimes required.

Yes, refinancing is allowed with the HomeStyle Renovation mortgage.

This loan is designed to finance renovations for both the purchase of a new home and the refinance of an existing loan to include the costs of repairs and improvements.  

 

CONVENTIONAL HOME LOANS

The HomeStyle Renovation home loan is a conventional mortgage product offered by Fannie Mae that allows you to finance both the purchase or refinance of a home and the cost of its renovations, repairs, or improvements with a single loan and one monthly payment.   

It is often considered a conventional alternative to the FHA 203(k) loan.

Yes, a new in-ground swimming pool installation is allowed with a Fannie Mae HomeStyle Renovation home loan.

The HomeStyle loan is very flexible and permits both essential repairs and luxury improvements, as long as the improvements are permanently affixed to the property and add value.  

Yes, investor properties (non-owner occupied) are allowed to use the Fannie Mae HomeStyle Renovation home loan.

This is a key advantage of the HomeStyle loan over the FHA 203(k) loan, which is strictly limited to primary residences.  

 

10–20% of the construction budget, and if an investment property, payment reserves are sometimes required.

Yes, refinancing is allowed with the HomeStyle Renovation mortgage.

This loan is designed to finance renovations for both the purchase of a new home and the refinance of an existing loan to include the costs of repairs and improvements.  

 

VA HOME LOANS

The HomeStyle Renovation home loan is a conventional mortgage product offered by Fannie Mae that allows you to finance both the purchase or refinance of a home and the cost of its renovations, repairs, or improvements with a single loan and one monthly payment.   

It is often considered a conventional alternative to the FHA 203(k) loan.

Yes, a new in-ground swimming pool installation is allowed with a Fannie Mae HomeStyle Renovation home loan.

The HomeStyle loan is very flexible and permits both essential repairs and luxury improvements, as long as the improvements are permanently affixed to the property and add value.  

Yes, investor properties (non-owner occupied) are allowed to use the Fannie Mae HomeStyle Renovation home loan.

This is a key advantage of the HomeStyle loan over the FHA 203(k) loan, which is strictly limited to primary residences.  

 

10–20% of the construction budget, and if an investment property, payment reserves are sometimes required.

Yes, refinancing is allowed with the HomeStyle Renovation mortgage.

This loan is designed to finance renovations for both the purchase of a new home and the refinance of an existing loan to include the costs of repairs and improvements.  

 

Bridge Loans

A bridge loan (also known as a gap or swing loan) is a short-term financing option used to provide immediate cash flow during a transitional period, most commonly in real estate.  

Its purpose is to "bridge the gap" when you need money for a new purchase but the funds from your existing asset (like your current home's equity) are not yet available.  

 

 

That depends on which type of loan you are asking about, as the term lengths are very different for the two loans we discussed: Bridge Loan Term Length

Bridge loans are designed to be short-term solutions.

  • Typical Range: The term is usually six to twelve months.

  • Maximum: Some lenders may offer terms of up to one year or, in rare cases, up to three years, but they are always intended as a temporary measure.

  • Repayment: The loan is typically repaid in one lump sum (a balloon payment) when your current home sells or when you secure longer-term financing.

 

Generally, yes, you must qualify to carry the financial burden of both homes for a period of time, even with a bridge loan.   At NEXA Lending, I have multiple types of bridge loans, we will find the one that works for you. 

When you apply for a bridge loan and a new mortgage, the lender assesses your ability to pay all of your potential obligations at once.

Here are the key financial components they evaluate:

  • New Mortgage Payment: The full monthly payment for the home you are buying.

  • Existing Mortgage Payment: The full monthly payment for the home you are selling.

  • Bridge Loan Payment: This is typically an interest-only payment (or sometimes no payment for a deferment period), but the lender still factors the potential monthly cost into your qualifications.  

     

Yes, generally bridge loan interest rates are higher than those for traditional, long-term mortgages (like a 30-year conventional or VA loan).  

This higher cost is primarily due to the nature of the bridge loan:  

  • Short-Term Duration: Bridge loans are temporary, typically lasting only six to twelve months. Lenders charge a higher rate because they need to be compensated for providing capital quickly for a very short period.  

     

  • Increased Risk: The lender takes on greater risk because the repayment of the bridge loan is contingent upon the sale of your current home. If your house doesn't sell within the loan term, the repayment is delayed, which increases the lender's exposure.   

     

  • Fast Funding: The quick approval and funding process, often bypassing the lengthy underwriting of a traditional mortgage, also contributes to the higher cost.   

     

Bridge loan rates typically range higher than conventional mortgage rates, and can sometimes be 2% or more above the prime rate. In addition to the higher interest rate, you must also factor in closing costs and origination fees, which can run from 1% to 3% of the loan amount.

The borrower accepts these higher short-term costs for the convenience, speed, and flexibility it provides when buying a new home before selling their old one.

Ideally, that is what it is designed to do.

 

DIVORCE & MORTGAGE GUIDANCE

Yes, once it has been received for 12 months and if it will continue for at least 36 months.

 

Yes, but payment history still applies and can affect the credit score.  It is good to be removed from these accounts ASAP - unless you need good credit history.  Discuss this with me to make sure.

Yes, but it is not recommended in a community property state.  The exiting spouse will still have ownership of the home and if their income is used, they will remain on the mortgage.

Immediately if qualified.

Whichever spouse qualifies and if the court allows it.

 

An owelty lien is a legal tool that allows divorcing spouses to divide the equity in a marital home without forcing a sale. It is a lien placed on the property by court order, requiring the spouse who is keeping the home to pay the departing spouse their equitable share of the home's value.

The biggest benefit is that it allows the spouse keeping the home to access more equity through a refinance than a standard cash-out loan would permit. In many states, especially Texas, an owelty refinance may allow borrowing up to 95% of the home's value, avoiding the stricter 80% loan-to-value (LTV) limits and potentially higher interest rates associated with a standard cash-out refinance.  However, not all lenders are experienced in this technique and me give you wrong information.  I and an expert, I can guide you with the real rules.

Yes, refinancing is almost always necessary and is often mandated by the divorce decree. The refinance serves two critical purposes:

  • It provides the funds to pay off the owelty lien (the departing spouse's equity share).

  • It removes the departing spouse's name from the existing mortgage liability, giving both parties a clean financial break.

Yes, they must qualify for the new mortgage individually. Lenders assess the retaining spouse's sole income, credit score, and debt-to-income (DTI) ratio to ensure they can afford the full monthly payment of the new, larger loan (which includes the old mortgage balance plus the owelty amount).

To properly establish and close an owelty refinance, the lender will require specific documents that must be properly recorded with the county:

  • The Final Divorce Decree that specifically orders the partition of the property and imposes the owelty lien.

  • A Deed (often called a Special Warranty Deed with Owelty of Partition) to transfer the property entirely to the retaining spouse.

My team can handle this for you if your attorney did not complete this task.

NO INCOME VERIFIED MORTGAGE

A mortgage that does not require one's income to be used to make a lending commitment.  Not all lenders offer this but I do.

 

 

Self-employed and high-asset buyers or anyone with high credit scores and at least 20% down or 25% equity.

Yes, rates are typically higher on No-Income-Verified (Non-Qualified Mortgage or Non-QM) loans compared to traditional mortgages like Conventional or FHA loans.  

The main reason for the higher interest rate is the increased risk the lender takes on when they cannot verify your income using standard documentation (like W-2s or tax returns)

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The down payment requirement for No-Income-Verified (Non-QM) mortgages is significantly higher than for traditional mortgages, as the larger down payment helps mitigate the lender's risk.  

While the exact percentage varies by lender, the borrower's credit score, and the specific loan program, here are the typical ranges:

  • Minimum Down Payment: You can expect a minimum down payment of 20% to 30% for many Non-QM loans.  

     

  • Most Common Down Payment: For the most flexible "no-doc" type loans, lenders often require 20% to 30% or more. A down payment of 30% or more is often cited as a requirement to qualify for the best terms on certain no-doc programs

Yes, they are allowed.

 

MANUFACTURED & MOBILE HOME LOANS

The type of financing depends heavily on whether you own the land:

  • Traditional Mortgages (Real Property): Conventional, FHA Title II, VA, and USDA loans are available if the home is permanently affixed to land you own and is legally classified as real estate. These offer lower rates and longer terms (15-30 years).

  • Chattel Loans (Personal Property): These are specialized loans for homes not attached to owned land (like homes in a leased manufactured home community). They function more like auto loans with higher interest rates.

 

 

The credit score requirement depends on the loan type:

  • Traditional Mortgages: Often require a minimum credit score of 620 or higher (for conventional loans) or 580 or lower (for FHA loans, depending on the down payment).

  • Chattel Loans: Minimum credit scores can be slightly lower, with many lenders looking for a score of 600 or higher . Generally, higher credit scores lead to lower interest rates

The down payment varies significantly based on the loan program:

  • VA Loans: Eligible veterans can often purchase a manufactured home with no down payment (0%) if it's permanently affixed to owned land.

  • FHA Loans (Title II): Requires a minimum down payment of 3.5%.

  • Conventional & Chattel Loans: Down payments typically range from 3% to 35% of the purchase price, with 5% often being the minimum for new homes

Most lenders, especially those offering FHA or conventional financing, require the home to be relatively modern and safe:

  • HUD Code: The home must have been built on or after June 15, 1976, and meet the HUD Manufactured Home Construction and Safety Standards (the "HUD Code").

  • Real Property: For traditional mortgages, the home must be permanently installed on a permanent foundation and legally converted to real property

Yes, interest rates for manufactured home financing are generally higher than those for equivalent site-built homes. This is because:

  • Collateral Risk: Lenders perceive manufactured homes, especially those on leased land (chattel loans), as posing a higher risk.

  • Chattel Loans: If the home is financed as personal property, the rates are comparable to vehicle loans and are significantly higher than real estate mortgages

 

ONE-TIME CLOSE CONSTRUCTION LOANS

The main advantage is simplicity and reduced cost/risk. You only go through one application, one qualification process, and one closing, which saves you from paying duplicate closing costs and protects you from the risk of rising interest rates during the construction period

Yes. One of the key benefits of an OTC loan is that you typically lock in the interest rate for the final permanent mortgage at the time of the initial closing, before construction even begins. This eliminates the uncertainty of market changes while your home is being built.

The down payment requirement varies based on the loan type:

  • VA One-Time Close: Eligible veterans and service members can often qualify for 0% down.

  • FHA One-Time Close: Requires a minimum down payment of 3.5%.

  • Conventional One-Time Close: Typically requires a down payment of 5% to 20% or more.

  • Note: If you already own the land, the equity in the land can often be used toward the down payment

During the construction phase, your payments are generally interest-only. You only pay interest on the money that has actually been disbursed (drawn) to the builder to cover completed work. Once the home is finished and the loan automatically converts to the permanent mortgage, your regular principal and interest payments begin.

However, it depends on the loan program type. Double check with your lender to make sure.

The lender must approve the builder (who must be licensed and insured) before closing.
 
Funds are then released in stages called draws. Before each draw is disbursed to the builder, the lender requires an inspection to verify that the work associated with that phase (e.g., foundation, framing) has been completed according to the approved plans and local codes

1099 Mortgage Programs

Loans for self-employed borrowers, even those recently switching from w-2 to 1099 income.  Normally contractor or commissioned employees.

Depending on the lender, the borrower can use up to 100% of the reported 1099 income.

Self-employed, commission only, independent contractors.

Note: the 1099 form can be uses to document income rather than tax returns. 

Often required but varies from lender to lender.  I shop for you to find which lender best meets your needs.

The rates are often higher but varies from lender to lender.  I shop for you to find which lender best meets your needs.

REVERSE MORTGAGE FOR PURCHASE, FHA HP4

The HECM for Purchase requires a significant upfront investment, which acts as the down payment. The required amount is calculated by HUD and typically ranges between 29% and 70% of the home's purchase price. This percentage is not fixed; it is determined by the age of the youngest borrower (or eligible non-borrowing spouse), the current interest rate, and the lesser of the home's appraised value or purchase price

To qualify for an FHA HECM for Purchase, all borrowers must meet the following basic criteria:

  • Be 62 years of age or older (with an exception for an eligible non-borrowing spouse, not applicable in Texas as all borrowers must be 62 or older).

  • Occupy the home being purchased as their primary residence within 60 days of closing.

  • Demonstrate the financial capacity and willingness to pay ongoing property charges (property taxes, homeowner's insurance, and HOA dues).

  • Complete a mandatory counseling session with a HUD-approved HECM counselor

  • Must meet minimum residual income standards, varies by location. For Texas you need a minimum residual income of $529/month for a single borrower or $886/month for a couple

Unlike a traditional mortgage where you borrow a large sum and pay it back monthly, the HECM for Purchase uses the upfront funds (your down payment) and the loan to pay the seller for the new home.

You are not required to make monthly principal or interest payments for as long as you live in the home and meet the loan obligations.   However, you must pay the taxes, insurance, HOA, and maintain the home.

Yes, the FHA HECM is a non-recourse loan. This means the borrower and their heirs will never owe more than 95% of the home's appraised value when the loan is repaid.

If the loan balance exceeds the home's value at the time the loan becomes due, the FHA's mortgage insurance covers the difference.

The costs for an H4P include standard closing costs found in any mortgage, plus FHA-specific fees that can be financed into the loan:

  • Initial Mortgage Insurance Premium (MIP): 2% of the lesser of the property's value or the FHA HECM lending limit.

  • Annual MIP: 0.5% of the outstanding loan balance charged monthly.

  • Origination Fee: Capped by HUD, typically a percentage of the loan amount.

  • Standard Closing Costs: Appraisal fee, title insurance, recording costs, etc.

op benefits:

  • Buy a more expensive home with half the cash of a cash purchase

  • Keep more money liquid for retirement security

  • No monthly mortgage payments required

  • Protection from housing market downturns (non-recourse)

  • Improves retirement cash flow

  • Allows seniors to “right-size” into a more functional home

For many retirees, H4P preserves savings while improving lifestyle quality.

No.
This is one of the biggest myths.

With an FHA HECM:

  • You retain full title and ownership.

  • The lender only has a lien—just like a regular mortgage.

The loan becomes due only when:

  • The last borrower passes away,

  • Moves out for 12+ months,

  • Sells the home, or

  • Fails to meet occupancy/tax/insurance obligations.

It is also a non-recourse loan, meaning:

You or your heirs will never owe more than the home is worth.

Yes — but with important conditions.
H4P eliminates mandatory mortgage payments as long as:

  • You live in the home full time

  • You pay your property taxes

  • You maintain homeowner’s insurance

  • You pay HOA dues

  • You keep the home in good condition

You can choose to make voluntary payments to reduce the balance, but it’s not required.

A Reverse Mortgage for Purchase — officially called HECM for Purchase (H4P) — allows homebuyers age 62 or older to buy primary residence using a large down payment + reverse mortgage, without having mandatory monthly mortgage payments.

You still must:

  • Pay taxes, insurance, and HOA dues

  • Live in the home as your primary residence

  • Maintain the property

Your down payment usually comes from the sale of your previous home or from savings, while the reverse mortgage covers the rest.