Recent mortgage changes are now allowing more low down payment loan options in Louisiana. In this post, we will discuss all the New Orleans Jumbo and Government loan highlights. Be sure to click on the loan programs tab above to learn more about any individual program.
Jumbo Mortgage Options:
Buyers purchasing in more expensive locations will be pleased to learn about new Jumbo financing options up to 95% loan to value. Jumbo mortgages are those that go beyond standard conforming loan limits. In Louisiana, the conforming loan limit is set to $484,350. In years past luxury home buyers were restricted to only higher down payment Jumbo programs of 20% or more. Today, many new options permit down payments as low as 10% and even 5% down. Let’s take a closer look at the requirements.
- The property should a primary residence or second home, investment and rental homes are not permitted.
- Buyers should have sufficient credit and understand the loan amount limits for each down payment bracket. 95% financing requires a min 700 credit score, with a loan limit of 2mil. 90% financing is limited to loan amounts below 3mil. Credit score should be above 720 when financing over $1.5mil. Lower credit score down to 660 can be approved when the loan amount is below $1.5mil with 10% down.
- Buyers should have a solid employment history along with the ability to document all their income and assets. Debt to income ratio limits do apply, as this is this is the case with most mortgage programs today.
- All jumbo programs are available to eligible first time home buyers.
- Refinance transactions (no cash out) are also permitted up to 95 percent. Cash out refi permitted up to 90 percent.
- Buyers can pick from an assortment of fix rate and adjustable rate terms, all with zero mortgage insurance requirements. Learn more about the lender Jumbo Loan Down Payment Requirements here.
FHA mortgages remain the most popular choice for first time home buyers. FHA loans have more relaxed credit restrictions and liberal debt to income requirements. Buyers should remember that FHA loans in Louisiana are limited to $294,515 for basic 1 unit properties. Buyers that require a higher loan amount should refer to a Conventional or Jumbo loan.
- Up to 96.5% financing for approved buyers. Only 3.5% down payment needed. Down payment can also come in the form as a gift from family or eligible down payment assistance programs.
- FHA permits the home seller to pay buyers closing costs. This can greatly reduce the cash needed to close for buyers with limited savings.
- Debt to income ratio limits to 50% in certain cases.
- Secure fix rate terms – 30 year, 15 year, etc. No prepayment penalties.
- Credit requirements can vary based on down payment. For the max 96.5% financing buyers should have a 620 or greater credit score.
- Buyers should have a stable job history for 2 years, be able to prove income with paystubs, W2’s and/or tax returns.
- FHA also offers a variety of other programs for refinancing – both rate reduction and cash out, along with rehab 203K loans. Learn more FHA home loans here.
VA Loans For Veterans:
VA loans offer many benefits for eligible Vets – 100% financing, and no mortgage insurance costs just to name a few. Veterans can also use their VA mortgage benefits multiple times assuming their old loan was satisfactory paid.
- No down payment required with VA.
- No PMI or mortgage insurance.
- Secure fix rates.
- Loan limits up to $484,350 for regular VA purchase loans. Special VA Jumbo mortgages available for much higher loan amounts.
- Flexible credit qualifying (600 credit)
- No savings requirements.
- Limited closing costs – VA restricts the “allowable” closing costs thus reducing out of pocket expense from the buyer.
- Interest Rate Reduction (IRRL) refinance and 100% cash out refinance permitted.
- Learn more about VA mortgages under the loan programs tab above.
USDA Rural Housing Loans:
Like the VA loan, USDA also offers 100% financing with no money down. The primary difference is the USDA 502 Guaranteed program is available to any approved homebuyer purchasing a home in an eligible rural location. This program is not available in more populated locations like downtown New Orleans. However, some of the suburbs around Baton Rouge, Shreveport, Lafayette, Lake Charles, Monroe, etc do have “rural approved” locations. Buyers can check the USDA property map to see if a house is eligible. Keep in mind with USDA loans the critical components are the location of the property and the household income, there are limits imposed on how much income the family can make. Income limits are determined by many factors like household size, etc. Learn more about the 2019 USDA income limits here.
- No money down, 100 percent financing.
- Closing costs can be included in the buyer loan in certain circumstances or paid by the home seller.
- Low fixed interest rates.
- Not limited to strictly first time home buyers.
- Learn more about USDA loans under the loan programs tab.
Questions, or what to learn more? Please contact us 7 days a week by calling the number above or just submit the Request Contact Form on this page.