Home Loan Guide
Whether you are buying your first home, second home, or a vacation property, Franco & Ford Real Estate Group can help you determine exactly what type of purchase loan is best for you. We have partnered with mortgage experts that have over 30 years combined experience in the Mortgage and Finance industry. Lets us put our experience to work for you!
Take a look at the types of loan programs below and then head over to Finance Your Home page to get in contact with us about your finance needs.
Conventional loans usually offer the best rates and offer low down payment programs (3% down payment). All banks, mortgage lenders and brokers use these loans because they are the safest and most readily available. Guidelines for Fannie Mae and Freddie Mac are set by the government and intended to make lending easier for lenders to lend. If these guidelines are met, regardless of race, age and/or location, the lender must lend. Lenders will most likely sell these loans in the secondary market and be able to replenish the funds used to lend again.
Though conventional loans are the best option for rates, there is little to no flexibility with the guidelines. You either meet the guidelines or you don’t. Our partners have some niche Fannie Mae and Freddie Mac products from our extensive list of investors. In some cases, we can use W2 income in lieu of tax returns as well as only use one year of corporate returns versus two years to qualify. Our experience in finding the right programs to meet conventional guidelines is what sets us apart.
FHA and VA loans are also government loans. FHA offers a 3.5% down payment and VA offers 0% down payment. Guidelines are very similar to conventional loans but differ in that usually allow for the borrower to have a little more personal debt and they allow for a lower credit score. Our partners have investors that lend in the low 500 credit scores. Most people think that FHA is only for first time buyers when in fact, it is accessible to anyone looking to buy or refinance a home. In some cases, FHA can have lower rates and an overall lower monthly payment than a conventional loan. What our partners do is analyze your specific scenario and determine whether a conventional or a government loans is the best option for you.
One of the reasons for the real estate crash of the late 2000’s was because of risky subprime loans. The original intention of these loans were for those who did not quite meet the conventional guidelines but were still deemed good borrowers. Lenders were willing to take the risk for higher rates and fees. As the market grew, the guidelines to get approved for these loans softened and more and more people who really should not have been approved for a loan, did and along with other factors, the bubble burst and the subprime market completely disappeared.
For the last few years if a borrower did not meet Fannie Mae/Freddie Mac or FHA guidelines, there were little options except private “hard” equity loans. Today, that gap left open by the subprime market has begun to open again with common sense guidelines for those that do not qualify for traditional loans.
Our partners are ahead of the game in offering a wide array of non-prime loans. A few example of these programs are:
- Loans with recent foreclosures, short sales and bankruptcies
- Bank statement deposit averages used as income in lieu of tax returns
- Credit scores as low as 500
- Interest only payments
- Self-employed programs
- Foreign National programs
Foreign National programs
South Florida draws many international real estate buyers for either second homes or investments. Our partners have 3 different types of Foreign National Loans:
- Local Bank Programs – Metro Fund has a working relationship with many local banks that specialize in foreign national loans. Usually these are the best rates in town for foreigners but they do require opening up a banking relationship, pledge reserves at the bank and pass a rather rigorous underwriting process.
- Non-Prime loans – Metro Fund is affiliated with foreign national lenders that lend to foreigners with less stringent guidelines. Though the rates and fees are higher than local banks, there are no bank account requirements and no reserve requirements. Underwriting guidelines tend to be less cumbersome than local banks. Usually this is a great option for those that are making income in both their country and in the United States.
- Private Equity Loans – Otherwise known as “Hard Money” or the lender of last resort, private equity loans became a popular option the last few years. The rates are much higher and the cost of the loan can be very expensive but when an investor factors in the cost of the loan and the investment returns, it make sense for them. The fact that underwriting guidelines tend to be less stringent, this makes these loans easy for foreign investors to access. Our partners have access to many different investors that offer these loans.
Private Equity or Hard Money
Otherwise known as “Hard Money” or the lender of last resort, private equity loans became a popular option these last few years. The rates are much higher and the cost of the loan can be very expensive but when an investor factors in the cost of the loan and the investment returns, it make sense for them. Since the loan is mostly based on the borrower having either a high down payment or substantial equity in the property, the risk to the lender is diminished, hence the less stringent underwriting process. Usually private loans are for investment properties only. At Metro Fund, we can usually find a solution for a primary home that is not a hard private loan.
Our partners offer more alternatives to commercial lending than an actual bank does. Though they have relationships with local banks to deliver their products to our customers, we offer non-bank commercial loans that do not require opening bank accounts or pledging reserves at the bank.
We offer loans for:
- Commercial Construction
- Bridge Loans
- Land Development
- Owner and Non-Owner Occupied Commercial
Jumbo loans are loans over $417K. Many lenders underwrite these loans with the same guidelines as conventional loans but even stricter. Our partners offer conventional jumbo loans but we also offer non-conventional portfolio jumbo loans. What this means is that the investor will not be selling these loans in the secondary market and will keep them and service them in-house. This allows the investor to create guidelines that may cater to those that do not meet traditional conventional guidelines while at the same time, meeting their risk tolerances. Our partners specialize in finding those niche jumbo loans. As the home prices continue to rise, jumbo loans are becoming more in demand.
Our partners offer more alternatives to construction lending than an actual bank does. Though we have relationships with local banks to deliver their products to our customers, we offer non-bank construction loans that do not require opening bank accounts or pledging reserves at the bank.
Some of residential construction loans include:
- Self Build/Owner Builder
- Builder Spec/Builder Pre-Sold
- Custom Build/Borrower Builder
- Construction to Permanent Loans
- Lot/Vacant Land
- Multi-Family (2 to 4+ Units)
- Renovation Loans or Construction Completion Loans