Loan Programs
Conventional Conforming loans
A conventional conforming loan is a loan made thru a private lender, as opposed to the government programs of FHA, VA or USDA. Conventional conforming mortgages can be guaranteed by the two government-sponsored entities (GSEs); the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp (Freddie Mac). Conventional conforming loans are not guaranteed by the federal government and, as a result, typically have stricter lending standards. These loans require evidence of employment, income and assets. In our Wisconsin marketplace, the maximum conventional conforming loan amount (for '25) is $806,500 (this is indexed based upon house price inflation and adjusts on an annual basis near year-end). The property (1-4 units) can be your primary residence, secondary residence or investment property.
Benefits of conventional conforming financing:
- Availability of first-time homebuyer programs which are based upon the Area Median Income (AMI) given property location.
- Minimum 3% down payment options.
- No up-front mortgage insurance premiums OR funding fees.
Conventional Non-Conforming loans (aka Jumbo loans)
A conventional non-conforming loan, termed a jumbo loan, is for loan amounts greater than the conventional conforming loan limit of $806,500. They typically require a higher credit score, lower debt to income (DTI) ratio and larger down payment. Jumbo loans are not guaranteed by Fannie Mae or Freddie Mac and, as a result, typically have stricter lending standards than conventional conforming loans.
Benefits of conventional non-conforming loans:
- Ability to finance at a loan amount in excess of the conventional conforming loan limit ($806,500).
FHA loans
An FHA loan is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to borrowers, rather, it provides lenders protection through mortgage insurance (MIP) in case the borrower defaults on his or her loan obligations. The mortgage insurance premium is paid under both an up-front premium (which can be financed into the loan amount) AND monthly premium. Available to all buyers, FHA loan programs are designed to help creditworthy families who do not meet requirements for conventional loans. As conventional loans can be more challenging to obtain, the FHA loan program has been of benefit to a great many borrowers. The property (1-4 units) must be your primary residence.
Benefits of FHA financing:
- Only a 3.5 percent down payment is required (with FICO© score of 580 or higher).
- Lower monthly mortgage insurance premiums for those with lower credit scores. Credit score does NOT determine mortgage insurance premium.
- More flexible underwriting criteria than conventional loans.
VA loans
VA guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected against loss if you fail to repay the loan. In most cases, no down payment is required on a VA guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily available with other loans. Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount. The property must be your primary residence.
Benefits of VA financing:
- NO down payment options are available.
- NO private mortgage insurance requirement.
- More flexible underwriting criteria than conventional loans.
USDA loans
The US Department of Agriculture (USDA) home loans program offers mortgages to low and moderate income residents of rural areas. If you live in a rural area and are unable to qualify for a conventional loan, you may seek qualification for financing under the USDA loan program. USDA guaranteed loans require borrowers to pay a loan guarantee fee of the amount borrowed and an annual fee based upon loan amount. The property must be your primary residence.
Benefits of USDA loans:
- NO down payment options are available.
WHEDA loans
A WHEDA loan is a mortgage program administered by the Wisconsin Housing Economic Development Authority (WHEDA). It is designed to help low-income families, first-time homebuyers in Wisconsin to purchases homes. Borrowers can use gift funds or down payment assistance to cover part or all of the down payment. This is only for Wisconsin properties and for use as a primary residence.
Benefits of WHEDA loans:
- NO down payment options are available.
Non-Qualified Mortgage loans (Non-QM)
Non-Qualified mortgage loans are designed to serve borrowers who don't meet traditional lending requirements. This often involves an inconsistent or nontraditional income structure, a major credit event or high debt. Non-QM loans have their own distinct set of lending criteria, including flexible income and credit requirements. Because these loans are not guaranteed by the government, the lender is taking on all the risk of issuing the loan. In exchange, borrowers may need to make a larger down payment and pay a higher interest rate/closing costs. The residential property (1-4 units) can be your primary residence, secondary residence or investment property.
Benefits of Non-Qualified Mortgage loans:
- Alternate income qualification for self-employed borrowers, ie bank statements.
- Debt Service Coverage Ratio (DSCR) loans for real estate investors