Island Pacific HomeLoans, LLC offers several loan programs. Most loan programs contain different features that can be confusing for even experienced homeowners. The most common loan programs include:

FHA Loans | VA Loans | Conforming | Jumbo | Equity Lines

Federal Housing Administration (FHA)

The Federal Housing Administration is a division of the U.S. Department of Housing and Urban Development, commonly referred to as HUD. FHA loans were created to provide affordable mortgages to the average homebuyer. The federal government insures FHA loans, or guarantees participating lending institutions against loss from default on qualifying loans.

Programs and Features:

• Fixed Rate Loans, Temporary Buy-Downs and ARMS
• Available for detached 1 to 4 unit dwellings, eligible condos and PUD's
• Properties must meet HUD guidelines and be inspected by HUD-approved appraisers
• Subject to loan limits set by HUD (see HUD web site for loan limits)
• Mortgage insurance of one-half of 1% due annually and paid monthly
• One time mortgage insurance fee of 1.75% to 3.0% charged on detached dwellings and PUD's, which may be financed
• Non-occupant co-borrowers allowed
• No reserve requirements at closing
• 100% of down payment and closing costs may be a "gift"
• Fully assumable by a qualified borrower
• Seller may contribute a maximum of 6% of the lower of the sales price or the appraised value

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Veterans Administration (VA)

Veterans Administration loans were created to help veterans finance the purchase of their homes with favorable loan terms. For the purpose of the VA program, “veteran” includes active duty service personnel and certain categories of spouses. Like FHA loans, the federal government insures VA loans, or guarantees VA approved lending institutions against loss from default on qualifying loans.

Programs and Features:

• Fixed Rate Loans
• Available for detached 1-unit dwellings, eligible condos and PUD's
• Properties must meet VA guidelines and be inspected by VA-approved appraisers
• Subject to loan limit set by VA, see 2022 High Cost County Limits below.
• No prepayment penalty
• 6-12 months PITI* reserve requirements at closing (depending on loan amount)
• No down payment required if loan amount does not exceed VA limit
• Out-of-pocket expenses may be gifted, typically from relatives
• Only eligible veterans and their spouses occupying the subject property may be co-borrowers or co-signers
• Seller may contribute a maximum of 4% of the lower of the sales price or the appraised value

* PITI: Principal, Interest, Tax, and Insurance

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Conforming Loans

Conforming Loans are those that meet Fannie Mae and or Freddie Mac underwriting requirements. In other words, income, credit, and property requirements must meet nationally standardized guidelines. Conforming loans are subject to loan amount limits that are set by Fannie Mae (FNMA) and Freddie Mac (FHLMC). These limits vary based on the region in which the subject property is located as well as the number of legal units contained in the subject property.

Under the FNMA and FHLMC Charter Acts, the loan limits are 50% higher for first mortgages in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.

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Jumbo and Non Conforming Loans

Jumbo loans are those that exceed the loan amounts allowed by Fannie Mae and Freddie Mac.

Programs:

• ARMs
• Fixed Rates
• Options Available

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Home Equity Lines of Credit

A home equity line of credit loan is a line of credit that is secured against real estate. The amount of the credit line is dependent upon the amount of equity in the subject property and the lender's guidelines. Each lender has its own specific guidelines and limitations. Lines of credit are typically designed for borrowers who intend to pay back the borrowed funds within a short period of time. Equity lines of credit are processed and underwritten similar to traditional mortgages; however, lender guidelines vary widely.

Home equity lines differ from traditional mortgages that provide funds up front, then required repayments of principal and interest each month. With a home equity line, a borrower may draw against any available credit on the line while continuing to make monthly payments during the "draw period."

Interest on home equity lines accrues similar to interest on credit cards and payments are based on payment factors.

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