Pacific Access Mortgage 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 | Second Mortgages | Reverse Mortgage | 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 1.5% 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 2009 High Cost County Limits below.
• One time mortgage insurance fee of 2.15% is typically charged, which may be financed if the total loan amount does not exceed VA limit
• 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.

	48 States	Hawaii & Alaska
1 unit property	$417,000	$625,500
2 unit properties	$533,850	$800,775
3 unit properties	$645,300	$967,950
4 unit properties	$801,950	$1,202,925

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 FNMA and FHLMC.

• ARMs
• Fixed Rates
• Options Available

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Second Mortgages or Home Equity Closed-End Loans

A close-ended loan is one where a set amount of money is borrowed and repaid within a specific period of time. There are a multitude of second mortgage products available and lender guidelines vary widely. Generally, loan amounts, interest rates and fees are tied closely to equity in the property and credit scores. Whether to do a first or second mortgage or whether to take a line of credit or closed-end loan depends largely on the purpose of the loan.

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Reverse Mortgage

A Reverse Mortgage is a special type of mortgage loan available to senior homeowners (62 years or older), that allows them to convert the equity accumulated in their primary residence into tax-free income without having to sell the home, give up title to the home, or to take on a new monthly mortgage payment.

These mortgage loans are called Reverse Mortgages because the payment structure is “reversed” in comparison to regular mortgage loans.  Instead of making monthly payments to the lender, the lender makes payments to the senior borrower.  No payments are due on a reverse mortgage until the borrower(s) cease to occupy the home as a principal residence (when the last remaining spouse passes away, sells the home or permanently moves out).  The amount owed can never exceed the value of the home.  If the home is sold for less than the amount owed on the loan, the lender cannot collect on the shortage amount.  If however, the home is sold and the sales proceeds exceed the amount that is owed, the excess money from the sale goes to the borrower(s)’ estate.

The funds from a reverse mortgage can be used for any purpose; paying off existing loans, home repair or renovation, daily living expenses, health care expenses, taking a vacation, paying property taxes, etc. 

The maximum loan amount is computed based on 3 factors: (1) the age of the borrower(s), (2) the property value, and (3) current interest rates.  In general, the older the borrower, the higher the value of the home, and the less owed on the home, the more money available to the borrower.

PROGRAMS and FEATURES:

There are three reverse mortgage programs available to Seniors through Central Pacific HomeLoans.

• The FHA Home Equity Conversion Mortgage, referred to as “HECM”.
• The Fannie Mae Home Keeper, which is a Fannie Mae sponsored program.
• The Financial Freedom Cash Account. This program is ideal for very high valued properties with loan amounts that exceed the maximum loan amount of the two previously mentioned programs. There is no maximum loan amount for this program.

• NO income or credit  qualification required
• NO loan payments required as long as  the borrower remains in the home
• Loan proceeds are non-taxable (consult with your tax consultant).
• Existing loans and liens against  the property can be paid off using the reverse mortgage proceeds
• Borrower continues to own the home
• All loan closing costs, may be financed as part of the Reverse Mortgage
• Eligible property types include single family homes, approved condominium units and townhouses

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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." At the end of that time, the borrower has a set number of years to repay the remaining balance in full without further draws.

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