Mortgage Financing Made Simple
Many people, especially first-time buyers, are intimidated by what can be a complicated process of buying a home. With the economic downturn of the mid-2000s and the resulting shrinkage of financing programs for buyers, it’s no wonder so many shy away from pursuing the dream of homeownership. But the clouds have cleared and Las Vegas is now one the hottest selling real estate markets in the nation. Best of all, home prices in Las Vegas are still affordable relative to other parts of the country, so the Entertainment Capital of the World remains the perfect place to take the homeownership plunge. Regardless of your preference – a traditional single-family home or high-rise condo – financing is essential. So here’s a Financing 101 for those with dreams of a place to call their own.
Fannie Mae financing, a government-enterprise program otherwise officially known as the Federal National Mortgage Association (FNMA), aims to keep funds flowing to mortgage lenders, as opposed to directly providing mortgage loans to borrowers. Fannie Mae approved lenders endure a strict criteria, which ultimately is good news for the borrower who can rest assured their mortgage loan is competitive and sound. Fannie Mae backed lenders enable qualified first-time buyers to finance up to 97 percent of their purchase and other buyers to finance up to 95 percent for primary residences and 10 percent for second homes. Investor buyers can purchase with as low as 15 percent down. Approval for a Fannie Mae-backed loan typically includes having a front-end debt-to-income ratio of no more than 28 percent, a minimum 5 percent down payment and a minimum credit score of at least 620 for fixed-rate loans.
Vetrans Affairs (VA) financing program was created specifically to offer financial mortgage assistance to active service members and retired veterans. VA financing allows eligible men and women to buy their homes with nothing down and also offers lower-than-average interest rates and better loan terms than other loan types. VA financing also allows buyers to bypass the often dreaded private mortgage insurance (PMI) that’s often required with conventional loans. To become eligible for a VA loan, buyers must provide a Certificate of Eligibility demonstrating service history and duty status.
FHA loans are government-backed mortgages insured by the Federal Housing Administration (FHA). It’s a popular option for first-time buyers since they often require lower minimum credit scores and down payments than conventional loans. So what’s the catch? FHA loan borrowers must pay FHA mortgage insurance, which protects the lender from a loss if someone defaults on the loan. To be eligible for an FHA loan, a credit score of 500 to 579 is required with a 10 percent down, while a credit score of 580 or higher requires a 3.5 percent down. Other requirements include using the loan for the borrower’s primary residence and their front-end debt ratio must not exceed 31 percent of gross income.
And if you’re looking at condominium and high-rise living, you’re in luck because these financing programs are offered at some of the valley’s top-selling condominium properties: The Ogden and Juhl in downtown Las Vegas and One Las Vegas on the south end of Las Vegas Boulevard. All three properties offer VA guaranteed mortgages, as well as traditional 15- and 30-year financing options. The Ogden and One Las Vegas also offer Fannie Mae-backed loans and are the only two condominium towers in Las Vegas since 2008 to obtain Fannie Mae PERS (Project Eligibility Review Service) project approval. Last but not least, The Ogden also offers FHA loans, making it the only condominium in the valley to offer all three options.
“While interest rates are slowly rising, it’s still the perfect time to buy,” said Uri Vaknin, a partner at KRE Capital LLC, whose company acquired One Las Vegas, The Ogden and Juhl in 2013 as DK Las Vegas through a partnership with Dune Real Estate Properties and today has Northcap providing management and sales for the portfolio. “The valley is one of the country’s most desirable places to live, thanks to the superior quality of life, affordability, access to the Strip’s world-class amenities, a growing offering of professional sports, a favorable tax environment and moderate year-round climate. And now, with an array of financing options to make home ownership a reality, what are you waiting for?”
