Loan programs

Conventional loans

A conventional loan is any mortgage that is not insured or guaranteed by a government agency. It follows guidelines set by Fannie Mae and Freddie Mac, and it is what most buyers with steady income and reasonable credit end up using.

The reason it is the default is flexibility. Conventional financing works on primary homes, second homes and rental property, on condos, and on multi-unit buildings. Mortgage insurance, if your file needs it, is cancellable once you have built enough equity — which is not true of every program.

FHA loans

FHA loans are insured by the Federal Housing Administration. That insurance is what lets lending partners say yes to borrowers whose credit history has a few rough patches, or who have not had years to build up savings.

The trade-off is mortgage insurance that generally stays for the life of the loan on most FHA files. That is not a reason to avoid FHA — it is a reason to plan for it. Plenty of people use FHA to get in the door and refinance to conventional a few years later once credit and equity have improved. We can map that out at the start.

VA loans

If you served, this is almost always worth a look. VA loans are guaranteed by the U.S. Department of Veterans Affairs and are available to eligible Veterans, active-duty service members, National Guard and Reserve members, and some surviving spouses.

Two things make VA financing genuinely different. There is no monthly mortgage insurance, which changes the math on every comparison. And the down-payment requirement is more forgiving than anything else on the market. There is a funding fee in most cases, though service-connected disability can waive it.

The first thing we need is your Certificate of Eligibility. I can usually pull it in a few minutes.

USDA loans

USDA loans are backed by the U.S. Department of Agriculture and are meant for homes in eligible rural and outer-suburban areas. The word “rural” is misleading. A surprising amount of Michigan qualifies, including pockets of Lapeer, Livingston, St. Clair and Washtenaw counties within a comfortable commute of Detroit.

The headline feature is that eligible buyers can finance the full purchase price. There are two catches: the property has to sit inside a mapped eligible area, and household income has to fall under a cap that varies by county and family size. Both are quick to check — send me an address and I will tell you the same day.

Jumbo loans

A jumbo loan is any mortgage larger than the conforming limit for your county. Because these loans cannot be sold to Fannie Mae or Freddie Mac, each lending partner sets its own guidelines — which means the answer genuinely varies from one lender to the next.

That variation is the argument for shopping the file. Edge Home Finance, LLC is a mortgage broker, so I can put the same jumbo scenario in front of several wholesale lenders and see who treats your income structure most sensibly. Two lenders can look at identical documents and reach different conclusions.

Expect heavier documentation and real reserve requirements. Start early.

New construction financing

Buying from a builder runs on a different clock than buying a resale. The purchase agreement gets signed months before the house exists, and the loan cannot close until the certificate of occupancy is issued.

The practical problem is timing. Documents go stale. Employment gets re-verified. Rate locks have expiration dates, and some builders have preferred lenders whose incentives come with strings attached. My job is to keep your file current, coordinate with the builder’s superintendent on realistic completion dates, and make sure you know what a builder incentive actually costs you before you accept it.

If you are considering a builder’s in-house lender, get a second opinion. Comparing two full loan estimates side by side is the only honest way to evaluate the offer.

DSCR investor loans

DSCR stands for debt service coverage ratio. On these loans, qualifying is based on the rent the property is expected to produce rather than on your personal tax returns. If the rent covers the payment, the file works.

That matters for real estate investors, because the same write-offs that make your tax bill smaller also make your documented income look smaller. Investors who are doing well on paper are routinely told no by conventional underwriting for reasons that have nothing to do with their actual finances.

DSCR loans generally close in the name of an entity, which is useful if you are building a portfolio.

Bank statement and 1099 loans

If you are self-employed, you already know the frustration. You run a profitable business, you write off everything your accountant legally lets you write off, and then a mortgage underwriter looks at your adjusted gross income and treats you like you barely earn anything.

Bank statement loans solve that by using deposits into your business or personal accounts as the income figure instead of your tax return bottom line. 1099 loans do something similar for contractors who receive 1099s but file with heavy deductions.

These are not shortcuts and they are not no-documentation loans. Underwriters look hard at deposit consistency, at how long the business has operated, and at whether the deposits are genuinely business revenue. Bring twelve to twenty-four months of statements and we will know quickly where you stand.

Refinancing

“Should I refinance?” is really four different questions, and the answer depends on which one you are actually asking.

You might want a lower payment. You might want to be done sooner, which usually means a higher payment and less interest overall. You might want to remove mortgage insurance you no longer need. Or you might want to pull cash out for a renovation or to clear higher-cost debt.

Those are four different loans. Refinancing also restarts the clock on amortization, so a lower payment is not automatically a win — if you are eight years into a thirty-year loan, stretching the balance back over thirty years can cost more in total even at a better price. I will show you both numbers and let you decide with your eyes open.

HELOC and home equity

A home equity line of credit lets you borrow against the equity you have built without touching the first mortgage you already have. That distinction is the whole point. If your existing first mortgage is on terms you like, replacing it to access equity may not make sense.

A HELOC works like a credit line: you draw what you need, when you need it, and pay interest only on what you have drawn. A closed-end second mortgage is the alternative — one lump sum, fixed payment, fixed term. Which one fits depends on whether your expense is a single known number or a series of unknown ones.

Common uses: a renovation, college tuition, bridging the gap between buying a new home and selling the old one, or consolidating higher-cost debt.

Down payment assistance

Michigan runs down payment assistance through MSHDA, and several other states I am licensed in have their own versions. These programs help with the up-front cash a purchase requires — sometimes as a second lien, sometimes as a forgivable amount, depending on the program.

Two honest cautions. First, eligibility rules are strict and they change: income caps, purchase price caps, location requirements, homebuyer education requirements, and first-time buyer definitions that are not always what you would assume. Second, not every seller in a competitive market treats an assistance-backed offer the same way, so we should talk about how to present it.

None of that is a reason to skip it. It is a reason to check eligibility early rather than three days before you want to write an offer.