Home Purchase Loans In Kennewick

Today’s Kennewick, Washington, homebuyers may expect a competitive and dynamic market. Despite a statewide decline in property values, Kennewick has considerable competition for lower-priced properties. Kennewick’s average home worth is $344,005; appreciation was 4.13% last year. The local market is also affected by the Washington state housing market, which has witnessed a 5.2% fall in property values but is expected to rise in significant locations like Kennewick next year. Single-family houses sell over list price and have increased 45.35% in median transaction price over the past year. 

Purchase Loan Programs in Kennewick

There are numerous mortgage programs for Kennewick home buyers. Among them are the following:

• Conventional Loan

In Kennewick, Washington, a conventional home loan is a mortgage not guaranteed by the government, unlike FHA and VA loans. These loans are prevalent, accounting for 63% of the state’s loans. Conforming mortgages fall within the FHFA-established limits, while “jumbo” mortgages are issued for amounts over these limits.

The 2023 conforming loan limits in Kennewick, Benton County, are $726,200 for a 1-unit property, $929,850 for a 2-unit home, $1,123,900 for a 3-unit home, and $1,396,800 for a 4-unit home, respectively.

In Kennewick, Washington, the eligibility requirements for a conventional loan are as follows: Conforming to Fannie Mae and Freddie Mac’s credit score and down payment requirements, conventional loans adhere to Federal Housing Finance Agency (FHFA) guidelines. The average qualifying credit score is 620, with improved rates offered for scores of 740 or higher. In general, the debt-to-income ratio should not exceed 36%. You may need a larger down payment with a lower credit score or a higher debt-to-income ratio. With a down payment of less than 20%, conventional loans may require private mortgage insurance (PMI). 

• FHA Home Loan

Federal Housing Administration (FHA) loans in Kennewick, Washington, are government-backed mortgages intended to assist consumers in acquiring residential properties. Kennewick’s 2023 FHA loan limits are $472,030 for single-family residences, $604,400 for duplexes, $730,525 for triplexes, and $907,900 for quad-plexes. These loans are available for residential properties with one to four units but not for commercial properties. FHA loans also require the borrower to reside in the purchased home, with loan amounts ranging from $5,000 to $907,900 based on the size of the property and excluding real estate investments and values exceeding these limits. The region, which includes Kennewick, Richland, West Richland, and other Benton County cities, adheres to these guidelines.

The advantages of an FHA loan in Kennewick include low down payments, minimal closing costs, and looser credit requirements. First-time buyers can benefit from down payments as low as 3.5% of the home’s price for properties with one to four units, making purchasing a home more accessible to a broader spectrum of individuals. In addition to conventional purchase mortgages, FHA programs in Washington State offer “rehab & repair” mortgages, mortgages for energy-efficient homes, and reverse mortgages. Eligibility requires an approved appraiser’s evaluation and compliance with the primary residence rule. In addition, the loan must adhere to the local FHA loan limits, which vary by county and property size, and satisfy specific multifamily home requirements. Potential homeowners in the region receive additional support and services, including education and down payment assistance, from various local organizations and programs.

• VA Home Loan

A VA home loan in Kennewick, Washington, is a mortgage program offered by private lenders but backed by the U.S. Department of Veterans Affairs. Through different programs, the VA home loan programs help Veterans, Service members, and approved surviving spouses become homeowners. These loans usually have good terms, like not needing a down payment (though some lenders may require one), low-interest rates, low closing costs, and no Private Mortgage Insurance (PMI). Different VA loans, like Purchase Loans, Cash Out Refinance Loans, Interest Rate Reduction Refinance Loans (IRRRL), Native American Direct Loans (NADL), and Adapted Housing Grants, are made to fit different needs, like paying off debt, making home improvements, or helping disabled Veterans. 

VA home loan eligibility is based on service history, duty requirements, and the acquisition of a Certificate of Eligibility (COE). The requirements differ and may include continuous active duty days or service during specific wars. For example, wartime service (WWII, the Korean War, and the Vietnam War) necessitates 90 days of active duty, whereas peacetime service has different requirements. There are specific eligibility requirements for National Guard and Reserve members, including 90 days of non-training active duty and six years of honorable discharge or retirement. Eligibility for spouses and restoration of benefits are also considered, with varying conditions and procedures for various scenarios. Certain loan applications may necessitate obtaining a Certificate of Eligibility (COE) from lenders or submitting specific forms to the VA Regional Loan Center.

• USDA-Guaranteed Home Loan

The USDA Section 502 Guaranteed Loan Program, also known as the Single Family Housing Guaranteed Loan Program, is designed to facilitate homeownership for low- and moderate-income households in rural areas that qualify, including Kennewick, Washington. The program offers 100 percent financing for the purchase, construction, rehabilitation, or relocation of homes in eligible rural areas and provides a 90 percent loan note guarantee to lenders, reducing their risk. This eliminates the down payment requirement for eligible rural residents, making homeownership more accessible.

This program’s benefits include financing up to 100 percent of the home’s appraised value, including closing costs and improvements. The program offers 30-year fixed-rate loans with varying interest rates depending on the lender. In contrast to other mortgage programs, this one does not stipulate a minimum credit score, but applicants must demonstrate debt management skills. Eligible applicants must meet income requirements (up to 115% of the median household income), intend to occupy the home as their primary residence, and be United States citizens, non-citizen nationals, or Qualified Aliens. 

• Native American Home Loan

The Section 184 Indian Home Loan Guarantee Program is designed specifically for American Indian and Alaska Native families, tribes, villages, and housing entities, and it pertains to several states and counties, including Kennewick, Washington. Established in 1992, the program aims to increase access to capital in Native American communities and promote homeownership. It allows for low down payments and flexible underwriting for the purchase, refinancing, construction, or rehabilitation of residences on and off native lands. The program provides fixed-rate loans of 30 years or less, exclusive to single-family dwellings. It guarantees the loans through the Office of Loan Guarantee within the Office of Native American Programs at HUD.

Key advantages of the Section 184 program include the low down payment requirement, underwriting flexibility, and mortgage insurance, which guarantees repayment in the event of foreclosure. It addresses issues in Native American communities relating to the legal status of Indian trust land and provides a remedy for the accessibility of private funding. Section 184A Program eligibility requirements include members of federally recognized tribes, designated housing entities, Indian Housing Authorities, and Native Hawaiians. Applicants must work with Section 184 lenders approved by HUD, and the loan amount can reach up to 150% of FHA lending limits with fixed rates that do not exceed the market rate. The primary requirements are Native American/American Indian recognition and purchasing a primary residence.

• Jumbo Home Loan

In Kennewick, Washington, a jumbo home loan is a mortgage that exceeds the conforming loan limits established by Freddie Mac and Fannie Mae. Conventional loan limits for single-family homes in Kennewick are $726,200, so jumbo loans exceed this amount.

Jumbo loan eligibility requirements in Kennewick are typically more stringent than those for conventional loans. Typically, a credit score of at least 700 is required, and a down payment of at least 10% is required. The loan quantities range from $726,200 to $3,000,000 and are available for primary, secondary, and investment properties. These loans do not require mortgage insurance; even first-time purchasers are eligible. Some lenders may also require 20% to 30% down payments, liquid assets sufficient for one year, and a debt-to-income ratio of 36% or less. Additional appraisals may be required in areas with few comparable sales to align the property value with the loan amount, which could increase costs in cities with limited sales. In regions where property values are elevated relative to conforming loan limits, these loans are frequently selected by homebuyers aiming for properties priced above the median home price.

Apply for a Kennewick Home Purchase Loan

Capital Home Mortgage recognizes the difficulty often associated with securing a mortgage. We’ve made it our business to protect you from going through what we did. Since we are a direct lender, we have complete control over the home loan process.

Call (509) 413-0502 to discuss your home loan options with our Kennewick Home Loan Experts.