Home Purchase Loans In Olympia

On the current market, homebuyers in Olympia, Thurston County, can anticipate a median sale price of $513K, up 2.5% from the previous year. Homes in Thurston County sell after an average of nine days on the market. The market is still considered a seller’s market, but both buyers and sellers have ample opportunities.

Purchase Loan Programs in Olympia

Olympia home buyers have various mortgage options to meet their specific needs. Among them are the following:

• Conventional Loans

A conventional conforming loan adheres to the rules established by Fannie Mae and Freddie Mac. A mortgage is called a jumbo loan when it exceeds the conforming lending restrictions. The conforming loan maximum in Thurston County for a single-family residence in 2023 is $726,200, $929,850 for a duplex, $1,123,900 for a triplex, and $1,396,800 for a quadplex.

To qualify for a conventional conforming loan, you must have a credit score of 620 or higher, a debt-to-income ratio (DTI) of less than 45% in most situations, a down payment of 3 – 5% or more, and a two-year track record of work and income. Conventional loans are not government-insured and are made available by private lenders.

The loan parameters and down payment options for conventional loans are flexible. They may be utilized to purchase or refinance a primary residence, second home, or investment property. Conventional loans also provide competitive interest rates and the option to eliminate mortgage insurance once home equity reaches 20 percent.

• FHA Home Loans

FHA home loans in Olympia, Thurston County, Washington, are mortgage loans insured by the Federal Housing Administration (FHA) designed for home buyers with low credit scores and limited down payment options. These loans require a minimal down payment of 3.5% if your credit score is 580 or higher and 10% if your credit score is less than 580. Debt-to-income ratios must be less than 43 percent. With lending limits, the property must be owner-occupied and free of dangers. 

The 2023 FHA loan limits in Olympia, Thurston County, are $546,250 for a single-family residence, $699,300 for a duplex, $845,300 for a triplex, and $1,050,500 for a fourplex.

An upfront mortgage insurance premium (UPMIP) and a regular monthly mortgage insurance premium (MIP) are also required. There is also the option of an FHA 203k loan, which allows purchasing and modifying a property. FHA loans necessitate appraisal and inspection and are intended for primary residences rather than investment properties.

A minimum credit score of 580 is required for an FHA loan in Olympia to qualify for the 3.5% down payment advantage. Consistent income evidence must be provided, and previous concerns, such as bankruptcy or foreclosure, may not disqualify a buyer. Specific programs, such as the FHA Streamline Refinance, offer lower interest rates and lower fees. 

• VA Home Loans

In Olympia, Thurston County, Washington, a VA home loan is a mortgage offered to veterans, service members, and eligible surviving spouses, with the Department of Veterans Affairs guaranteeing private lender loans. This loan program features no down payment, low interest rates, limited closing costs, and no private mortgage insurance (PMI). Local services in Olympia, such as Capital Home Mortgage, assist military families with VA purchase and refinance services.

Key features of VA home loans include the ability to purchase homes and condominiums, build and enhance properties with 100 percent financing, lifetime guarantees for multiple uses, and options such as cash-out refinancing. Available programs include IRRRL for reduced interest rates on existing VA loans, NADL for assistance to Native American Veterans, and Adapted Housing Grants for disabled Veterans. The loan limits have been eliminated, allowing eligible veterans to purchase more expensive residences without making a down payment.

The requirements for eligibility are a sufficient income, acceptable credit, and a valid Certificate of Eligibility (COE). Different service periods, active duty, officers, Guard, and Reserve members are subject to distinct criteria. The COE can be requested online, and lenders can provide application assistance. Those affiliated with particular organizations or who served with allied regimes during World War II may also be eligible. Restoration is possible after selling a previous property or repaying a loan.

• USDA Home Loans

In Olympia, Thurston County, Washington, the USDA home loan program assists low-income individuals in rural areas, fostering affordable homeownership and rural prosperity. The program is accessible through two main categories: Guaranteed and Direct Loans, both of which offer options with no initial down payment. Specific eligibility requirements include income restrictions, residence intent, legal capacity, citizenship, and conformance with loan limits and non-income-generating purposes. The Direct Loan program has variable interest rates, and the repayment period for individuals with extremely poor incomes can last up to 33 or 38 years.

The USDA home loan program offers 100% financing with a 90% loan note guarantee, low-interest rates, reduced insurance premiums, and no minimum credit score requirement. The Section 502 Guaranteed Loan Program is designed for low- to moderate-income households, whereas the Direct Loan program is geared toward low-income applicants. The USDA’s website provides tools for determining eligibility based on rural location, income limits, creditworthiness, and property requirements.

The program services first-time and repeat buyers in Olympia and Thurston County with various loan options, including FHA, VA, and USDA. Thurston County has income eligibility requirements that vary by family size (e.g., up to $96,250 for a family of four). Checking the property’s eligibility and communicating with a loan officer will provide additional information regarding the appropriate loan type, credit checks, and the home-buying process as a whole.

• Construction Loans

A construction loan is a short-term loan used to finance the construction or renovation of a house or other real estate project. These loans typically feature variable rates higher than regular mortgage rates and are set for one year or less.

A construction loan’s significant features include interest-only payments during the construction phase, flexible disbursement schedules to pay for construction costs as they arise, and the potential to roll the loan into a permanent mortgage after completion. Eligibility requirements vary per lender, but most require a solid credit score, a low debt-to-income ratio, and an explicit construction project plan.

A construction-to-permanent loan, also known as a one-time construction loan, combines the qualities of a construction loan and a typical mortgage into a single loan. The borrower only has to go through one closing process with this financing and can lock in their permanent interest rate before construction begins. Instead of securing separate loans for construction and permanent finance, this can save time and money. 

• Jumbo Loans

In Olympia, Thurston County, Washington, a jumbo loan is a mortgage that pays for high-value homes worth more than the standard loan limits. Most Washington counties have a conforming loan cap of about $726,200, but jumbo loans give you more buying power than this. This lets buyers get one mortgage for a significant number of properties. Jumbo loans come with fixed or adjustable rates and terms of 15, 20, or 30 years. They can be used for primary, secondary, or investment properties. 

Key aspects of jumbo loans are higher limits on how much you can borrow, the possibility of higher rates, flexibility in how the loan is underwritten, and no private mortgage insurance (PMI). They have a lot of pros, like higher limits and more freedom in insurance, but they also have some cons, like the possibility of higher costs and rates and no government backing. Most lenders want a credit score of 680 or higher, and loan-to-value (LTV) ratios and down payments play a significant role in the rates they offer.

Due to the higher risk, jumbo loans have stricter standards for who can get them. A good credit score, a low debt-to-income (DTI) ratio, a lot of cash reserves, and a significant down payment are all important. Usually, a 20% down payment is needed. To qualify, you also need proof of income, assets, and an excellent financial profile.

• Native American Home Loans

The Section 184 Indian Home Loan Guarantee Program is a mortgage loan product explicitly designed for American Indian and Alaska Native families, Alaska villages, tribes, and tribally designated housing entities. Congress established this program in 1992 to increase access to capital and facilitate homeownership in Native American communities. Section 184 home mortgage loans made to Native borrowers are backed by the Office of Loan Guarantee within HUD’s Office of Native American Programs. The loan guarantee guarantees the complete repayment of the lender’s investment in the event of foreclosure.

American Indians or Alaska Natives who are members of a federally recognized tribe, federally recognized Indian tribes, and tribally designated housing entities are all eligible borrowers for the Section 184 program. Loans must be issued in an approved location, and the program has expanded to include sites other than tribal trust land that are eligible.

Flexible underwriting, low down payment requirements, and the opportunity to use the loan for new construction, rehabilitation, acquisition of an existing property, or refinance are all advantages of the Section 184 program. The loan is only available for single-family homes (1-4 units) with fixed-rate loans of 30 years or less. Section 184 loans are unavailable for adjustable rate mortgages (ARMs) or commercial properties. 

• Non-Qualified Mortgage Loans

A non-qualified mortgage (non-QM) is a home loan that does not satisfy the Consumer Financial Protection Bureau (CFPB) requirements to be considered a qualified mortgage. Non-QM loans are designed for homebuyers who cannot meet the stringent requirements of a traditional mortgage, such as those who are self-employed or lack the required documentation.

Key characteristics of a non-qualified mortgage (non-QM) loan include flexibility concerning income or credit history and alternative income verification documentation. Typically, non-QM lenders offer programs that enable you to borrow within days of a significant credit event, such as a recent bankruptcy or foreclosure.

To qualify for a non-QM loan, you must work with a lender who provides these loans and satisfies their eligibility requirements. These requirements generally include a decent credit score and a low debt-to-income ratio, though they may vary by lender. Notably, non-QM loans are designed for homebuyers who cannot meet the strict requirements of a qualifying mortgage, such as those who are self-employed or need more documentation to qualify for a conventional mortgage.

Apply for an Olympia Home Purchase Loan

Capital Home Mortgage has much to offer people who want to buy a home in Olympia, Washington. First, Capital Home Mortgage can help buyers find the best interest rates and terms in a mortgage market that is hard to understand and where mortgage rates have been historically high. Our customized home purchase loans come with a loan pre-approval, thorough options based on your specific needs, and help comparing interest rates and terms. Capital Home Mortgage has experts who can help advise people who want to buy a home in Olympia.

Call (360) 474-5656 to discuss your home purchase loan with our Olympia Home Loan Specialists.