Home Loans In Puyallup, Washington

Puyallup is a city in Pierce County, located 10 miles southeast of Tacoma and 35 miles south of Seattle. The city is situated at the foot of the scenic Mount Rainier and is known for its hops, berries, and flowers.

The real estate market in Puyallup is competitive, with an average median price of $475k and a price per square footage of $269.

Home Loan Programs in Puyallup

With an average median home price of $475k, Puyallup has plenty of mortgage loan options. The conventional-conforming loan is the most prevalent home loan program in Pierce County, followed by an FHA loan. 

The most commonly used mortgage programs in Puyallup are as follows:

• Conventional Loans

Conventional loans are mortgages not associated with any federal program. Conventional home loans can either be conforming or non-conforming loans. 

Conforming loans are mortgages that meet the guidelines and funding criteria of the government-sponsored enterprises Fannie Mae and Freddie Mac. They also meet the loan limits the Federal Housing Finance Agency (FHFA) set.

Non-Conforming loans, on the other hand, are mortgages that don’t meet the standards set by Fannie Mae and Freddie Mac. They also don’t meet the loan limits set by the FHFA. A prime example of a non-conforming loan is a Jumbo mortgage.

Conventional loans have strict eligibility requirements compared to government-insured or guaranteed loans. A minimum credit score is required to qualify for a conventional loan. Your debt-to-income ratio must not exceed 45%, and the down payment requirement is anywhere from 3 – 5% of the purchase price, based on the borrower’s credit score.

The maximum loan amount for a conventional loan in 2023 is $977,500 for a single-family residence.

• FHA Loans

FHA loans are mortgages insured by the Federal Housing Administration, a branch of the United States Department of Housing and Urban Development (HUD). They insure the loans against future default, eliminating the risk from the lender. By doing so, lenders can offer a more favorable term than conventional mortgages. 

FHA-insured loans are the most lenient home loan program. A borrower only needs a credit score of 580 to qualify for an FHA loan. The down payment is 3.5% of the purchase price. Borrowers with a credit score below 580 may still be eligible if they can put down 10%.

FHA loans allow for a higher DTI ratio of 50%. This allows the borrower to qualify for a more expensive home than a conventional loan. The loan limit is $977,500 for a single-family residence and $1,251,400 for a two-unit property. Those looking to purchase a three-unit property may borrow up to $1,412,650 and $1,879,850 for a four-unit property. 

• USDA Loans

USDA-Guaranteed Home Loan is a program offered by the United States Department of Agriculture that helps low- and moderate-income households own a decent, safe, and sanitary property as their primary residence in an eligible rural area. It is a no-money-down program since it guarantees USDA-approved lenders a 90% loan note guarantee.

To be eligible for a USDA loan, borrowers must meet the household income guideline; they cannot make more than 115% of the area median income (AMI). Borrowers must be US citizens or lawfully-admitted resident aliens. The subject property must also be located in a USDA-designated rural area.

Most lenders require a credit score of 640 to qualify for a USDA-Guaranteed Home Loan.

• VA Loans

VA home loans are mortgages offered by private lenders like banks, credit unions, and mortgage companies. The United States Department of Veterans Affairs guarantees them. It allows active-duty service personnel, veterans, and their surviving spouses to finance a property with no money down.

To be eligible for a VA home loan, borrowers must meet the minimum duty service requirements, have a valid Certificate of Eligibility (COE), and use the property as a primary residence.

• Jumbo Mortgage Loans

Any mortgage that exceeds the loan limits set by the FHFA is considered a jumbo loan. They are used to purchase expensive or luxury homes. They require a credit score of 700, and some lenders require a credit score of 720.

Depending upon the borrower’s credit score, the down payment requirement on a jumbo loan is 10% of the purchase price. Borrowers may be required to come up with a 20 – 30% down payment if their credit is not up to par. Lenders only offer jumbo loans to buyers with predictable, steady incomes. Borrowers must have a low DTI ratio, preferably below 43%. The reserve requirement for jumbo loans is 6 – 12 months of the proposed monthly mortgage payments.

Apply for a Home Loan in Puyallup

Let us assist you in becoming a happy homeowner in Puyallup, Washington. Contact our professional loan experts at Capital Home Mortgage immediately to discuss your house loan requirements. Whether you’re a first-time borrower or a seasoned investor, we can match you with the right mortgage package for your needs. 

To get started, call us at (253) 528-4417.