Home Purchase Loans In Shoreline

Shoreline is a Seattle suburb with a population of 58,213. Shoreline is in King County and is one of Washington’s best places to live. Shoreline residents enjoy an urban-suburban mix, and the majority own their homes. However, the real estate market in Shoreline is highly competitive, with higher prices and speedier sales.

Purchase Loan Programs in Shoreline

Home buyers in Shoreline have various mortgage loan programs to suit their needs and requirements. Among them are the following:

• Conventional Loan

A conventional loan is a type of mortgage not guaranteed by the government. It can be both conforming and non-conforming. Private lenders provide conventional loans, one of the most common mortgage types. They have different credit scores, down payment, and loan limit criteria, making them appropriate for creditworthy applicants. Conforming conventional loans adhere to requirements imposed by government-sponsored entities such as Fannie Mae and Freddie Mac, but non-conforming loans do not. Conventional loans have fixed and adjustable interest rates and repayment durations ranging from 15 to 30 years.

To qualify for a conventional conforming loan, you must have a credit score of roughly 620, a debt-to-income ratio of less than 45%, and a down payment of 3 – 5% of the purchase price. These loans have attractive interest rates, but private mortgage insurance may be required if the down payment is less than 20%.

The 2023 conforming loan limits for Shoreline, King County, are $977,500 for a 1-unit home, $1,251,400 for a 2-unit home, $1,512,650 for a 3-unit home, and $1,879,850 for a 4-unit property.

• FHA Loan

An FHA home loan is a mortgage insured by the Federal Housing Administration (FHA), a United States Department of Housing and Urban Development division intended to assist low- and moderate-income borrowers in achieving homeownership. 

Compared to conventional loans, FHA home loans have lower down payment requirements and more lenient credit score standards. According to HUD, there is no maximum age limit for borrowers, and the minimum age is the age at which a mortgage note can be lawfully enforced in the state or other jurisdiction where the property is located. The underwriter evaluates the income, assets, liabilities, and credit histories of borrowers, co-borrowers, and cosigners while establishing their creditworthiness. The minimum credit score and maximum loan-to-value (LTV) ratio for which the borrower is eligible are also considered. For example, if the borrower’s minimum decision credit score is 580 or higher, they qualify for maximum financing and a down payment of 3.5% of the purchase price.

Shoreline, King County, Washington, FHA loan limits for 2023 are as follows: $977,500 for a single-family residence, $1,251,400 for a duplex, $1,512,650 for a triplex, and $1,879,850 for a fourplex.

• VA Loan

A VA home loan is a mortgage loan guaranteed by the United States Department of Veterans Affairs (VA) intended to assist qualifying veterans, service members, and their families in obtaining homeownership. If you satisfy specific qualifications, you may be entitled to a VA home loan in Shoreline, King County, Washington. You must be a veteran (spent at least one day in the military, whatever discharge type), service member, or relevant family member living in King County to be eligible for services or resources. 

A VA home loan has no down payment requirement and less stringent credit score standards than conventional loans. To be qualified for a VA-guaranteed home loan, you must have good credit, sufficient income, and a valid Certificate of Eligibility (COE). The house must be for your personal use only. The VA website lists the eligibility requirements for military members, veterans, spouses, and other eligible beneficiaries to get a COE.

• USDA Home Loans

The USDA Single Family Housing Guaranteed Loan Program enables low- and moderate-income households to obtain 100 percent financing for properties in eligible rural areas, including the Shoreline neighborhood of King County, Washington. This program provides a 90 percent loan note guarantee, allowing eligible rural buyers to obtain loans with no down payment. To qualify, applicants must meet income requirements, occupy the home as their primary residence, and be U.S. citizens or qualified aliens. The program seeks to encourage rural homeownership at an affordable cost and offers fixed-rate loans with terms of up to 30 years. Applicants may apply through USDA Rural Development-approved lending institutions, like Capital Home Mortgage.

In addition, the USDA Single Family Housing Direct Home Loan Program, also known as the Section 502 Direct Loan, facilitates low- and very-low-income individuals in rural areas that qualify, such as Shoreline, King County, Washington. This program temporarily reduces mortgage payments based on a family’s adjusted income to increase repayment capacity. Income limits, willingness to repay debt, lack of acceptable housing, inability to secure loans from other sources, primary residence occupancy, loan capacity, and citizenship/eligible noncitizen status are among the eligibility requirements. The purpose of the program is to encourage rural homeownership and community development at an affordable cost.

• Native American Home Loan

The Section 184 Indian Home Loan Guarantee Program is a loan program for American Indian and Alaska Native families, Alaska villages, tribes, or housing entities named by the tribe. Congress started this program in 1992 to make it easier for Native Americans to buy homes and give them more access to capital. Borrowers can get into a house with a low down payment and flexible underwriting through Section 184 financing. Section 184 loans can be used to build new homes, fix up old ones, buy an existing home, or sell, both on and off native lands.

You must be a currently enrolled member of a federally recognized tribe to qualify for the Section 184 Loan. Verification of enrollment will be required for Section 184 loan applications. Section 184 home mortgage loans made to Native debtors 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. If leasing tribal land, the applicant applies for a Section 184 loan with a participating lender and collaborates with the tribe and Bureau of Indian Affairs. The lender then evaluates the required documentation and submits the loan to HUD’s Office of Loan Guarantee for approval.

The Section 184 Loan Program has no minimum credit score requirement, making it optimal for credit-challenged borrowers who are eligible. In addition, unlike most mortgage programs, applicants with low credit scores are not required to pay higher mortgage rates. However, the creditor must continue to demonstrate creditworthiness.

Section 184 loans require a 2.25 percent down payment for loans over $50,000 and a 1.25 percent down payment for loans under $50,0003. The maximum loan amount differs by county.

• Jumbo Loan

A jumbo home loan is a mortgage loan that exceeds the Fannie Mae and Freddie Mac loan-servicing limits. In Shoreline, King County, Washington, the single-family dwelling limit for 2023 is $977,500. Jumbo loans are available for primary residences, second or vacation homes, and investment properties and come with various terms, including fixed- and variable-rate loans.

Jumbo loans often feature higher interest rates, tighter underwriting guidelines, and a more significant down payment than a regular mortgage. Some lenders provide flexible fixed and adjustable rates and the ability to borrow up to $3 million at low, competitive rates and with minimal expenses. You can pay off your mortgage at any moment without incurring any penalties.

To qualify for a jumbo loan in Shoreline, King County, Washington, you must satisfy the lender’s requirements. These may include a minimum credit score, income level, and total assets.

• Non-Qualified Mortgage Loan

A non-qualified mortgage (non-QM) loan does not meet the Consumer Financial Protection Bureau’s (CFPB) qualified mortgage rules. Non-QM loans are mortgages that do not fulfill the CFPB’s “ability to repay” guidelines, which require lenders to evaluate your finances and set loan terms that you will be able to repay. Non-QM loans have riskier features like interest-only payments, negative amortization, balloon payments, longer loan periods, and higher-priced loans with upfront points and fees.

Non-QM loans provide income and credit history flexibility. While a standard Qualified Mortgage loan requires you to provide tax returns, W2s, and paycheck stubs to verify your income, a non-QM lender may calculate your income using bank statements. Non-QM lenders frequently offer programs that permit borrowing within days of a significant credit event, such as a recent bankruptcy or foreclosure.

Non-QM loans are helpful for individuals who found their dream homes but were denied a mortgage loan due to qualified mortgage requirements. A non-qualified mortgage may serve as a bridge loan until you meet conventional mortgage requirements and can refinance into a traditional loan. Non-QM lenders provide options for self-employed borrowers, borrowers with low credit scores, borrowers with high DTI ratios, and borrowers with nontraditional income, such as those who live off investment proceeds.

Apply for a Shoreline Home Purchase Loan

Capital Home Mortgage is a mortgage company that offers comprehensive services to consumers in Washington state, including Shoreline. We provide numerous mortgage loans, including FHA, VA, Conventional, USDA, Jumbo, and HUD 184 loan programs.

Call (206) 590-2280 to speak with our Shoreline Home Loan Specialists about your home loan needs.