Home Purchase Loans In Spokane Valley

While the Spokane Valley home market remains competitive, with rapidly pending transactions, overall market trends are slightly cooling, impacted by several economic and local variables. Buyers should be aware of the market’s quick changes and keep current on pricing, mortgage rates, and available inventory to make informed purchases.

Purchase Loan Programs in Spokane Valley

Here’s a short list of the most prevalent mortgage loans available for Spokane Valley home buyers:

• FHA Loans

A Spokane Valley FHA loan is a mortgage loan insured by the Federal Housing Administration (FHA) and made available to homebuyers in Spokane County, Washington’s Spokane Valley. The FHA does not lend money directly; instead, it insures loans made by private lenders, making it more straightforward for borrowers to qualify.

The eligibility requirements for an FHA loan in Spokane Valley include the following:

• • • Down Payment

For candidates with a credit score of 580 or higher, a minimum 3.5% down payment is required. A 10% down payment is required for individuals with a credit score between 500 and 579.

• • • Credit Score

Applicants must have a minimum FICO score of 500. Applicants with a credit score of 580 or higher qualify for the 3.5% down payment option.

• • • Debt-to-Income (DTI) Ratio

The utmost allowed DTI ratio is 43%. With compensating factors, a greater DTI ratio is permitted.

• • • Employment and Income

Applicants must demonstrate a 2-year employment history and document their income using paycheck stubs and W2s.

• • • Primary Residence

The property must serve as the buyer’s principal residence. FHA loans are not designed for rental properties.

• • • Loan Limits

For 2023, the FHA loan limits for Spokane-Valley, Spokane County, WA, are as follows: $472,030 for a single-unit property, $604,400 for a 2-unit home, $730,525 for a 3-unit home, and $907,900 for a 4-unit property.

Other optional FHA services include the FHA 203k loan, which permits the purchase and renovation of a property, and the FHA Reverse Mortgage for purchase loans.

• VA Loans

A VA home loan is a mortgage loan program provided by the U.S. Department of Veterans Affairs (VA) to help veterans, active-duty service members, and some National Guard and Reserves members become homeowners. The VA home loan program aims to help qualified people buy, build, or refinance homes with better terms and conditions.

You must have served in the armed forces to get a VA home loan in Spokane Valley. Once this requirement is met, the candidate must meet other conditions, such as income, credit score, and property evaluations. VA loans have a lot of benefits, like low-interest rates, no down payment, and more, making them a good choice for qualified veterans and service members.

• USDA Guaranteed Home Loans

A USDA Guaranteed Home Loan, also known as a USDA Rural Development Loan, is a type of mortgage program sponsored by the United States Department of Agriculture (USDA) to assist individuals and families with low to moderate incomes in purchasing rural homes. The program encourages homeownership in sparsely populated areas that may need more access to conventional financing options.

A significant advantage of this program is that it allows eligible applicants to obtain a mortgage without making a down payment. This can make homeownership more accessible to individuals who lack substantial down payment funds.

It’s important to know that even though the USDA program guarantees loans, the loans come from private lenders like banks and credit unions. The USDA guarantees a part of the loan if the borrower doesn’t repay it. This lowers the lender’s risk and gives the borrower better terms.

• Conventional Loans

A conventional mortgage is neither insured nor guaranteed by the government. Instead, it is guaranteed by private lenders, and the borrower typically pays for its insurance. These types of loans frequently adhere to the guidelines established by Fannie Mae and Freddie Mac.

Conventional mortgage eligibility requirements include the following:

• • • Credit Score

A minimum credit score of 620 is typically required for most conventional loans. However, the lowest interest rates are typically available to borrowers with credit scores of at least 740.

• • • Down Payment

Some highly-qualified purchasers can make down payments as low as 3 percent, but the typical requirement is 5 to 20 percent. The loan terms can be more favorable the more significant the down payment.

• • • Debt-to-Income (DTI) Ratio

This represents the proportion of a borrower’s monthly total income for debt repayment. Although exceptions exist, lenders generally seek a DTI ratio of 43% or less.

• • • Employment and Income

Conventional loans require two years of continuous employment history. Borrowers must provide evidence of a stable income, such as recent pay receipts, tax returns, or other documentation.

• • • Loan Limits

The 2023 conforming loan limits in Spokane Valley, Spokane County, are $726,200 for a one-unit home, $929,850 for a 2-unit property, $1,123,900 for a 3-unit property, and $1,396,800 for a four-plex.

• Jumbo Loans

A jumbo loan in Spokane Valley is a mortgage that exceeds the Fannie Mae and Freddie Mac conforming loan limit of $726,200. Due to the ineligibility of these loans for purchase, guarantee, or securitization by Fannie Mae and Freddie Mac, lenders view them as riskier. Consequently, they frequently have more stringent eligibility requirements.

The eligibility requirements for a Jumbo loan include a high credit score of 700 and above, a sizeable down payment of at least 10%, a DTI ratio of less than 43%, and cash reserves of 6 – 12 months of mortgage payments.

• HUD Section 184 Loans

The U.S. Department of Housing and Urban Development (HUD) established the HUD Section 184 Loan, also known as the Indian Home Loan Guarantee Program, to assist Native American and Alaska Native families in obtaining property ownership. This program offers loans with favorable terms to eligible Native Americans so they can purchase, build, or renovate residences on federally recognized trust land.

The following are the eligibility requirements for the HUD Section 184 Loan program:

• • • Tribal Membership

The creditor must belong to a federally recognized American Indian or Alaska Native tribe or group. Membership verification will be required.

• • • Occupancy

The home being purchased, constructed, or renovated must be the borrower’s primary residence.

• • • Creditworthiness

Even though the Section 184 program is typically more lenient regarding credit scores than conventional loans, applicants must still demonstrate their ability to repay the loan. Consideration will be given to previous credit history, employment history, and other factors.

• • • Down Payment

This program features a low down payment requirement. For financing over $50,000, a 2.25 percent down payment is required. For loans under $50,000, the required down amount is 1.25 percent.

• • • Property Requirements

The residence must be on restricted lands or reservations or in a HUD-approved Indian operating area. In areas like Spokane Valley, you must verify that the properties satisfy this requirement.

Apply for Spokane Valley Home Purchase Loan

Capital Home Mortgage is a full-service mortgage lender that offers many mortgage products, including FHA, VA, Conventional, USDA, Jumbo, HUD Native American, and Reverse Mortgages. We appreciate your interest in Capital Home Mortgage, your full-service mortgage lender. We anticipate assisting you with your home loan requirements. 

To speak with one of our Home Loan Specialists, dial (509) 413-0502.