Home Purchase Loans In Spokane Washington

As a prospective homebuyer in Spokane, Washington, it is crucial to know the mortgage market. Following pandemic-induced hysteria, the Spokane housing market has begun to normalize with a decrease in sales and a decline in prices from record highs. This may relieve those seeking to purchase a residence in this area. Mortgage rates in the United States have risen, reaching their highest point since last year.

Buying a property in Spokane, Washington, is enticing due to the city’s affordability, four-season climate, and abundance of recreational opportunities. Despite a competitive market, numerous homeownership-supporting resources and programs are available to prospective purchasers. 

Spokane Home Loan Programs

The following home loan programs are the most prevalent options available for home buyers in Spokane:

• Conventional Loans

In Spokane, Washington, a conventional mortgage is a type of home loan not insured by a government agency such as the Federal Housing Administration (FHA) or the Veterans Administration (VA). This loan follows the rules established by Fannie Mae and Freddie Mac, two Government Sponsored Enterprises (GSEs).

Those with an excellent credit history and a sizable down payment typically opt for conventional loans. Conventional mortgages require a minimum down payment of 5% to 20% and can finance up to 97% of the home’s value. The borrower’s employment and credit history are considered during the loan approval process.

Conventional loans could either be conforming or non-conforming.

• • • Conforming Loans

Conforming conventional loans adhere to the maximum loan amount established by the Federal Housing Finance Agency (FHFA) and additional standards outlined by Fannie Mae and Freddie Mac. The borrower must satisfy minimum income and credit score requirements to qualify for this type of loan. The loan limits fluctuate annually and are higher for properties in high-cost-of-living areas.

In Spokane, Washington, the conforming loan limit for a single-family home in 2023 is $726,200. The loan limit for a duplex is $929,850; a triplex is $1,123,900, and $1,396,800 for a fourplex, respectively.

• • • Non-Conforming Loans

Non-conforming conventional loans do not follow the guidelines established by the FHFA, Fannie Mae, or Freddie Mac and thus frequently exceed the loan limits. They may also have different underwriting requirements. These are typically used for luxury properties or in areas with high cost of living where the conforming loan limit may not be sufficient to cover the cost of the home.

• FHA Loans

FHA home loans, often known as Federal Housing Administration loans, are federally insured mortgage loans. They are intended to assist persons not qualifying for traditional loans in purchasing a property. FHA loans are popular because they have lower down payment requirements and more lenient credit score eligibility standards than conventional loans.

A minimum credit score of 580 is required for an FHA loan in Spokane with a 3.5% down payment. If a borrower’s credit score lies between 500 and 579, they may still be eligible, but they must make a 10% down payment. In addition to meeting specific debt-to-income ratio requirements, applicants must provide financial statements.

Available FHA loans include purchase, rehabilitation, repair, energy-efficient, and reverse mortgages. Spokane’s FHA loans are also available to first-time homebuyers.

Regarding loan limits, the maximum FHA loan amount for a single-family home in Spokane County in 2023 is $472,030. The loan limit for a duplex is $604,400; a Triplex is $730,525, and $907,900 for a fourplex, respectively.

• VA Loans

VA home loans in Spokane, Washington, are mortgage options made available by the Department of Veterans Affairs to active service members, military veterans, and their dependents. These loans provide prospective homebuyers with several financial benefits. There are no down payment requirements, competitively low-interest rates, no requirement for private mortgage insurance, and limited closing costs.

Private lenders, such as banks and mortgage companies, provide VA home loans, not the VA itself. The VA guarantees a portion of the loan, allowing the lending institution to offer more favorable terms. Local lenders in Spokane, such as Capital Home Mortgage, specialize in VA loans and other mortgage options.

The steps to get a VA home loan are almost identical everywhere. But the VA has different rules for Spokane, Washington. These can include rules about energy efficiency, pest inspections, and environmental risks, and borrowers must meet these rules for a loan to be approved. VA loans do not have a maximum dollar amount, but lenders who sell their VA loans in the secondary market must limit the size of those loans.

• USDA Loans

Spokane, Washington, offers a variety of USDA home loan options, each with its own advantages.

• Single Family Housing Direct Home Loans

This program, also known as the Section 502 Direct Loan Program, assists low- and very-low-income applicants in eligible rural areas in securing decent, secure, and sanitary housing. It provides payment assistance, a form of subsidy that reduces the mortgage payment temporarily. The family’s income determines the quantity of assistance after adjustments. In June 2023, however, funding from the American Recovery and Reinvestment Act for this program was eliminated.

• USDA Rural Development Guaranteed Home Loans

Spokane’s surrounding areas qualify for this type of loan. This program, also known as the “USDA guaranteed loan” or the “USDA rural housing loan,” encourages property ownership among low- and middle-income families. No down payment is required, and you can finance your closing costs (loan origination, appraisal, mortgage insurance, etc.) into the loan. Compared to conventional loans, their eligibility requirements are relatively simple.

• Rural Housing Site Loans

This program offers two forms of loans to families with low and moderate incomes. Section 523 loans may only be used to acquire and develop sites for housing to be built using the Self-Help method. In contrast, Section 524 loans may be used to acquire and develop sites for low- or moderate-income families regardless of the construction method.

A household’s income must meet specific requirements to qualify for many USDA loans. Additionally, the property must be located within a USDA-approved rural area. By visiting the USDA Income and Property Eligibility Site, you can determine if a property is in an eligible area and assess the prospective eligibility of an applicant or household.

• Jumbo Loans

Jumbo loans in Spokane, Washington, are a type of mortgage financing used to acquire properties with higher values than can be covered by conventional loans. They are intended to assist a limited group of prospective homeowners with purchasing high-priced homes, such as luxury homes or properties with an above-average value.

A jumbo loan is a non-conforming conventional mortgage loan that exceeds the conforming size limit for sale to Fannie Mae and Freddie Mac. Spokane’s 2023 conforming loan limit is $726,200. Any loan exceeding this threshold is designated a jumbo loan. Some counties, including the Seattle metropolitan area, have higher jumbo loan limits.

However, because jumbo loans involve more considerable sums of money, they typically have more stringent requirements and higher interest rates than conforming loans. For instance, they frequently require a lower debt-to-income ratio (DTI) and excellent credit from debtors. Before proceeding, prospective consumers must consult with our Jumbo loan professional regarding the specific terms and requirements of Jumbo loans in Spokane, as these can vary.

Apply for a Home Purchase Loan in Spokane Washington

Homebuyers in Spokane should consider Capital Home Mortgage Spokane for their home purchase loan due to several advantages. Capital Home Mortgage Spokane has a history of thousands of satisfied clients, demonstrating our dependability and dedication to providing superior service. We offer a variety of loan options, such as home purchase loans, home refinance loans, and even specialized loans, such as jumbo home loans, FHA/VA loans, and reverse mortgage loans, to ensure we meet the unique needs and financial situations of a wide range of clients.

Call (509) 413-0502 to speak with one of our Spokane Home Loan Experts about your Spokane mortgage needs.