Frequently Asked Questions (FAQ)

Below are information that could answer most of your mortgage questions.



FHA Loans Frequently Asked Questions

No. You may use any approved FHA lender to complete a FHA streamlined refinance on your The Woodlands property.

Yes. No appraisals are required, so the current value of your home is not factored in for approval.

You need to be current on your mortgage payments at closing and have a good record of payments for the last 12 months.

No. You must be current on your home loan in order to refinance with this program.

According to the FHA, primary residences, second homes and investment properties in The Woodlands qualify for streamlined FHA refinancing. HOWEVER, most lenders will NOT fund second homes or investment properties. Please give us a call at 888-409-0720 to discuss other options for your second home or investment property.

Providing no appraisal is used your property is still eligible to be refinanced.


You either have the choice of paying any applicable closing costs out of pocket so that your loan balance is not increased or paying a slightly higher interest rate and having the lender pay for your closing costs.

FHA does not require any employment or income verification or the calculation of debt-to-income (DTI) ratios. However, lenders often overlay their own additional criteria meaning 95% of these loans will require some form of income verification to show that you can afford the new payments. Give us a call at 888-409-0720 Ext. 404 to discuss your specific situation and options available.

Again, FHA itself has no credit score requirement and does not even require a credit report is pulled. However, individual lenders have their own guidelines. Many require a minimum credit score of 640, though others will accept scores of 620 or even less. If you have issues with your credit, don’t give up. Give us a call at 888-409-0720 Ext. 404 so we can discuss your current credit situation.

No. Unless an appraisal is used and your home has lead based paint, no repairs are required to be made.

MI stands for mortgage insurance. Mortgage insurance is required on FHA loans with an 80% or higher loan-to-value to protect the lender from losses. MI rates on FHA loans were reduced on June 11th 2012 to help more The Woodlands borrowers qualify for streamlined refinances and lower their housing payments providing their loans were endorsed on or before May 31st, 2009.

The FHA requires that borrowers make 6 mortgage payments on their current FHA-insured loan, and that 210 days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.

The FHA requires that borrowers make 6 mortgage payments on their current FHA-insured loan, and that 210 days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.

VA Loans Frequently Asked Questions

Simply put, a VA Home loan allows qualified buyers the opportunity to purchase a home with no down payment. Also, there are no monthly mortgage insurance premiums to pay, limitations on buyer’s closing costs, and an appraisal that informs the buyer of the property value. For most loans on new houses, construction is inspected at appropriate stages and a one year warranty is required from the builder. VA also performs personal loan servicing and offers financial counseling to help veterans having temporary financial difficulties.

Yes. No appraisals are required, so the current value of your home is not factored in for approval.

You can have previously-used entitlement “restored” one time only in order to purchase another home with a VA loan if the borrower has paid off the prior loan but still owns the property, and wants to use his entitlement to purchase a second home. This often occurs with active duty borrowers who PCS to a new station but want to keep their existing home for retirement. However, if the prior loan has been paid off and the property is no longer owned, they can have their entitlement restored as many times as they want. They can re-use their VA eligibility for every home purchase from the first to the last.

Also, veterans who have used a VA loan before may still have remaining entitlement (see chart) to use for another VA loan. A veteran’s maximum entitlement is $89,912, and lenders will generally loan up to four times your available entitlement without a down payment, provided your income and credit qualifications are fine, and the property appraises for the asking price. Lenders may require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less.

You are not eligible for VA financing solely based upon Active Duty for Training in the Reserves or National Guard.

Note: Guard and Reservists are eligible if they were “activated” under the authority of title 10 U.S. Code as was the case for the Iraq/Afghanistan.

The guarantees thirty-year loans with a choice of repayment plans: Traditional fixed payment (constant principal and interest); Graduated Payment Mortgage, or GPM (low initial payments which gradually rise to a level payment starting in the sixth year); and in some areas, Growing Equity Mortgages, or GEMs (gradually increasing payments with all of the increase applied to principal, resulting in an early payoff of the loan). There is no prepayment penalty.

Although there is no maximum VA loan (limited only by the reasonable value or the purchase price), lenders generally limit the maximum VA loan to $417,000.

Everyone is required to obtain a Certificate of Eligibility. If you do not have this Certificate, you will need to apply using VA Form 26-1880 and this will require a copy of DD-214 (Certificate of Release or Discharge from Active Duty) showing character of service. Along with the Certificate of Eligibility, loan applicants will need to document their credit, savings and employment information.


No. Home loan entitlement is generally good until used if a person is on active duty. Once discharged or released from active duty before using an entitlement, a new determination of their eligibility must be made based on the length of service and the type of discharge received.

Eligibility extends to members who have completed a total of 6 years in the Selected Reserves or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and received an honorable discharge; continue to serve in the Selected Reserves. Individuals who completed less than 6 years may be eligible if discharged for a service-connected disability. In addition, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged honorably are eligible.

Yes. But there are several clauses that may make this difficult to accomplish. Many veterans use their VA Home Loan Certificate of Eligibility to negotiate in good faith a private home construction loan and then refinance the completed home using VA Home Loans.

The law requires that you certify that you intend to occupy the property as your home. But it specifically provides that occupancy by the veteran’s spouse satisfies the personal occupancy requirement. However, there are no provisions for other family members. VA Home Loans are available for a variety of purposes including building, altering, or repairing a home; refinancing an existing home loan; buying a manufactured home with or without a lot; buying and improving a manufactured home lot; and installing a solar heating or cooling system or other weatherization improvements. You are also allowed to buy income property consisting of up to four units, provided you occupy one of the units.

No. The property must be located in the United States, its territories, or possessions. The latter consist of Puerto Rico, Guam, Virgin Islands, American Samoa and Northern Mariana Islands.

A private lender makes a VA-guaranteed manufactured home loan. The VA will protect the lender against loss if the veteran or a later owner fails to repay the loan. The amount VA will guarantee is 40 percent of the loan amount or the veteran’s available entitlement, up to a maximum amount of $20,000. The guaranty amount is not the same as the amount a veteran can borrow.

Veterans who had a VA loan before may still have “remaining entitlement” to use for another VA loan. The current amount of entitlement available to each eligible veteran is $36,000. Veterans can have previously-used entitlement “restored” to purchase another home with a VA loan if: the property purchased with the prior VA loan has been sold and the loan paid in full, or if a qualified veteran buyer agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the veteran seller. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full, but has not disposed of the property purchased with the prior VA loan.

When the property is awarded to the Veteran’s spouse as a result of the divorce, entitlement cannot be restored unless the spouse refinances the property and / or pays off the VA loan in full or the ex-spouse is a veteran who substitutes their entitlement.

The Department of Veterans Affairs (VA) acquires properties as a result of foreclosures on VA guaranteed loans. These acquired properties are marketed through a property management services contract with Ocwen Federal Bank FSB, West Palm Beach, Florida. Local listing agents through local Multi Listing Systems (MLS) list the properties. A list of properties for sale may also be obtained from Ocwen’s website at

USDA Loans Frequently Asked Questions

The USDA Loan is a mortgage option available to qualified rural homebuyers. USDA loans are issued by USDA-approved lenders and guaranteed by the U.S. Department of Agriculture (USDA).

When you hear that the USDA loan is guaranteed, it is in reference to the fact that the USDA insures a portion of each loan in the event the borrower defaults on their home loan. This backing, or guarantee, is what gives lenders more confidence in homebuyers and the ability to extend favorable rates and terms.

No, first-time homebuyers and repeat homebuyers alike may use the USDA loan.

There are no maximum loan amount restrictions on USDA loans. An individual’s maximum loan amount is based upon their debts, income and ability to repay.

Closing costs vary by lender and location. With USDA loans, it is possible to use gift funds to pay for your closing costs. You will need to ask your loan officer for a gift letter and provide proof of transfer to accompany your loan application.

The USDA offers three refinancing options to for current USDA borrowers: USDA streamline, streamline-assist and non-streamlined refinance. The USDA does not offer a cash-back option. Learn more about USDA loan refinancing here.

With the USDA loan program, qualified borrowers can purchase a home without a down payment, saving thousands of dollars in upfront costs.


USDA loans have a one-time upfront fee, known as the USDA guarantee fee, which is 1% of the loan amount. Additionally, the USDA has an annual fee that is currently only .35% of the loan amount and financed into the monthly payments. USDA homebuyers can finance the 1% guarantee fee into the total loan to make for a true $0 down loan.

USDA loans are available in 30-year and 15-year fixed rate terms.

USDA loan rates are often lower than comparable, 30-year fixed-rate conventional mortgages due to the USDA guarantee.

With the USDA loan, your home must be located in what the USDA defines as a rural area. Learn more about USDA property eligibility here.

As with any lending program, the USDA requires that the borrower demonstrate a reasonable ability and willingness to repay the mortgage loan. USDA lenders will view your credit history and income to verify your ability to repay the mortgage. You can learn more about USDA credit and income requirements here.

There is no minimum score required by the USDA; however, to use the USDA’s guaranteed underwriting system (GUS), a borrower must have a 640 credit score or higher.

If you’re still working, you must establish employment to be eligible for the USDA loan, and most lenders will require a minimum of two years of steady employment. If you are self-employed, you are eligible, but will be required to provide two years of federal tax returns to verify your income. Retirees may be able to obtain a USDA loan provided they have sufficient stable income.

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