Loan Programs Available

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 Conventional loans are mortgage loans that are not backed by a government agency such as the FHA, VA, or USDA. Instead, they are offered by private lenders and typically conform to the guidelines set by Fannie Mae and Freddie Mac. These loans are a popular choice for borrowers with good credit, steady income, and the ability to make a down payment—as low as 3% for qualified buyers.

Conventional loans come in a variety of terms and structures, including fixed-rate and adjustable-rate options. They also tend to offer more flexibility in terms of property types and loan amounts. For example, unlike FHA, VA, or USDA loans, conventional financing can be used for vacation homes and investment properties. In addition, jumbo or non-conforming loan options are available for borrowers needing higher loan amounts. Because conventional loans are not government-insured, private mortgage insurance (PMI) is typically required if the down payment is less than 20%.

Conventional loans are the most common type of mortgage in the U.S., making up roughly 65–70% of all home loans annually. For most buyers, the decision often comes down to choosing between a conventional loan and an FHA loan. While credit score plays a major role in that choice—with higher scores generally favoring conventional loans—other factors such as loan limits, debt-to-income guidelines, and property eligibility also come into play.

  FHA loans are mortgages backed by the Federal Housing Administration, created to help more people achieve homeownership through flexible qualification standards. They're especially popular among first-time buyers or those with less-than-perfect credit.

FHA loans typically allow for down payments as low as 3.5% and accept lower credit scores than conventional loans. At Mission Mortgage Company, we offer FHA loans to borrowers with credit scores as low as 500, though a minimum 10% down payment is required for scores below 580. 

FHA loans can be used to buy single-family homes, condos, and certain multi-unit properties, but only for primary residences. However, FHA refinances are available for second homes or rentals if the existing loan is FHA.

When deciding between FHA and conventional loans, credit score often plays a key role. Conventional loan interest rates and mortgage insurance costs are more sensitive to credit scores, whereas FHA mortgage insurance rates remain the same regardless of credit, and interest rates only begin to rise significantly for scores below 620. FHA also offers more lenient credit guidelines and typically lower interest rates, which can benefit buyers with limited credit history or higher debt-to-income ratios.

However, FHA loans have some drawbacks. They require an upfront mortgage insurance premium (currently 1.75% of the loan amount), which can be financed into the loan but adds to the overall cost. Monthly mortgage insurance remains for the life of the loan if the down payment is less than 10%. While this is beneficial for lower-credit borrowers, it may lead to higher long-term costs for those with stronger credit.

FHA loans can be an excellent choice, but they aren’t ideal for everyone. It’s important to compare both the short- and long-term costs of FHA and conventional options to determine what best fits your goals and financial situation. Contact us to see which loan is right for you.

  For those that qualify for VA loans, they are usually the best deal going! Some of the benefits of VA loans include:

• No down payment required
• No monthly mortgage insurance
• Better Interest Rates
• More flexible lending guidelines
• More seller credits allowed
• Easier refinances if interest rates drop

Because of those advantages, VA loans are typically the lowest cost and/or lowest out pocket options for home buyers. Additionally, VA home loan benefits can be used more than once, including buyers who already own a property with a VA loan on it (although this might trigger some down payment requirements depending several factors). Most veterans and active duty service members will qualify for VA home loan benefits and National Guard/reservists can qualify once they have accumulated enough retirement points. Some surviving spouses of veterans may also qualify as well as officers of NOAA and the US Public Health Service too! If you’d like to find out more about your VA Home Loan benefits options, give me a call! 

USDA Guaranteed Loans are home loans backed by the U.S. Department of Agriculture, designed to promote homeownership in eligible rural and suburban areas. These loans are part of the USDA’s Rural Development program and are aimed at helping low-to-moderate income families buy a home with favorable terms and lower up-front costs. 

One of the most attractive features of a USDA Guaranteed Loan is the no down payment requirement—borrowers can finance 100% of the home’s purchase price. Additionally, USDA loans typically offer better interest rates and reduced mortgage insurance costs compared to FHA or conventional loans. The upfront guarantee fee and annual fee charged by the USDA are lower than FHA mortgage insurance premiums, and the upfront guarantee fee can be rolled into the loan amount.

To qualify, the property must be in an eligible rural or suburban area as defined by the USDA, which includes many small towns and outlying suburbs. Borrowers must meet income limits that are generally set at 115% of the area median income and must demonstrate the ability to repay the loan through stable income and acceptable credit history. 

USDA loans can be more difficult to qualify for than FHA and conventional loans, which is their main drawback. As mentioned above, you must have enough income to qualify for the loan, but not too much or you won’t be eligible for the program. Additionally, the debt-to-income ratio limits on USDA can be lower than other loan types and the credit score and history requirements can be stricter. Add those tighter guidelines on top of the property location requirements, and USDA can be harder to use than other loan types. But, for people who are looking to buy in eligible areas and can meet the other requirements, USDA is a great option!

In the mortgage world, a Qualified Mortgage, aka a QM Loan, is a type of loan that meets certain standards set by the Consumer Finance Protection Bureau. It limits some loan features (like negative amortization) and requires the lender to document the borrower has enough income to repay the loan. Conventional loans, FHA and VA loans are typically going to fall under the QM Guidelines. 

However, there are many lenders that offer "Non-QM" products. Since they aren't QM loans, they may have loan options that borrowers in specific situations may want to take advantage of. Most Non-QM loans are going to offer alternative ways of documenting income. Below is a sample of some of the non-QM options available, although there are many variations:

• "No Ratio" loans where no income or employment is listed on the loan application
• Bank Statement loans where income is calculated using an average of deposits over the last 12 or 24 months
• DSCR loans are a specific type of loan for rental properties where the actual or potential rental income on the property is used for qualifying, but no other income or debt is considered
• W2 or 1099 only programs look at the income from prior years W2s or 1099s not current YTD or farther back than the most recent year ended

As you can see, QM loans offer a lot of flexibility for borrowers who may want or need it. Because lenders are taking on additional risk by not following standard underwriting guidelines, they do require borrowers to be stronger in the other aspects that lenders evaluate: Down payments, credit history etc. Non-QM loans will generally require at least 10% down or more, will require higher credit scores (although there are options that will go as low as a 660 score), and the interest rates are going to be higher than a Qualified Mortgage might offer. So non-QM loans aren't for everyone, but for certain people who fall outside the traditional mortgage lending box, they are a great alternative. 

Construction loans are a special type of mortgage used to build a new home or undertake a major renovation. These loans provide the financing you need throughout the construction process—turning blueprints into reality. Unlike traditional mortgages, construction loans are based on the future value of the home, not the current value.

Instead of receiving the loan in a single lump sum, funds are released in phases (called “draws”) as construction progresses. This helps ensure the project stays on track and within budget.

How It Works

1. Loan Approval:
   The approval process is similar to a traditional mortgage, with one key difference: the project plans, budget, and builder contract all need to be approved before closing. These documents are provided to the appraiser, who estimates the value of the property as completed—in other words, what the home is expected to be worth once finished.
2. Draw Schedule:
   Funds are released in stages (e.g., foundation, framing, roofing) as specific construction milestones are met.
3. Interest-Only  Payments:
   During the build, you typically pay interest only on the amount disbursed.
4. Conversion Options:
   At completion, the loan may either convert to a traditional mortgage (construction-to-permanent)      or be refinanced.

Types of Construction Loans

• Construction-to-Permanent:  One closing, one loan. Automatically converts to a traditional mortgage once the home is complete.
• Stand-Alone Construction: Two separate loans—one for construction and a second mortgage once the project is finished.
• Renovation Loans: Used for major remodeling or rebuilding on an existing property.

Why Work With Us?

• Guidance through every phase—from lot selection to final walkthrough
• Access  to experienced construction lenders and appraisers
• Flexible options for owner-builders, custom homes, and investment projects

Is a Construction Loan Right for You?

If you're ready to build your dream home, design your own floor plan, or take on a major renovation, a construction loan could be your best financing option. Let’s talk about your project and see how we can make it happen—on time and on budget.

At Mission Mortgage Company, we offer Debt Service Coverage Ratio (DSCR) loans — a powerful option for real estate investors looking to qualify based on property cash flow, not personal income.

What is a DSCR Loan?
DSCR loans are designed for investment property purchases or refinances. Instead of verifying your employment, tax returns, or personal income, lenders evaluate the property's ability to generate enough rental income to cover the monthly loan payments. This makes DSCR loans ideal for self-employed investors or those with complex finances.

How DSCR is Calculated:
Lenders divide the property’s gross monthly rental income by the total monthly mortgage payment (including taxes, insurance, etc.).

• A DSCR of 1.0 means the property breaks even.
• A DSCR above 1.0 indicates positive cash flow.
• Some lenders may accept a ratio below 1.0 in certain situations.
   

Why Investors Choose DSCR Loans:

• No personal income documentation required
• Qualify based on rental income alone
• Ideal for portfolio growth and cash-out refinances
• Available for short-term and long-term rental properties
   

Is a DSCR Loan Right for You?
If you're focused on building a real estate portfolio and want financing that focuses on the strength of the property itself, a DSCR loan might be a perfect fit. We're here to help you explore your options and run the numbers to make sure it works for your goals.