Question 1

What loan types work best in Tehama County?

Accepted Answer

USDA and FHA are the strongest fits for most buyers here. Rural eligibility and low down payments make both very practical in this area.

Question 2

Does Tehama qualify for USDA loans?

Accepted Answer

Most of Tehama County qualifies for USDA rural loans. That means zero down payment for eligible buyers who meet income limits.

Question 3

What credit score do I need to buy in Tehama?

Accepted Answer

FHA lenders typically want a 580 minimum. Conventional lenders usually require 620 or higher.

Question 4

How much do I need for a down payment?

Accepted Answer

USDA and VA loans require zero down. FHA needs 3.5%. Conventional starts at 3% for qualified buyers.

Question 5

What is a conforming loan?

Accepted Answer

A conforming loan meets Fannie Mae and Freddie Mac guidelines. These loans typically carry lower rates than jumbo or non-QM options.

Question 6

What is an FHA loan?

Accepted Answer

FHA is a government-backed loan with flexible credit and low down payment requirements. It's one of the most used programs for first-time buyers in rural counties.

Question 7

Can veterans use VA loans in Tehama County?

Accepted Answer

Yes. VA loans work anywhere in California, including Tehama. Eligible veterans get zero down and no private mortgage insurance.

Question 8

What is PMI and when do I pay it?

Accepted Answer

PMI stands for private mortgage insurance. You pay it on conventional loans when your down payment is under 20%.

Question 9

How do I get rid of PMI?

Accepted Answer

Once your loan balance drops to 80% of the home's value, you can request PMI removal. Lenders must cancel it automatically at 78%.

Question 10

What is a USDA loan income limit?

Accepted Answer

USDA income limits vary by household size and county. Check the current USDA eligibility map — limits adjust annually.

Question 11

What documents do I need to apply for a mortgage?

Accepted Answer

Expect to provide two years of tax returns, two months of bank statements, and recent pay stubs. Self-employed borrowers need additional documentation.

Question 12

How long does mortgage approval take?

Accepted Answer

Most purchases close in 21 to 30 days. USDA loans can take 30 to 45 days due to the extra rural eligibility review.

Question 13

What are closing costs in California?

Accepted Answer

Closing costs typically run 2% to 5% of the loan amount. In rural areas like Tehama, appraisal and title fees can vary by property type.

Question 14

Can I roll closing costs into my loan?

Accepted Answer

On USDA loans, you can finance closing costs if the home appraises high enough. Sellers can also contribute toward costs in most loan programs.

Question 15

What is a bank statement loan?

Accepted Answer

Bank statement loans use 12 to 24 months of deposits to verify income instead of tax returns. They're built for self-employed borrowers whose write-offs reduce taxable income.

Question 16

Who should consider a 1099 loan?

Accepted Answer

Freelancers, contractors, and gig workers who file 1099s often qualify through this program. It uses 1099 income directly rather than tax return net income.

Question 17

What is a DSCR loan?

Accepted Answer

DSCR stands for Debt Service Coverage Ratio. Investors use it to qualify based on rental income rather than personal income.

Question 18

Are DSCR loans good for Tehama County rentals?

Accepted Answer

DSCR works if the property's rent covers the mortgage payment. Rural rental markets can be thin, so verify rental demand before committing.

Question 19

What is a hard money loan?

Accepted Answer

Hard money loans are short-term, asset-based loans from private lenders. They close fast but carry higher rates — best for fix-and-flip or bridge situations.

Question 20

What is a bridge loan?

Accepted Answer

A bridge loan lets you buy a new property before selling your current one. It's a short-term solution, usually 6 to 12 months.

Question 21

What is an ARM loan?

Accepted Answer

ARM stands for Adjustable Rate Mortgage. Your rate is fixed for an initial period, then adjusts annually based on market indexes. Rates vary by borrower profile and market conditions.

Question 22

When does an ARM make sense?

Accepted Answer

ARMs work well if you plan to sell or refinance within five to seven years. You get a lower starting rate without paying for long-term fixed stability you won't use.

Question 23

What is a construction loan?

Accepted Answer

Construction loans fund home building in stages as work is completed. Once construction ends, they typically convert to a permanent mortgage.

Question 24

Can I build on rural land in Tehama County?

Accepted Answer

Yes, but lenders scrutinize rural land loans carefully. You'll need a licensed contractor, approved plans, and often a larger down payment.

Question 25

What is an asset depletion loan?

Accepted Answer

Lenders divide your liquid assets over a set number of months to create a monthly income figure. Retirees with savings but no W-2 income often use this.

Question 26

What is an ITIN loan?

Accepted Answer

ITIN loans are for borrowers who don't have a Social Security number but do have an Individual Taxpayer Identification Number. Not all lenders offer them — we have access to several who do.

Question 27

What is a reverse mortgage?

Accepted Answer

Reverse mortgages let homeowners 62 and older access home equity without monthly payments. The loan is repaid when the home is sold or the borrower moves out.

Question 28

What is a HELOC?

Accepted Answer

A HELOC is a Home Equity Line of Credit. You draw from it as needed and pay interest only on what you use.

Question 29

What is a home equity loan?

Accepted Answer

A home equity loan gives you a lump sum against your equity at a fixed rate. Unlike a HELOC, you get all the money upfront.

Question 30

How is an FHA loan different from a conventional loan?

Accepted Answer

FHA allows lower credit scores and a smaller down payment. Conventional loans drop PMI once you hit 20% equity — FHA mortgage insurance can last the life of the loan.

Question 31

What is a jumbo loan?

Accepted Answer

Jumbo loans exceed conforming loan limits set by Fannie Mae and Freddie Mac. They require stronger credit, larger down payments, and more reserves.

Question 32

Are jumbo loans common in Tehama County?

Accepted Answer

Rarely. Home prices in Tehama County tend to stay well within conforming limits. Most buyers here won't need a jumbo loan.

Question 33

What is a profit and loss loan?

Accepted Answer

P&L loans use a CPA-prepared profit and loss statement instead of tax returns to verify self-employed income. They're faster to qualify for when your returns understate your earnings.

Question 34

What is a community mortgage?

Accepted Answer

Community mortgage programs are designed for moderate-income borrowers. They often offer reduced PMI and flexible income guidelines compared to standard conventional loans.

Question 35

What is an interest-only loan?

Accepted Answer

You pay only interest for a set period, usually 5 to 10 years. After that, the loan recasts and you pay principal plus interest.

Question 36

What is a portfolio loan?

Accepted Answer

Portfolio loans are kept by the lender instead of sold to Fannie or Freddie. That gives lenders more flexibility on credit and income guidelines.

Question 37

What is an equity appreciation loan?

Accepted Answer

These loans let you access future equity gains in exchange for a share of appreciation. They work differently than HELOCs and carry distinct repayment terms.

Question 38

Can foreign nationals buy in Tehama County?

Accepted Answer

Yes. Foreign national loans are available for non-US citizens purchasing investment or vacation property. Down payment requirements are typically higher.

Question 39

How does a mortgage broker differ from a bank?

Accepted Answer

A broker shops your loan across many lenders. A bank only offers its own products. Brokers often find lower rates because of wholesale lender access.

Question 40

Why use SRK CAPITAL for a Tehama County purchase?

Accepted Answer

We access 200+ wholesale lenders and match your profile to the right program. Rural markets like Tehama need a broker who knows USDA, FHA, and non-QM options cold.

Mortgage FAQs for Tehama, CA Homebuyers