Community Mortgages
Unlocking Home Ownership
Understanding Community Mortgages
In today's housing market, many individuals face significant challenges in securing home ownership. This primarily due to stringent lending criteria and rising property prices. Despite a growing interest to own a home, many first-time buyers, low-income individuals, and underserved communities struggle. One reason is difficulty meeting the financial requirements set by most lenders. first-time buyers, low-income individuals, and underserved communities struggle. One reason is difficulty meeting the financial requirements set by most lenders.
Community mortgages have emerged as a transformative solution, offering flexible options to those who would not qualify for traditional loans. By expanding access to credit for underserved populations, these loans make home ownership more attainable.
SRK CAPITAL is proud to offer Community Mortgages to qualified clients. This type of loans offers a different path to buy a home. Especially for those that are having trouble qualifying with a traditional home loan.
What are Community Mortgages?
Community mortgages are a US Treasury Department endorsed loan program aimed at helping under-served communities and borrowers access home financing. They focus on making home ownership accessible to those who face challenges with standard mortgage requirements. This home loan program is unique because it completely eliminates the need for income or employment verification. This dramatically simplifies the application process and makes home ownership a reality for more people.
Community Mortgage Key Features and Benefits
Simplified Documentation
Traditional mortgages often need a lot of paperwork, like proof of income and employment. Community mortgages reduce these requirements, making it easier for borrowers. These types of mortgages do not ask for income or employment verification, allowing for a more efficient application process. This makes the application process quicker and more accessible. Especially for individuals with non-traditional income sources, freelancers, or those with seasonal or inconsistent income streams.
Flexible Underwriting
This loan program looks at more than just credit scores. They consider factors like rental history and job stability, allowing more people to qualify. These loans focus on the Five C's of Credit Principles: Character, Capacity, Capital, Collateral, and Conditions. They assess a borrower's overall financial situation rather than relying solely on credit scores. This program allows for the use of non-traditional credit sources for borrowers with limited credit histories. This includes rent payments, utility bills, or references from community members. This broadens the eligibility pool and provides more opportunities for approval.
Support for Under-served Communities
Community mortgages aim to promote home ownership and economic stability within under-served areas. These types of mortgages aim to finance America's diverse homeowners, fairly and responsibly. With a specific focus on under-banked and under-served borrowers and communities. This can include immigrants, first-time home buyers, or individuals that have trouble showing all income sources.
Accessible Loan Terms
This program features a 30-year fixed-rate term, which offers borrowers stability in their monthly payments. Additionally, there is no prepayment penalty, allowing borrowers to pay off their loans earlier without incurring extra fees. The program also does not have balloon payments, reducing financial pressure on borrowers.
Loan Terms and Program Specifics
The program allows for secondary financing (e.g., a second mortgage or home equity line of credit) of up to a 75% total loan-to-value (LTV). But all secondary financing terms must meet certain requirements and can't be seller-held liens.
Loan Types and Amounts
The Community Mortgage program offers a 30-year fixed-rate loan. This provides borrowers with the certainty of stable monthly payments for the full term of the loan. The lowest loan amount is $100,000, making it suitable for a wide variety of home buyers in different price ranges.
The program offers loan-to-value (LTV) ratios of up to 75% for most types of loans, including purchases and rate-and-term refinances. In certain cases, cash-out refinances are allowed, with an LTV limit of 70%. This gives borrowers the flexibility to access home equity for purposes like home improvement or debt consolidation.
Eligibility Requirements
Credit Score
A FICO score of 680 is required for most transactions under the Community Mortgage program. Borrowers with a lower score can still be eligible. But extra compensating factors, like rental history or community involvement, will need to be considered.
Income Documentation
Unlike traditional mortgages, the Community Mortgage program does not need income verification. Borrowers do not need to give tax returns, W-2 forms, or proof of employment. This makes the program ideal for individuals with irregular income streams or those who are self-employed or freelancers.
Property Occupancy
The property must be the borrower's primary residence. Investment properties, vacation homes, and properties located in certain restricted zones are not eligible for financing under this loan program.
Down Payments and Reserves
Borrowers must show that they have reserves. With a 30% down payment, borrowers must be show at least 6 months of mortgage payments in reserves. With a 25% down payment, borrowers must be show at least 12 months of mortgage payments in reserves. Based on a borrower's individual financial situation, extra reserves can be needed.
Eligible Transactions
Buyer Loans
The program supports home purchases with up to 75% LTV. This allows borrowers to secure financing with relatively low down payments, making home ownership more affordable.
Refinance Loans
The program offers rate-and-term refinances with the same LTV limits as buyer loans (75% LTV). For borrowers looking for cash-out refinancing, the program allows for up to 70% LTV. There are some restrictions, so check with an SRK CAPITAL team member to learn more.
Extra Financing Considerations:
Secondary Financing Considerations
This loan program also allows for secondary financing. Examples are second mortgages or home equity lines of credit (HELOCs), up to a total loan-to-value (CLTV) of 75%. This provides borrowers with the flexibility to use extra funding for property-related expenses, like renovations or large purchases. But the secondary financing must meet specific institutional requirements, and seller-held liens are not permitted.
How the Community Mortgage Program Works
Initial Consultation
Meet with our mortgage specialists to discuss your homeownership goals and review your financial situation.
Credit Assessment
We evaluate your creditworthiness using the Five C's of Credit, including non-traditional credit sources.
Property Selection
Find your ideal primary residence property that meets the program requirements.
Loan Approval
Complete the simplified application process and receive your loan approval decision quickly.
Ready to Get Started?
The Community Mortgage program through SRK CAPITAL offers a unique opportunity for homeownership without traditional income verification requirements.
Apply NowThe Impact on the Housing Market
Economic Growth
By enabling more people to become homeowners, community mortgages stimulate local economies and create wealth-building opportunities for families.
Community Development
These loans help revitalize neighborhoods by bringing in new homeowners who invest in their properties and communities.
Market Stability
Responsible lending through community mortgages contributes to a more stable housing market by ensuring borrowers can sustain their homeownership.
Why Community Mortgages Matter
Community mortgages through SRK CAPITAL are more than just loans - they're pathways to building generational wealth and strengthening communities.
No income or employment verification required
Flexible credit evaluation using the Five C's of Credit
Support for underserved communities and first-time buyers
Stable 30-year fixed-rate terms with no prepayment penalties