This agency-regulated-product offers a variey of loan terms from 8 years to a maximum of 30.
The interest rate is set at the time of closing and remains constant over the entire loan term.
Transactions with less than 20% invested into the value of the property will typically require Private Mortgage Insurance, which can be removed when certain criteria is met.
Minimum down payment programs are available for qualified applicants.
This is a type of loan that does not fully amortize over its term, meaning the loan will not be paid in full after the 5 years of payments have been made
Thus, a balloon payment is required at the end of the term to repay the remaining principal balance of the loan
Balloon loans can be attractive to short-term borrowers because they typically carry lower interest rates than loans with longer terms
Borrowers must be aware that the balloon payment will pay off the existing balance which could require refinancing, at the risk of a higher interest rate