Financing Options in Puerto Rico
Types of Loans
Puerto Rico has various home financing solutions, just like mainland U.S.
Agencies such as the Veterans Administration (V.A. Loans) offer up to 100% of the sales price of the property, should it fall within their lending criteria, available to former armed forces and some Federal employees with a valid Certificate of Eligibility. In most situations, if the veteran borrower stays at or below the annual lending limits, he or she will not need a down payment. However, if the loan size exceeds the county limit, a down payment may be required. VA Loan limits in Puerto Rico is $484,350.
For primary home residence, the Federal Housing Administration loans (FHA) has lending loan to values are at 97% of the sales price or appraisal value, whichever is the lesser of the two. This allows buyers to come into the transaction with a very small down payment. FHA Loan Limits for Puerto Rico, visit this link: FHA Loan Limits Puerto Rico 2019
Rural Development loans
The program’s full name is the USDA Rural Development Guaranteed Housing Loan Program, but most people call them “USDA loans”, “Rural Housing Loans” or “Section 502 loans”. Eligible closing costs, fees and charges may be included, Rural and some suburban areas eligible. 100% loan to value-based the present value of the property or appraisal.
Ideal to purchase and restore repossessed properties. The 203K Loan program provides funds for both the purchase and the renovation of a home, packaged into one mortgage loan.3.5% down payment.
Non-conforming loans, or loans that do not traditionally meet conventional mortgage loan guidelines and programs, are available for Borrowers who do not qualify for traditional conforming loans. As a loan alternative to traditional mortgage products, these programs may require additional documentation and include upfront costs, fees and charges in addition to less-competitive interest rate options available through traditional mortgage programs. Loan-to-Value availability up to 89% without private mortgage insurance
The Conventional Loan is a traditional mortgage loan offered largely through the secondary market private agencies Fannie Mae and Freddie Mac. Rather than being insured by the Federal Government, conventional mortgage loans are insured by private mortgage insurance companies. If you qualify, conventional mortgage loans offer many advantages and they are often more affordable. Amount of the loan (available in amounts from $10,000 to $417,000). 97% loan to value. Available for a variety of property types including Single Family Dwellings, 2-4 units, Townhomes, Planned Unit Developments, Approved Condominiums, Second Homes, and Residential Investment Properties.
A lesser known, but extremely convenient product, especially for land, mixed material construction or wooden homes, is the available lending products offered by locally privately owned Cooperatives. These banks are owned by stockholders who are required to become members in order to qualify for their products by way of purchasing a nominal amount of stock with the institution.
They have their own particular lending criteria, but in some instances can be somewhat more flexible or creative in how they grant approval for loans. We highly recommend these institutions when a client is requiring land financing, as their loan to values are up to 85% with very low-interest rates and terms of up to 25 years for repayment.
DISCLAIMER: All costs stated on this page are estimates. This article should not be regarded as offering a complete explanation of Financing, taxation or legal matters in Puerto Rico. No person, entity or corporation should rely on this article in whole or in part and readers are advised to obtain comprehensive advice in relation to their personal circumstances from a qualified professional person or firm of advisors prior to taking any action.