During your mortgage shopping experience, you may hear your loan officer mention certain requirements for federally-related mortgages in KC. For instance, loan officers are required to produce an HUD-1 statement for federally-related mortgages but not necessarily for other home loans.

While the exact definition of a federally-related mortgage may sound convoluted and confuse anyone outside the mortgage industry, the basic qualifications for federally-related mortgages in KC can be outlined relatively simply. All federally-related mortgages must be permanently financed, include a residential property, and be regulated by a government agency.

Permanent Financing

Mortgages in KC can be divided into two categories: temporary financed and permanent financed. If your debt will be paid in less than a year, it is considered “temporary financing,” and is exempt from some of the requirements of a federally-related mortgage. However, if your mortgage pay-off period exceeds 12 months, it is considered a “permanently financed mortgage” and may be eligible for federally-related mortgage policies.

Residential Property

Much like mortgages in KC, Kansas City property can also be divided into two categories: commercial and residential. Commercial property is developed primarily for business and mortgages for commercial property are typically not federally-related. However, certain types of residential property, or property developed for living purposes, may be subject to federally-related mortgage requirements.

Improved Residential Property

One type of residential property that is eligible for a federally-related mortgage in KC is an improved property. Generally, any building constructed on your land is considered an improvement. However, for a residential property to be considered officially “improved” by the federal government, it must have certain utilities and services such as:

  • Electricity
  • Sewer
  • Water
  • Other capabilities

These utilities add value to the property, therefore “improving” it.

Construction of 1-4 Family structures

You may also be able to use federally-related mortgage in KC for the construction of a new home or 1-4 family structures.

Mortgages Regulated by a Government Agency

If your mortgage is regulated by a government agency, it is most likely a federally-related mortgage. The most common government agencies are:

However, even if your mortgage is not directly related to one of these institutions, your lender may still be backed by a government agency. Always talk to your loan officer if you are unsure about your home loan’s status.

Have More Questions About Mortgages in KC?

Talk to a Cornerstone Loan Officer today at (800) 965-9910