Grant Shippel · Princeton Mortgage

Your Lending Cheat Sheet

A quick-reference guide to the loan products I work with. Tap a category, find your scenario.

Core Products

The loans that cover the majority of buyers. If your client is salaried with documented income, start here.

Conventional

Conventional Loan

Fannie Mae / Freddie Mac

Overview

  • 3% minimum down for first-time buyers, 5% for repeat buyers
  • No upfront mortgage insurance premium
  • PMI drops off at 20% equity
  • Works for primary, second home, or investment

Strengths

  • Flexible down payment
  • No MIP at close
  • PMI is removable

Heads Up

  • 620+ credit required
  • PMI applies under 20% down
  • Stricter DTI than FHA

Best for: a buyer with solid credit and documented income, whether they're salaried or self-employed. Flexible on down payment and works for primary homes, second homes, and investment properties.

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FHA

FHA Loan

Federal Housing Administration

Overview

  • 3.5% down minimum (10% if credit is 580 or below)
  • More flexible on credit and debt-to-income
  • Upfront MIP of 1.75% + monthly MIP for life of loan
  • Primary residence only

Strengths

  • Low down payment
  • Easier to qualify
  • Gift funds allowed

Heads Up

  • MIP stays for life of loan
  • Loan limits apply by county
  • Some sellers prefer conventional offers

Best for: first-time buyer with limited savings or a credit score in the 580–660 range who needs the most accessible path to ownership.

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VA

VA Loan

U.S. Department of Veterans Affairs

Overview

  • 0% down for eligible veterans and active-duty
  • No monthly mortgage insurance
  • One-time VA funding fee (can be rolled in)
  • Competitive rates, flexible underwriting

Strengths

  • No down payment required
  • No PMI ever
  • Strong rate advantage

Heads Up

  • Requires VA eligibility (DD-214 or active duty)
  • One-time funding fee at close
  • Primary residence only

Best for: any eligible veteran or service member. This is the best loan in the market for those who qualify. Full stop.

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USDA

USDA Loan

Rural Development Program

Overview

  • 0% down for eligible rural and suburban areas
  • Income limits apply (based on household size)
  • Upfront guarantee fee + small annual fee
  • Surprisingly broad eligible map, including some Nashville suburbs

Strengths

  • Zero down payment
  • Low mortgage insurance cost
  • Competitive rates

Heads Up

  • Property must be in an eligible area
  • Household income limits apply
  • Longer processing than conventional

Best for: moderate-income buyer eyeing a home outside city limits. Worth checking the USDA eligibility map before ruling it out.

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Tennessee Programs

State-backed programs for Tennessee buyers. If your client is buying in Tennessee, always ask if they qualify for one of these first.

State Program

THDA Great Choice

Tennessee Housing Development Agency

Overview

  • 30-year fixed rate mortgage backed by the state of Tennessee
  • Down payment assistance up to 6% of the loan amount available through Great Choice Plus
  • Income and purchase price limits apply by county
  • First-time buyer required, or must not have owned in the past 3 years
  • 640+ credit score required
  • Homebuyer education course required before closing

Strengths

  • DPA can cover most or all of the down payment
  • Stacks with FHA, VA, or USDA
  • Below-market rate

Heads Up

  • Income and purchase price limits vary by county
  • Homebuyer education certificate required before closing
  • Federal recapture provision applies if home is sold within 9 years

Best for: a first-time Tennessee buyer who qualifies on income and needs help with the down payment. The DPA alone can be the difference between buying now or waiting another year.

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Tennessee Heroes

Homeownership for Heroes

THDA Program for First Responders and Military

Overview

  • A variant of the THDA Great Choice loan with a 0.5% rate reduction baked in
  • Available to active duty, National Guard, retired military, state and local law enforcement, firefighters, EMTs, and paramedics
  • First-time buyer requirement is waived for eligible heroes
  • Can be paired with Great Choice Plus down payment assistance
  • Works with VA, USDA, or FHA financing

Strengths

  • Rate reduction on top of an already competitive state loan
  • First-time buyer requirement waived
  • Stacks with DPA through Great Choice Plus

Heads Up

  • Limited to specific hero professions, confirm eligibility first
  • Homebuyer education course required before closing
  • Federal recapture provision applies if home is sold within 9 years

Best for: a Tennessee first responder, law enforcement officer, or military borrower who wants the best state-backed rate available. If your client serves the community, ask about this before anything else.

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Outside the Box

Specialty loan types for buyers with a specific situation. Fixer-uppers and new builds.

Renovation

FHA 203(k)

Purchase + Renovation in One Loan

Overview

  • Finances the purchase price and renovation costs together
  • Two versions: Limited (up to $35k in repairs) and Standard (larger projects)
  • FHA credit and down payment requirements apply (3.5% down)
  • Renovation funds held in escrow, released as work is completed

Strengths

  • Buy and fix in one close
  • Low down payment
  • Opens up more inventory

Heads Up

  • Contractor must be HUD-approved
  • Timeline is longer than a standard purchase
  • Standard version requires structural or safety work, not cosmetic only

Best for: buyer who wants to get into a home that needs work and doesn't have separate renovation savings. Good for buying in a competitive market by targeting homes others pass on.

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New Build

Construction Loan

Build-to-Perm Financing

Overview

  • Short-term financing that converts to a permanent mortgage at completion
  • Funds released in draws as construction milestones are hit
  • One close option available (avoids two separate closings)
  • Requires builder approval and construction timeline

Strengths

  • One loan from dirt to keys
  • Lock rate at start
  • Customized build

Heads Up

  • Needs more lead time than a standard purchase
  • Appraisal is based on plans, not a finished home
  • Builder must be approved before closing

Best for: buyer who wants to build rather than buy existing, or can't find the right home in current inventory. Let's talk early. Construction loans need lead time.

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Self-Employed Buyers

Tax returns don't always tell the full story. These products look at actual cash flow instead.

Non-QM

Bank Statement Loan

12 or 24 Months of Deposits

Overview

  • Qualifies self-employed buyers, business owners, freelancers, and contractors without W-2s
  • Income calculated from 12 or 24 months of deposits, not tax returns
  • Reflects actual cash flow for buyers whose write-offs reduce taxable income on paper
  • Typically requires 10 to 20% down and 640+ credit

Strengths

  • No tax return required
  • Reflects real cash flow
  • Opens the door for W-2-less buyers

Heads Up

  • 12 or 24 months of personal or business bank statements required
  • Expense ratio on business accounts reduces qualifying income
  • 10 to 20% down required

Best for: business owner or self-employed buyer whose write-offs make their taxable income look low, but whose bank account tells a different story.

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Non-QM

P&L Only Loan

Profit & Loss Statement Income

Overview

  • Qualifies buyers using a CPA-prepared profit and loss statement instead of tax returns
  • Good fit for newer businesses or buyers with minimal banking history
  • No bank statements required in some programs
  • Stronger credit and down payment requirements apply

Strengths

  • Minimal documentation
  • Good for newer businesses
  • Fast qualification

Heads Up

  • CPA-prepared P&L statement required, 12 months minimum
  • Fewer lender options than bank statement
  • Stronger credit and down payment requirements than conventional

Best for: self-employed buyer with clean books but a complicated tax situation who wants the simplest possible documentation path.

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Investor Loans

Whether it's a single rental or a portfolio play, these products are built for income-property buyers.

Investment

DSCR Loan

Debt Service Coverage Ratio

Overview

  • Qualifies based on rental income, not personal income
  • DSCR = monthly rent divided by monthly payment (1.0+ preferred)
  • No W-2 or tax return needed for qualification
  • 20–25% down typical, 640+ credit

Strengths

  • No personal income docs
  • Scales across multiple properties
  • Works for LLCs

Heads Up

  • Rent must cover the payment at 1.0+ DSCR
  • 20 to 25% down required
  • Must qualify through the property, not personal income

Best for: investor who wants to qualify on the property's cash flow rather than their personal tax return. Common for buyers building a rental portfolio.

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Investment

Conventional Investment

Fannie / Freddie Standard Income

Overview

  • Standard Fannie/Freddie guidelines for non-owner-occupied properties
  • 15–25% down depending on property type
  • Personal income used to qualify (W-2 or tax returns)
  • Can hold up to 10 financed properties under guidelines

Strengths

  • Better rates than DSCR
  • Well-understood process
  • Multi-property eligible

Heads Up

  • Full personal income docs required
  • DTI is a real constraint
  • Rate is higher than a primary residence loan

Best for: salaried buyer or investor who has strong personal income and wants the best rate available for a rental property without going non-QM.

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Buyer Tools

Not a loan product on its own, but a tool that pairs with a conventional, FHA, VA, or jumbo purchase. These are for buyers with a specific problem that a standard mortgage alone won't solve.

Contingency Solution

Buy Before You Sell

Equity Unlock for Repeat Buyers

Overview

  • Unlocks up to 75% of the equity in your client's current home as a down payment on the next one
  • Removes the home-sale contingency so your client can write a non-contingent offer
  • Omits the departing residence mortgage from the debt-to-income ratio on the new loan
  • A 120-day purchase commitment on the departing home provides a safety net if it doesn't sell on the open market
  • Program fee is 2.4% of the final sale price of the departing home, paid at close (minimums apply under $375k sale price)

Strengths

  • Contingency-free offers win in competitive Middle TN markets
  • Equity Unlock is structured at 0% interest
  • 24-hour approval on the departing residence once photos are submitted
  • Clients can use funds for down payment, closing costs, mortgage coverage, moving, and listing prep
  • Risk on the departing residence sits with the program, not your client

Heads Up

  • The 2.4% fee is the real cost. Additional fees may apply. Always review the full term sheet before committing.
  • If the home doesn't sell in 120 days, the backstop purchase happens at the program's valuation, not market. Price the departing home to move.
  • Property restrictions are tight: no tenants, no active renovations, under 5 acres, value over $100k, expected DOM under 90
  • Condos and HOAs require additional approval. No VA, FHA, or reverse mortgages on the departing residence.
  • Not eligible if the departing or incoming residence is a second home or investment property
  • Inspection is required on departing homes over 5 years old once under contract

How the math works

Departing Residence

Expected sale price$500,000
Current mortgage$250,000
Equity Unlock (down payment)$125,000
Program fee at sale (2.4%)$12,000

New Purchase

Purchase price$600,000
Down payment$125,000
New mortgage$475,000
Recast optionAfter old home sells

Sample transaction. Actual numbers depend on the departing home's appraisal, program valuation, and final sale price.

Best for: a repeat buyer in a competitive market who needs the equity in their current home to fund the next purchase but can't afford to make a contingent offer. Especially useful in Williamson and Davidson counties where multiple-offer situations punish contingent buyers. Not the right fit if the departing home is a rental, a fixer, or unlikely to move quickly at market price.

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Not sure which fits your client?

Send me the scenario. I'll tell you straight which product makes sense and what they'd need to qualify.

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Grant Shippel · NMLS# 2750635 · Princeton Mortgage · Nashville, TN
This page is for informational purposes only. All loans subject to approval. Terms and availability vary.

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