"Borrowers can only use these loans on their primary residence and cannot own another property while buying a home with this loan," Mr. Donnelly said. "These are portfolio loans, so we do manual underwriting, which allows us to make case-by-case decisions and to use compensating factors such as extra cash reserves that can overcome a lower credit score. We do expect good credit, generally at least above 620 or higher. ... We are not flexible at all on the debt-to-income ratios because we want to make sure the mortgage is affordable to the borrowers."
Frank Donnelly, vice president of the Mortgage Bankers Association of Metropolitan Washington, says low- or no-down-payment loans are different and safer than they were a few years ago.