FHA - Not the FHA Your Parents Knew!
FHA Loans are coming back! The changes made to FHA loan products over the last two years by HUD have been seismic to say the least.
HUD's overall effort to make the processing of FHA loans easier and more cost-efficient so that lenders will be better able to offer FHA-insured loans and expand the availability of affordable financing for potential homebuyers.
Best of all, this doesn't even include the FHA Reform legistlation in Congress right now.
Below are key reasons you should rediscover FHA again!
Downpayment Assistance Programs
Downpayment assistance from Down Payment Assistance Programs (DPA, DAP's) helps people by providing gift funds of typically 3-6 percent of a home's purchase price for a down-payment or closing costs. This gift is provided to borrowers who qualify for an FHA purchase loan and who buy their home from either a builder or seller.
Benefits of an FHA Mortgage
FHA offers low downpayment options, eligibility with less than perfect credit, a loan at reasonable cost, and help if there is ever trouble making the mortgage payment. Because an FHA mortgage insures the lender against loss, an FHA mortgage typically has an interest rate that is competitive with the best in your market and lower than the rates charged for sub-prime and other non-prime mortgages.
FHA not only helps people buy a home, but helps them keep it as well. In return for protecting lenders against loss, FHA requires financial institution to offer assistance to borrowers experiencing difficulty making mortgage payments.
10 Fast FHA Facts
- No credit score required
- No prepayment penalty
- Manuel underwriting acceptable and allowed on all programs
- Maximum financing allowed on Manufactured Homes (purchase/cash-out)
- Qualifying ratios 31%/43% (may be higher with compensating factors or TOTAL Scorecard AUS Approve/Eligible findings)
- 100% gift funds can be used for minimum 3% required investment
- Appraisal VC Sheets, Homebuyers Summary, and most repair requirements eliminated
- Buy and repair home with one loan (203 "Streamlined (k)", 203 (k), EEM)
- Fully assumable mortgage (credit qualifying)
- Loss mitigation/foreclosure prevention on every FHA loan insured
FHA Manufactured Housing Guidelines (The Basics)
- Each unit must have a HUD label (I.D. Tag(s))
- Must have been manufactured on or after June 15, 1976
- Must be affixed to permanent foundation
- o Per FHA guidelines
- Can only have been moved from factory to site once
- o Factory to dealer lot to home site (OK)
- o Home site to another home site (NOT OK)
- Must be taxed as real property
- Must have engineer's certification that permanent foundation meets FHA guidelines
- Can purchase land and home with one loan
- If borrower already owns land, can be used for minimum required investment
Tony,
How do I go about writing a loan for purchase and repair? What factors are going to be considered here?
Chris
Posted by: Chris Alicki | August 09, 2007 at 03:09 PM