Hud fha updates webinar nov 2, 2010 camp and oamp

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Hud fha updates webinar nov 2, 2010 camp and oamp

  1. 1. Company LOGO U.S. Department of Housing And Urban Development October 2010 FHA TODAY
  2. 2. Today’s Agenda  FHA’s Mission and Goals  Benefits to an FHA loan  How FHA compares to other mortgage programs  FHA Resources
  3. 3. FHA-Established June 28, 1934 Our Mission  Help people realize the “American Dream” of homeownership  Stabilize and Revitalize Communities  Promote Economic Growth  Reduce Defaults/Preserve Neighborhoods
  4. 4. FHA’S Goals  Educate Consumers to make informed choices  Enable individuals to  Own homes  Build equity in their homes  Simplify the home buying process  Removing regulatory barriers
  5. 5. FHA’S Goals (Continued) Provide homeownership and home retention opportunities to the underserved such as:  First time homebuyers  Minorities  The elderly  Embrace innovative financing  Down payment assistance  Silent second
  6. 6. Feel Secure With FHA: Mortgage Insurance  FHA only insures mortgages  Similar to private mortgage insurance  Protects lenders against mortgage loss  Similar to private mortgage insurance  Encourages lender flexibility in loan approval  Additional risk covered by insurance  Protects buyers from unfair practices
  7. 7. FHA Mortgage Insurance (Cont.) Upfront Mortgage Insurance Premium  Also known as: UFMIP  May be financed Monthly Mortgage Insurance Premiums  Also known as: MIP Required on all loan types Money collected is used to pay claims
  8. 8. Mortgagee Letter 2010 – 02 January 2010 Increase Of Upfront Premiums for FHA Mortgage  Effective for case numbers issued on or after April 5, 2010  Purchase money and full credit qualifying refinance  Increased to 2.25%  Streamline refinances – all types  Increased to 2.25%  No change to annual/monthly premiums Changes again in October 2010
  9. 9. Mortgage Insurance Premiums (Cont.) Effective October 4, 2010 Decrease UFMIP/Increase Monthly for case numbers assigned on or after October 4, 2010
  10. 10. Mortgage Insurance Premiums (Cont.) Decrease UFMIP/Increase Monthly for case numbers assigned on or after October 4, 2010
  11. 11. Benefits Of FHA Loans  Ease in qualifying borrower Alternative credit and self-employed – okay Manual underwriting acceptable Qualifying ratios 31%/43% May be higher with compensating factors or automated TOTAL Scorecard approval
  12. 12. Other Benefits No prepayment penalty Fully assumable mortgage  Credit qualifying required Streamlined refinance (Mortgagee Letter 2009 – 32)  FHA loan to FHA Loan  Simplified qualifying
  13. 13. Additional Benefits  Loss mitigation/foreclosure prevention  Forbearance  Loan modification  Partial claim  FHA – Home Affordable Mortgage Program  Short/Compromise Sale with incentives  Deed-in-lieu of foreclosure
  14. 14. Minimum Required Investment  Minimum cash investment – down payment  3.5% of appraised value or sales price Whichever is less  Sales price greater than appraised value then also need to pay difference  No longer calculated on “acquisition cost”  Secretary of HUD has authority to amend minimum required investment  Can set higher, but not lower required borrower investment
  15. 15. Minimum Required Investment – Cont.  May come from borrower’s own funds or  100% gift  Immediate family member/close familial tie  HUD approved non-profit organization  Acceptable secondary financing  Local city, county, and state programs  All seller-assisted down payment assistance eliminated
  16. 16. Minimum Credit Scores and Loan-to-Value Ratios – Continued Maximum loan-to-value limits based on credit scores  Score of 580 or greater 97.75%  Scores between 500 to 579 90%  Scores less than 500 Not eligible  Disaster Relief Program  Score of 500 or greater 100%  Below 500 Not eligible  Borrowers in negative equity position  Refer to Mortgagee Letter 2010 – 23
  17. 17. The FHA Borrower  Must occupy the property as primary residence  Must be a legal resident U.S. citizen Lawful permanent resident aliens Non-permanent resident aliens  Must have valid Social Security Number (T.I.N. unacceptable)
  18. 18. The FHA Borrower - Continued  Only one (1) FHA loan allowed Some exceptions See Mortgagee Letter 2008 – 25  May be HUD approved non-profit or government agency  Borrower(s) can hold title in Inter-Vivos (living) Trust  May be co-borrower or co-signer
  19. 19. The FHA Property  1 – 4 Unit dwellings  SFR, PUD, Condo (attached, detached, high and low rise)  Manufactured Homes  Existing or New Construction  Must meet HUD Minimum Property Requirements (M.P.R.’s)  Owner occupancy required
  20. 20. How Does FHA Compare To The Industry ? Competitive interest rates Financing up to 105% CLTV (or more) on purchases With approved secondary financing Maximum 100% “typically”
  21. 21. How Does FHA Compare To The Industry ? FHA’s 1-1, 3-1, 5-1 ARM adjustment and life caps better 1-1 and 3-1 ARM FHA - 1% per adjustment – 5% Life Industry - 2% or more (1-1, 3-1) – 6% Life 5-1 ARM FHA – 1% per adjustment –5% life Industry - 5% first adjustment – 5% Life 10 years to reach life cap on FHA 5-1 ARM
  22. 22. More Comparisons Contributions by third party 6% regardless of LTV/CLTV  VS. 3% over 95% LTV/CLTV Manual underwriting allowed  All loan types Automated underwriting not required Maximum financing allowed for Manufactured Homes
  23. 23. Where to Get More Information  1 – 800 – CALL – FHA (1 – 800 – 225 – 5342)  A source for all FHA questions  Industry partners and Consumers  www.hud.gov  On-line resource for info about FHA and FHA programs  On-line source for all other HUD programs, grants, forms, press releases, etc.  User friendly  www.fhaoutreach.gov/FHAFAQ  On-line resource to frequently asked questions
  24. 24. www.hud.gov
  25. 25. www.hud.gov
  26. 26. www.fhaoutreach.gov/FHAFAQ
  27. 27. Agenda For Webinar November 16, 2010  Previous changes  Housing & Econ. Recovery Act changes  1 – 4 Unit mortgage program  Condominium program  Streamline and Rehabilitation loan  Energy Efficient Mortgage (EEM)  Solar and Weatherization
  28. 28. The U.S. Department of Housing and Urban Development would like to thank the California Association of Mortgage Professionals and Oregon Association of Mortgage Professionals and its’ members for your interest in FHA and FHA programs
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