Todays FHA Loans

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  • 1. Today’s FHA Loan This is Not Your Father’s FHA!
  • 2. FHA Lending is Exploding
    • Now represents >30% of loans being written
    • Geared for:
      • First time buyers
      • Borrowers with little to no money
      • Buyers with less than perfect credit
      • Non-occupant co-borrowers
  • 3. Hot Features of FHA
    • 3.500% down payment
    • 6% seller concessions
    • All funds can be gifted
    • No reserve requirements
    • No income limits
    • Very competitive interest rates
  • 4. FHA Highlights
    • Limited to owner-occupied property
    • Available for 1-4 unit properties
    • High LTV available for OO 4 unit
    • Minimum credit score of 620
    • Flexible down payment sources allowed
  • 5. FHA Highlights (cont.)
    • Manual underwriting common/allowed
    • Good documentation is the key
    • Collections are allowed to be left outstanding as long as they do not affect the properties title
  • 6. FHA Property
    • Safety – Is the property safe?
    • Sound – Is the property sound?
    • Secure – Does the value support the loan?
    • FHA appraisals resemble conventional
    • Lender may require termite inspection and treatment if property has evidence of WDO’s (Wood Destroying Organisms).
  • 7. Property Flippers Allowed!
    • FHA has waived their property flipping rules until December 31, 2011
    • Purchase Agreement for the sale cannot be dated before day 31
    • Some lenders may require 2 appraisals.
  • 8. FHA Loan Limits
    • Limits vary by county
    • Our county limit is: $423,750
    • Loan limit is before UFMIP is included
    • Higher loan limits for 2-4 unit properties
    • Increased loan limits good thru 12-31-11
  • 9. Financing Condominiums
    • As of October 1, 2010 FHA Spot Condo Approvals are longer be allowed.
    • Entire project will need to be approved by FHA or already on FHA’s approved list.
      • https://entp.hud.gov/idapp/html/condlook.cfm