Todays FHA Loans

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Todays FHA Loans

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

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