Today’s FHA Loan This is Not Your Father’s FHA!
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
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
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
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
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).
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.
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
Financing Condominiums As of October 1, 2010FHA 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