What Does FHA Offer in Today’s Market?
Let’s take a look at the New FHA
There are many misconceptions concerning FHA. We would like to discuss some of the common questions concerning FHA insured financing.
Why is FHA An Attractive Option fro Today’s Homebuyer.
- It is a lot simpler to finance with FHA than it was 20 years ago. Now a (direct-endorsed) lender has complete control, all the way from application to closing.
- Buyers will find good values with FHA.
- FHA requires low down payments and the underwriting costs are very competitive.
- FHA has an excellent loss-0mitigation program, with a solid track record of assisting their home buyers through tough times.
How Do buyers Qualify For an FHA Backed Loan?
- FHA does not use a credit scoring system.
- With higher debt/income ratios, buyers may qualify fro a higher mortgage amount with FHA than what is available to them with “other prime” products.
- FHA has increased the minimum down payment amount from 3% to 3.5%.
- Gifts are permitted from relatives.
- FHA guidelines have changed so much so that they will not ask for repair or cosmetic defects, minor defects or normal wear and tear. They are concentrating more on the valuation of the property.
- FHA permits borrowers to pay virtually all closing costs, except the tax service fee.
- Under FHA, sellers can contribute up to 6% of a property’s sales price toward the buyer’s actual closing costs, prepaid expenses, discount points and other financing concessions.
- The mortgage cannot include any cash back and all seller concessions must appear on the HUD statement.
How does FHA Help Buyers Who Want to Rehabilitate Properties?
FHA’s 203 (k) rehabilitation program has been around for many years and used to be very difficult and expensive to set up. FHA has streamlined the 203 (k) program, making it very easy to arrange this type of mortgage.
Process: If repairs to the home cost less than $15,000, FHA offers a very simplified process that requires no inspections.
- If more than $15,000 FHA will allow fro home repairs and improvements up to $35,000 to cover things like purchasing and installing new appliances, repairing or upgrading HVAC systems, or adding a patio or porch to a home.
- What does this mean to you? In today’s market, we need every possible tool available to us to help get buyers into a home. Now FHA offers an attractive and competitive product.
There are (2) key resources:
www.realtor.org/government_affairs/fha_toolkit
Contact Don or Kathy Vallee to start your home search today
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