FHA loans

An FHA loan is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to borrowers, rather, it provides lenders protection through mortgage insurance (MIP) in case the borrower defaults on his or her loan obligations. Available to all buyers, FHA loan programs are designed to help creditworthy families who do not meet requirements for conventional loans.

FHA loan programs are particularly beneficial to those buyers with less available cash. The rates on FHA loans have low interest rates, while down payment requirements are lower than for conventional loans at just 3.5% and credit requirements are less stringent. FHA allows borrowers to get a loan only 2 years after a bankruptcy if the BK was due to extenuating curcumstances, otherwise the wait is 3 years. Conventional loans require 7 years.

Some of the other benefits of FHA financing:

• Only a 3-1/2 percent down payment is required.
• Lower monthly mortgage insurance premiums and, under certain conditions, automatic cancelation of the premium.
• More flexible underwriting criteria than conventional loans
• FHA limits the amount lenders can charge for some closing cost fees (e.g. the origination fee can be no more than 1% of mortgage).
• Loans are assumable to qualified buyers.
• Refinancing when interest rates get lower is streamlined with lower costs to the homeowner.
• Allows up to 6% seller assistance with closing costs.

FHA 203K Rehab loan

All the benefits of the regular FHA loan program with the additional benefit of financing home improvements and repairs into the loan. A bit more involved than the regular FHA loan but well worth the effort in today's market, especially if you are considering a foreclosure that may need some work. For more information about the 203K loan contact me and I'll send you a power point presentation.