FHA Loan Program

FHA mortgage

The FHA’s mission driven organization encourages home ownership and provides affordable housing opportunities with low down payment and flexible credit requirements.

Since 1934, the FHA has insured over 37 million home mortgages with a market share of 30% in 2010 vs 3% in 2007.  In 2009, FHA programs insured nearly 2 million loans, which included 750,000 first-time home buyers.

fha loan program

While most people believe that the FHA lends money directly to borrowers, it’s actually just insures a certain type of loan that is financed by traditional banks and mortgage lenders.

Four of the most visible single family housing programs that FHA offers are, Section 203(b), Section 234(c), Section 203(k) and Home Equity Conversion Mortgages (HECM) – Reverse Mortgages.

FHA Loan Type Highlights:

Section 203(b)

  • largest of FHA’s single family programs
  • 1-4 unit properties are eligible
  • flexible credit requirements
  • 3.5% down payment allowed
  • down payment may be a gift from specific sources
  • Seller contributions up to 6%

Section 234(c)

  • provides mortgage insurance for individual condominium units
  • credit, down payment and limits of 203(b) apply
  • in 2010, condominium complexes must be approved through HRAP/DELRAP to be eligible for FHA insurance

Section 203 (k)

  • primary program for property rehabilitation
  • encourages community and neighborhood revitalization
  • only 1 mortgage loan is used for both the acquisition and the renovation
  • 1-4 unit properties including condominiums are eligible; check with your lender for manufactured housing eligibility
  • required improvements include cost effective energy conservation standards and smoke detectors
  • consultancy may be required

HECM – Reverse Mortgages (at this time I currently do not offer this program)

  • FHA was the first to promote reverse mortgages nationally
  • allows access to equity in property with flexible terms
  • lump sum, monthly payments, line of credit or a combination available
  • limited to homeowners 62 years of age and older

FHA programs go beyond the scope of the previous listed programs. They offer a Streamline Refinance as well as a Streamline 203(k) for limited repairs. Also, recent legislation has helped FHA offer special programs with incentives to lenders for modifying and refinancing existing mortgages like with the “Making Home Affordable Program.”

When looking for a loan program to fit your specific needs, take a close look at FHA as their programs have become more attractive to both lenders and consumers.

With favorable loan terms, higher loan limits, 30 year fixed repayment terms and flexible down payment options, FHA will continue to encourage home ownership, provide liquidity and stability to the mortgage market.

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Frequently Asked FHA Questions:

Q. What are the credit requirements for most FHA lenders?

As of 2010, the majority of lenders are leaning toward a mid credit score of 620. However, a handful remain down to 580.

Q. How much can I afford?

By providing your mortgage professional the required documentation, a detailed analysis will be provided that includes your maximum loan amount

Q. How will I know if the condo/townhome I wan to buy is eligible for FHA financing?

The following link will allow you to enter your zip code for a list of eligible properties:  “Click Here”

Q. What is FHA Mortgage Insurance Premium (MIP)?

FHA requires upfront and monthly mortgage insurance premium (MIP) with all FHA loans. The following link provided everything you need to know about MIP.  “Click Here”


Be Smart … Ask Questions … Get Answers!

For more information, call (954) 599-3432 or “Click Here” to send me a message by e-mail

“Click Here” Get Started with your Loan Request

 

To learn about the advantages of being pre-quaified “Click Here”

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