With Subprime Lender options now more limited some are rediscovering FHA loans. Here's why:
PROS:
- Better pricing than most subprime programs
- Virtually no FICO Requirement
- Only 3% down for 1-4 units (O/O - required)
- Down payment can be gifted from seller to approved not for profit payable to buyer @ close
- Sellers may directly contribute up to 6% closing costs & ppd interest - (not down payment)
- Rental income payments valued @ 85% - (10% more than most cov financing)
- Cash Out Refinance up to 95% LTV
- Rate & Term Refinance up to 97.75% LTV
- No Income Cap
- No Cash Reserves Required
- DTI borrowing ratios up to 31/43% - manual underwriting can exceed w/compensating factors
- No Prepayment Penalties
- Non-occupying co-borrower income allowed
- Permanent disability income allowed
CONS:
- Full Doc Program - Income must be verifiable
- Lending limits vary by county & lower than (some) other options - see below.
- Requires lump mortgage insurance Premium (MIP) payable @ close.
- Property tax escrows required on all loans - no waivers
- Must use FHA approved appraiser
View FHA Lending Limits by County
Call Mortgage Specialist Greg Zaccagni for more information
www.MortgageAdvisor.info
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