Special offer

FHA Loans back in style for "FICO challenged" & high LTV financing

By
Mortgage and Lending with The Federal Savings Bank

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

 

Comments (7)

Jacob Morales - Arizona Mortgage Planner
US Bank - Scottsdale, AZ
This is important information for everyone to really know and understand. Thanks for posting this for everyone Greg. 
Jun 02, 2007 06:55 PM
Greg Zaccagni
The Federal Savings Bank - Wheaton, IL
Illinois Mortgage Lender

Dan & Jacob:

 Thanks for your kind comments about this article. Things may even be getting better.  I hear a rumor that FHA will move up to match conforming loan limits in 08.  Please let me know if you see anything in writing.

Greg Z

Jun 04, 2007 04:33 PM
Kris Krajecki
Kris Krajecki - FOX VALLEY MORTGAGE - Huntley, IL - Huntley, IL
Mortgage Broker Huntley, IL
Too bad we cant do stated!
Jun 04, 2007 04:39 PM
Leo Namiot - LeoLends.com
Canopy Mortgage - Leo Namiot - Saint Augustine, FL
More than just great rates
FHA is a great alternative to sub prime and even some prime deals since the rates are competative, no fico score required for those without any score, not credit score driven, 100% financing with DAP! FHa home loans are a great tool!
Jun 05, 2007 01:53 AM
Keith Smolik
Security Mortgage Coproration - Chandler, AZ

FHA may be a huge thing now and in the near future. Countrywide is even doing some local re-education on FHA for all the loan officers that either don't know much about it or are new enough that they have never really used the program before. Along with that, in the past couple of years, a lot of the FHA guidelines have changed making FHA a much more viable product than it was in the past.

Jun 05, 2007 05:46 AM
Eddy Martinez
Nationwide Funding Group - Highland Park, CA

Great information Greg. The Pros of FHA automatically outweigh the Cons. Its a shame that FHA was overlooked for so long.

Eddy

Jun 07, 2007 11:30 AM
Anonymous
Anonymous

Great information for consumers!  This is what we need to write about to increase positive thinking to all the negative real estate reports on the news.

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Jan 17, 2008 07:45 AM
#8