I love FHA flexibility. 

I've used the non-occupant co-borrower several times for first time home buyers.  I will admit that the parents are often reluctant to give financial info so I can qualify them in the beginning.  I get comments like "Why do you need my information?  It's my daughter that's buying the house?".

I tell all, "No they are not unless the two of you qualify together with both existing income and debt.

They come around.  Some don't and I suspect it's because either their credit isn't so good or they wouldn't qualify. 

Jeff Belonger: Very true!  FHA's are going to be a new waive of loans across the country.

Lenn....  glad to see that your clients had success with FHA loans in the past. They sometimes got a bad name from realtors because of the appraisals and because several lenders talked negative about them. Why?  Because they either didn't know the FHA guidelines or because they weren't FHA approved. And another reason, because there is a little less paper work to go with subprime. What's funny, maybe just 3 to 4 pieces of extra paper with a FHA loan. Sad.

Nima....  the sad thing about this is that FHA loans should have never decreased. I would have bet that between 2000 - 2006, that at least 25% of the loans originated subprime should have been FHA. And maybe at least 5% of the loans originated as FNMA levels should have been FHA loans. That's a lot of clients that got rates that were higher than they should have received.  

Jeff - This is a great point that differentiates FHA from conventional. It's a feature of the product I love and have utilized for my clients repeatability. You are so right though, it's not met to off set bad credit. Good post!

Jeff,

Thanks for the post.  I sometimes need reminding of what different programs allow. 

Thanks for the reminder. I have not had FHA loans recently.

Hey Jeff,

With loan standards increasing, it's nice to have an option in FHA, I do have a question, FHA guidelines say if your subordinating a second there is no Max Cltv, my underwriter is lost on this guideline thinking there is a Cap, what do you think???

Thanks,

Tom Weiss

Great information, that added benefit will make FHA a good option for many.

I have not seen many FHA loans in the last couple of years but am expecting a lot more of them.  I have my first client in a long time possibly doing one. 

Tony.... I see so many loan officers make their clients think that co-signers can offset their credit with someone else's good credit. That part is sad...but this is usually not taught in the beginning, but learned by experience. Or just a good manager pointing this out. 

John....  with so much out there and even though I know I know most products, refreshers and reminders are always key. I always like reading about them.  Thanks for your input.

Gita.....  you should be seeing more around now or soon. The problem with this is that they should have never left. But so many lenders pushed the subprime because it was a tad easier at times with a little less in paper work.

Tom.... this is a tough one. It actually depends on what kind of second. There is no max LTV unless.... I think there are a few exceptions out there and it comes down to the real scenario. I can't 100% help you here because I hardly come across this. If you want to call me tomorrow, I would be glad to help. One of my underwriter's actually worked for HUD at one point.  thanks

Randy....  thanks. I think FHA is a great option for many reasons. It still won't be used as much because many lenders aren't even FHA approved. But they don't let the clients know this. They just steer them in the wrong direction that ends up hurting them.

good post - quick and simple!

Awesome post Jeff!  Many people don't realize this benefit of FHA!  Great job!

David.... thanks. But in all honesty, it would be very hard to add anything else to this. It's straight to the point and nothing more.

Leah....   I agree, that many don't know about the benefit of FHA, and that is including lenders. It's ashame.  thanks for the compliments.

Jeff -- I gave you a 5 for this post.  Any one working in or around a college should know about the "kiddy condo".  A great deal for student and parent.  Aloha

Jeff,

I realize that this blog is old but Isnt it true that you can have a co-signor even on a refinance transaction? Which means this can help a lot of people who exceed 43% Back end Ratio.

Thanks for the great posts.

Dee

BRUCE....   Rest in Peace......

DEE..... beat you to the punchline. I wrote this on April 10th..... FHA -- Non-Occupant Co-Borrowers -- Now on refinances also....

What can I say, you are the Expert :) Keep the FHA topics coming.

Just want to add my compliments and thanks for this informative post. Also good comments from the community.