Yesterday I had an interesting call from a prospective client, one that use to work part time as a loan officer.  And during our conversation FHA loans came up and the FIRST THING he siad to me is that he will never do an FHA loan because they are so hard on a SELLER, he had no idea how easy they are NOW, but that will be another story. 

I have had 2 clients in the last 2 days that we will be doing a FHA loan for and these 2 clients did not qualify for conventional programs.  One with a 635 score and nothing bad in the last 12 months.  Conventional automated runs came back at EA 3!!!  which means PMI in the  $400 a month range!!!!  This would probably force these borrowers into future issues.  So I run the deal FHA and get Approved/Eligible!!!!  rate drop a whole point and PMI is only $68 a month and yes I could have gone "Sub Prime" with them at 9.5% interest, but why????  They get a fixed rate and no pre payment. 

The second borrower had even better scores but 2 30 day lates on a credit card in the last 6 months.  Again the big banks here wouldn't even talk to them because of that.  Again I run it and get the dreaded EA3, but wait a second Joe, didn't you just do this yesterday. Yes inner voice I did, so again flip it and BINGO Approved. 

FHA use to be a real PITA, they have really stepped up and stream lined the program and become user friendly.  Last year or so I would have never imagined ME singing the praises of FHA, but the program is taking the place of 90% of my "Sub Prime" loans.  Better for the borrowers and better for all