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362,790 Reasons FHA Is Roaring Back To Life In Salt Lake County

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Real Estate Agent

362,790 Reasons FHA Is Roaring Back To Life In Salt Lake County

For the last few years people used conventional loans, (actually non government loans is a better description, some of them were not conventional) to buy homes. FHA was almost non existent and most lenders and most  agents have not done an FHA loan. 62% of the Real Estate Licensee in Utah have been issued a License on or after Sept 1st, 2002, that means 2/3rds have 5 years or LESS experience. (note to self, Real Estate School might be a good business). The loan officer scenario is even worse simply because they have not been required to have licenses that long. Hmm think there is any connection between that and holding the record for loan fraud in the nation, nay thou cannot be brethren.

OK, I'm back, because of the loose underwriting guidelines that we have had in the last few years why do an FHA loan. I mean bank statements, pay stubs, telling them how much money a borrower makes and where they work, who has time for that stuff. There wasn't a lot of time to be dealing with things like completing a loan application.

 So with that said what is an FHA loan? Well for starters it is your Knight on a White Horse. Because it has been near extinct for the last few years, most agents and loan officers have never seen one. For that very same reason a lot of veterans say things like I don't do FHA loans as they walk away with  their nose in the air. They don't do them because FHA "USED TO BE" a pain in the you know what. There guidelines have loosened up, I don't mean no job or anything like that. Their physical guidelines were not realistic like a small crack in an insignificant basement window had to be addressed, I mean there was more knit picking then at a father son spider monkey convention.

However in the last couple of years while all the other loan types were gearing themselves up for Chapter Seven and other means of saying oops Scuse-me, thanks for the fish. FHA has really become the loan of choice in most cases. They have relaxed some of their really anal physical things like the carpet is too dirty, the hand rail doesn't have enough varnish.

 You have to love the Federal Government, Corporate Raiders were fleecing pensioners and they are measuring varnish millage on a handrail of an 85 year old house.

 

 

So now that there are few options left for financing that don't ask many questions, FHA again. The loan limit for FHA in Salt Lake County is $362,790 60% of the inventory is eligible for FHA based on amount. This one is even better yet, Tooele County because it is such a small county is tied to Salt Lake meaning that 85% of Tooele's inventory falls in FHA loan amounts.

Another good reason for FHA loans. The mortgage company must be FHA approved. Meaning they have to have some money and they are subject to audits and quality control, now theres an interesting idea.

Last but not least the other sad arguments you hear from lenders about FHA (the ones that cannot show they have any money or cannot go through an audit). But what about the mortgage insurance. Our Sub-Prime loan, you know the 7% first and the 11% second doesn't have any MI. If you can't figure out where the MI in that loan is, call me I have Florida Swamp Land for Sale.

MI is not deductible, Mortgage insurance premiums will be 100% deductible for households whose adjusted gross income is $100,000 or less. The Law is effective for the Tax Year on Purchases and Refinances closed on or after Jan 1, 2007

So here are some basic guidelines for FHA in no particular order

  • Must have a heat source in every room

  • No peeling paint on the exterior (wood exposed to the weather)

  • Must have functional plumbing, minor faucet drips are OK

  • Must have functional electricity, old is OK, not un-insulated

  • Can't have wood to earth in the foundation

 

In other words it can't be a tear down.

 

 

 

     

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