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FHA Changes You May Want to Know About for Buyers

I'm going to bullet out the hight points that I believe you will be most interested in right now. 2006 saw a lot of changes to FHA guidelines, so if you haven't done one in a while...here's a refresher:

3% downpayment. Can come from savings, gift from a parent, employer or union, grant from non-profit
"Seller Gift Charities" are still OK for now. This is where the seller "gifts" 4% to a charity which in turn "grants" 3% to your buyer
No more seller-paid non-allowable junk fees. All closing costs are negotiable between buyer and seller except the $75 tax service must be paid by seller
Property is no longer scrutinized under a microscope. Major health and safety issues will need to be repaired, but most cosmetic and minor issues will be ok to close
No more mandatory well, septic, and flat roof inspections
They've made the 203k Rehab loan easier to work with, so your buyer can roll repairs into their purchase loan.
No minimum credit score required. No score is OK too (must build alternate credit)
2 years out of bankruptcy, 3 years out of foreclosure (exceptions in rare circumstances)
Loan limits have been increased through 12/31/2008, examples:
- Central FL = $353,750
- Sarasota = 442,500
- St Lucie = 375,000
- Tampa area = 292,500
- Jacksonville = 387,500
- Melbourne = 291,250
- Check your county on Hud.gov
Condos MAY be spot approved as long as it is under 50% rental occupied.

It is estimated that 35% of all loans closed this year will be FHA, so it is absolutely CRITICAL that you know how to handle them as a real estate professional.

I also wrote a complete review and update on FHA funding in an upcoming article on AgentDirectNews.com...watch for it!

Posted by Andy Tolbert on 05/13/2008 09:59 PM

Comments (9)

fha, financing, mortgage, buyers, attracting buyers, low down payment

9 Comments on FHA Changes You May Want to Know About for Buyers

Andy - can investors use an FHA loan for investment property or are they only for primary residence borrowers?

05/13/2008 10:05 PM

by Lisa Friedman Central New Jersey Real Estate (Pinnacle Realtors)

If 35% become FHA, it will help the market a lot. I hope you are right! Is that a prediction for just Florida? Or is that a national statistic?

05/13/2008 10:08 PM

by ARDELL DellaLoggia (Sound Realty)

Thank you for the update

05/13/2008 10:15 PM

by Jon Zolsky (FunCoast Realty LLC)

These changes came just in time! The increase of FHA loans at our office has been significant.

05/13/2008 10:16 PM

by Christine Howlett - Lake County Ohio Real Estate (Howard Hanna Smythe Cramer)

Andy,

THanks for the inportant information, we must keep up on these issues.

Take care!

RJH

05/13/2008 10:19 PM

by Empire Realty

The answer to the two questions... FHA loans are for owner occupants only, no investor products since the 90's.

And those stats are nationwide (the 35%) that I got from several regional HUD directors last week at the conference.

Hope that helps! My husband really does more of the mortgage side...I'm going to get him involved on AR too!

05/13/2008 10:22 PM

by Andy Tolbert (Compass Real Estate Seminars)

Andy - You just shared precise and clear information here. All the offers I am dealing with are FHA anymore, makes more sense! Can you tell me about 'manufactured homes' is it still required to do the septic inspection per the purchase contract (AZ has it in our PC)? I am wondering if that is an option for the buyer to not do one, even though it's typically at the seller's cost? The above reads that its not part of the guidelines. Did I read that correctly? Count me in as a new subscriber!

05/13/2008 10:35 PM

by Gilbert Arizona Real Estate - Candace Robinson (HomeSmart )

Andy.... some good information and I am not trying to sound rude here.... but you need to be more clear on a few things. Bankruptcy's ??? You can be in a CH. 13 for 1 year and purchase a home or refinance. In regards to no minimum credit scores? yes, FHA states this, but it's up to the investors. I have talked to loan officers nationally and I seem to be the only company that will go down to 500.... beecause of our investor. I know one lender that will go to 530 and everyone else can't go below 580. This is very important in my mind.

jeff belonger

05/18/2008 12:20 AM

by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages -- Mortgages (Infinity Home Mortgage Company, Inc)

I have had the same experience Jeff - (would love to hear who allows the 500!)

05/21/2008 08:34 AM

by Matthew Rosov, Certified Mortgage Planning Specialist (Envision Lending Group)

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