I heard yesterday at a FHA seminar I attended (yes, after 38 years I'm still trying to figure out this business) that FHA loans are expected to finance 80% of new purchases. Wow, good news for me, just like the old days.
Below are few Government lending tips:
- For those of you who remember FHA from the old days, FHA is now much kinder and gentler.
- Agents presenting REO purchase offers should assure the bank that FHA no longer requires extensive repairs and termite reports are not mandatory although health and safety hazards must be addressed.
- FHA loans take no longer to close than a conventional loan with the same buyer.
- FHA 203k Rehab loans take care of repairs over $5,000 and average 45 to 60 days to close because of dealing with construction bids. The repairs begin after close. Up to six months of housing expense can be included in the loan when the home is not initially habitable.
- 100% VA loans have not been popular in high cost areas the past few years so many agents may not be aware that VA does not allow VA buyers to pay lender and escrow (settlement) fees. This can raise the seller's costs $2,000 to $2,500 depending on the purchase price. VA does allow the buyer to pay lender points, appraisal, credit report fees and the lender's title policy.
- Energy Efficient Mortgage (EEM) Energy efficient improvements can be financed in FHA and VA loans.
Complete lists of FHA and VA allowable and non-allowable fees, tutorials on EEM and FHA 203(k) can be found at: http://www.YourFhaGuru.com
Best regards, Bill Ladewig
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