Las Vegas FHA Home Loan

Recently in Las Vegas, FHA Loans have become the primary mortgage loan for the purchase of a home.  There are three primary reasons for this:

1. FHA is not a credit score driven program
2. FHA's allows some flexibility with their guidelines 
3. Exceptions can be made and approved by the FHA underwriter directly

Fannie Mae and Freddie Mac's conventional comforming loans have become extremely hard to qualify for and increasingly costly, especially here is Las Vegas.  Without 20% down payment, conventional loans require a 720 credit score and low debt ratios.

FHA has stepped in to supplement the Las Vegas market with an affordable, flexible, consumer friendly option.  If you are in the market to purchase a Las Vegas home, you should look at an FHA Loan as an option.

There are many good reasons to choose an FHA loan for your Las Vegas purchase, especially if one or more of the following apply to you:

• You're a first-time homebuyer (You don't have to be)
• You don't have a lot of money to put down on a house
• You want to keep your monthly payments as low as possible
• You're worried about your monthly payments going up
• You're worried about qualifying for a loan
• You don't have perfect credit
• You're worried about what will happen if you fall behind on your payments  

You may use an FHA-insured mortgage to purchase or refinance a new or existing 1-4 family home, a condominium unit or a manufactured or mobile home (provided it is on a permanent foundation). 

FHA Home Loan Features:

• Lower Interest Rates: FHA loans have competitive interest rates because the Federal government insures the loans
• Smaller Down Payment: FHA Loans require a 3.5% Down Payment (This can come from a family member, employer, or a charitable organization as a gift)
• Easier qualification: Because the mortgage loan is insured by FHA it is easier to qualify if you have blemishes on your credit or there are exceptions on your loan application
• Less than perfect credit: You may even qualify with a bankruptcy in the past
• If you can not qualify on your own, you may use a family member, or close family friend, to qualify as a co-signer

FHA Home Loan Requirements:

• Owner Occupied Properties Only
• Single Family Residences, 2-4 Unit Properties, Planned Unit Developments, Manufactured Homes and Condo's are eligible properties for an FHA Mortgage Loan
• Qualifying Debt-to-Income Ratios of 43% (Back End) or higher with Automated Underwriting approval
• Sellers & interested third parties may contribute up to 6% for closing costs. 
• 2 Months Reserves (Not every borrower needs 2 months reserves, however it helps to qualify.  These reserves may come in the form as a gift)

FHA Upfront Mortgage Insurance Premium:

With all FHA insured loans there is an up front mortgage insurance premium (UFMIP) equal to 1.25% to 2.00% of the loan amount that is paid at closing.  This mortgage insurance premium can be financed in your loan amount, so you are really paying it over the life of the loan.  A majority of consumers take this route.

Example: Mortgage amount: $100,000 X 1.5% = $1,500 can be paid at closing. Or if you finance it into the loan @ 6.5% for 30 years = $ 9.48 per month.

FHA Monthly Mortgage Insurance:

On loans with a term, or life of the loan, greater than 15 years and a loan-to-value ratio of 90% or greater (meaning you are borrowing more than 90% of the value of the home), you will pay an annual mortgage insurance premium of 0.5% to .55% of the loan amount in monthly installments.

Example:  Mortgage amount: $100,000 X 0.5% = $ 500/12 months = $41.67 per month

What kinds of loans does FHA offer?

• Fixed Rate Loans: A majority of FHA loans are fixed rate loans.  In a fixed rate mortgage your interest rate will stay the same throughout the life of the loan.  The advantage of this type of mortgage is that your payment will never change.  Currently FHA offers 30 Year Fixed and 15 Year Fixed Terms.  The 30 year Fixed Rate FHA Mortgage is very popular in the Las Vegas and Las Vegas, NV area right now.
• Adjustable Rate Loans: FHA offers an adjustable rate mortgage commonly known as an ARM Mortgage.  FHA uses the 1-Year Constant Maturity Treasury Index (1 Yr CMT the most widely used index, to calculate the changes in interest rates. An index is a measure of interest rate changes that determine how much the interest rate on an ARM will change over time.)  Currently with the way the Las Vegas, and Las Vegas Real Estate markets are performing I do not recommend this type of loan product. 
• Purchase/Rehabilitation Loans: There may be a Single Family Home that you see that would be terrific for you BUT it needs some repairs.  FHA has a loan for rehabilitating and repairing this type of property called the SF Rehabilitation Loan program (203k).  The mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work.  With all of the foreclosures in the Las Vegas Valley this may soon become a popular FHA home loan.

If you have more questions about a FHA Home Loan in Las Vegas, feel free to contact me directly at 702-808-8328 or visit my Las Vegas FHA Home Loan webpage.  Serving Las Vegas, North Las Vegas, and Henderson, Nevada.