While the sky is falling and the banks capital is drying up and/or they're hoarding it for a rainy day, I'm here to tell you that there are some great financing options out there to take advantage of in this great buyers market.
One options is FHA financing. No longer are we seeing the strict guidelines of the FHA of yesteryear, but a newer program that's as almost as easy as subprime...o.k, just kidding,...but with insurance backed by the government and less predatory lending programs.
What is FHA?
FHA financing is financing provided by the Federal Housing Administration (FHA), which has existed as a government corporation since 1934. Established under the National Housing Act, the goal of the FHA is to stabilize the mortgage market by providing an adequate home financing system through mortgage insurances. The FHA does not loan money out to borrowers, rather it provides lenders protection through mortgage insurance which protects lenders from the home-owner defaulting on their loan obligations.
Benefits of FHA financing
***Lower down payment (3 percent)
***Down payments and closing costs can be covered through gifts
***These loans are available for all homebuyers
***FHA loans are available to individuals with less than great credit history
***Individuals purchasing a condo do not have to pay an upfront mortgage insurance premium
***There are no cash reserve requirements for a FHA loans on single family residences or duplexes
***FHA for rehab cost added to the loan...not limited to bank owned however!
***Great FHA financing for HUD properties and Bank Owned Properties
Contact me for more information on your financing options, property search, or assistance in getting prequalified.
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Hmmm...not bad Tara, great message, but just a suggestion, you might want to consider letting your financing contact handle this. If he or she is FHA-versed, they can write this for you a little better and help you with your excellent message here! I have been an FHA originator for almost ten years now, including the 203(k), which is not just for bank-owned properties and not limited to a "streamline" (the streamline only allows improvements totaling under $35k) but FHA section 203(k) also allows almost limitless repairs and insures home improvement loans all the way up to the county loan limits. Section 203(k) routinely insures loans with improvements totaling hundreds of thousands! Also, your 4th listed FHA feature there should really be modified, Tara! FHA does not insure loans to people with poor credit. Nope, no mam! In fact, an FHA underwriter tosses poor credit applications back to the originator and sometimes gets aggravated that one was even submitted! It's important to understand that (income and employment qualified) people who can justify past credit blemishes with documentable proof of situations such as medical conditions (borrower must include medical records), job or income loss (borrower must enclose statements or termination letters/unemployment benefit award letters), death of an income earner (enclose death certificate), etc. and whose credit reports also show that they have since recovered from the situation and have made payments on time can be appproved for FHA financing. People like this may still have scores in the 500s or lower 600s but again, no poor credit loans are ever insured by FHA and FHA is not a sub prime replacement. Sub prime is a slain beast.
I hope this helps you when people browse your listings or request you as a buyer's agent and when they start to address the topic of financing! It will definitely keep the poor credit, "unapprovable" property browsers from wasting your time, or their own!
~ Jamie