Stricter underwriting standards, higher down payment requirements, and more rigid credit score requirements are leading many home buyers to apply for Federal Housing Agency (FHA) mortgage loans.  Loans issued through an FHA-approved lender often require only a 3.5% down payment and borrowers can have credit scores in the 600 range, as opposed to 680 or higher, which is the standard for most financial institutions.  It's important to note that although FHA loans appear to be the best option for many home buyers, borrowers with FHA loans often pay a higher premium for mortgage insurance compared to a conventional loan.

Highlights

• In January 2009, new FHA loan ceiling in top markets will be $625,500
• Industry: FHA-backed loans are a great deal for many buyers
• Down payment minimal -- 3.5% and credit can be less than stellar
• Non-traditional credit allowed
• Program to allow buyers to borrow extra money to make repairs
• Down payment may be a gift (from relative only)
• 6% max seller concessions allowed
• Streamline refinance in future
• Assumable loan

Regards,

Gerard Ladalardo, CMPS
www.caloanpros.com