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Just the Facts ma'am, Just the Facts: FHA Loans

By
Real Estate Agent with RE/MAX Access

Just the Facts ma'am, Just the Facts: FHA Loans

I am by no means trying to indicate that I am an expert on home loans and I do not want to step in any of the really great mortgage folks toes but I attended a class on FHA loans yesterday and did learn some new and interesting things and was reminded of some things I had forgotten. 

Sooooo I thought I would write up some down and dirty facts that were brought up during my class. This post is meant to be informative and a nice starting place for homeowners!  I hope the information is helpful, for a more extensive explanation and official pre-qualification please contact a lender in your area or a local Realtor who should be able to direct you to a qualified lender!

photo courtesy of: http://www.flickr.com/photos/thetruthabout/2809626213/

  • Before you decide to consider an FHA loan, you must know that FHA loans have limits.  The limits do vary between different markets, here in the San Antonio area, the limit is $332,500.00.  So if you are looking to purchase a house above that price, you are out of luck (with an FHA loan - there are many other types of loans for buyers looking to surpass the FHA limit). 

 

  • FHA offers home buyers standard 15 year and 30 year fixed rate mortgages and with rates as low as they are right now, this is a very good thing!

 

  • FHA only requires a down payment of 3.5% of the purchase price of the home.

 

  • FHA will allow the sellers to contribute up to 6% of purchase price for buyers closing costs.

 

  • In order to qualify for an FHA loan, the home buyers must be purchasing a property they will occupy and it can be a single family, a condo or a manufactured home.

 

  • The minimum credit score allowed for FHA is 600, but FHA does allow for the use of a non-occupant co-borrower.  This is perfect for the young home buyer who may not have had time to establish credit and might have parents willing to help him or her out by co-signing.

 

  • All FHA loans are fully assumable - this can be a great selling point if you ever decide to sell your home during a time when interest rates may have risen.

Well, there ya have it.  This list again, is by no means a full description of what an FHA loan program has to offer but hopefully it is enough to get you, the home buyer started! 

I hope every one has a great weekend!

 

Comments (6)

Douglas Fischer
East Oahu Realty - Selling Honolulu, Hawaii Condos - Honolulu, HI

Well, just when I thought I knew most everything about FHA loans, I realize I don't!!  I had no idea, nor has anyone ever mentioned, that all FHA loans are fully assumable.  I'm shocked.

Dec 04, 2009 05:30 AM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORSĀ® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Jeanna, Thanks for the update. I thought the min credit score was 620.

Dec 04, 2009 08:11 AM
Jeanna Martinez
RE/MAX Access - Schertz, TX

Douglas - I was a little surprised by that too but according Dennis Geist, VP Government Loan Programs from Wells Fargo they are!  The buyers, of course, have to be fully qualified :-)

Wayne - You are welcome!  The presenter was from Wells Fargo and he said the score for them for an FHA loan was 600, I am not sure if other banks may require higher.... 

Dec 04, 2009 10:18 AM
Richard Weeks
Dallas, TX
REALTORĀ®, Broker

Jeanna,

You took very good notes.  Thanks for taking the time to share with all of us.

Dec 05, 2009 05:05 AM
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

Its always a good idea to educate yourself about the FHA standards and all other mortgage products. My only concern would be the FICO score. Although FHA may allow a FICO score down to 600, there are not many lenders that will allow it under 640. Im not saying it cant be done, but you may be limited with who you work with.  I know you added the disclaimer to talk with a Mortgage guy/gal, but I just wanted to provide some info. Have a great weekend!

Dec 05, 2009 12:31 PM
Jeanna Martinez
RE/MAX Access - Schertz, TX

Richard - Thank you!  I really learned a lot and am very glad I went!

John - I definitely agree with you (about the FICO score) The class was put on by Wells Fargo, so I just reported what I was told...I kind of thought that 600 was a little low! :)  Thank you for adding the info (exactly why I added the disclaimer)  I always welcome new/updated information from you mortgage folks.  I hope you have a great weekend too!!

 

Dec 05, 2009 12:47 PM