If there is one thing you probably know about the current mortgage environment, it is the fact that there seems to be an ever growing compilation of challenges to getting people into homes. Whether it is appraisal issues, buyer credit problems, no funds to close, etc, a challenge usually pops up on every deal. I like to think it is an excellent opportunity to prove your wizardry in today's complex mortgage arena. The mortgage arena in Pennsylvania has some unique programs that all buyers and Realtors should be aware of.
The Pennsylvania Housing Finance Agency (PHFA ) was created to help enhance the quality and supply of affordable homes and apartments for older adults, persons of modest means, and persons with disabilities. PHFA operates home ownership programs, rental housing development initiatives, and a foreclosure prevention effort.
PHFA currently has some very attractive homebuyer programs. One of the most eye catching is the tax credit advanced loan for first time homebuyers. Those who are eligible for the First Time Homeuyer Tax Credit may borrow up to $5000 to use toward a down payment and closing costs ($6000 if it is a new construction property). This can be combined with a USDA, VA, FHA or Conventional mortgage.
Another interesting caveat to the PHFA loans is the underwriting flexibility. Almost all lenders now require a minimum credit score of 620 for FHA mortgages. To reiterate, this is not a FHA requirement but a lender requirement. It is very likely that people under the 620 can be approvedas long as it clears the Fannie Mae Desktop Underwriter program. I recently had a client with a 582 credit score approved for a PHFA-FHA loan. You will want to check with a mortgage professional to get the ball rolling with this program.
Just when you thought it could not get any better, PHFA also has a special program right now for new construction or previously occupied homes. A no point 4.5% interest rate loan for any new construction or previously unoccupied property! Again, you can combine this with a USDA, VA, FHA or Conventional Mortgage. If you are a Realtor with new construction listings this can be a very effective marketing tool. I would be happy to provide signs for anyone that needs them.
PHFA provides flexibile options for those clients with credit issues or funds to close. Some of the programs have income and purchase price limits by county. Again, you will want to check with a PHFA approved lender to get started with the process.