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Any FHA glory or horror stories?

By My Essistant

Services for Real Estate Pros with MyEssistant

October 15, 2007 08:01 AM

Hey everyone.

I am beginning some very in-depth research into the world of FHA financing and it all looks so good to me. Which makes me wonder --> what is the TRUTH? I would like to hear it from the horse's mouth so-to-speak what really is the general perception of FHA loans? Are they really as easy to get into and as easy for the buyer to qualify as they appear? Do lenders put stricter restrictions on loans than FHA requires? I know there is some legislation coming down that is going to (or already has) restrict where the down-payment funds may now come from (no more grants from non-profits as far as I understand) ... but is there anything else that you have come across that was a "surprise" when you tried to close?

Thanks everyone.

Deirdre

FHA mortgages vs Conventional mortgages - A True 3% down Comparison

Overall, FHA was always good and now, in my opinion, it's the best out there. But for many loan officers, they still sway clients into a conventional loan, because it's easier to process. With FHA, you need more elbow grease to make it work... but everyone is right, the rates are much better, especially when the score is below a 680. If you get a chance, join this group... The FHA Mortgage Group : http://activerain.com/groups/fhanow

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Sam Miller

RE/MAX Stars Realty - Howard, OH

Knox County Ohio Real Estate Specialist

Deirdre, I really like FHA loans and I have been selling homes using their program for more than 20 years. They have a very low cost entry, the loans are not as credit score driven and their interest rates are better than the split loans where you got hit on the second mortgage. The rules on the inspections have changed and I think you will find they are a good loan option for many of your clients. Certainly if your buyer has 20% down this is not the way to go but if they are short on a cash downpayment and have a family member who can gift them the 3%...FHA is the ticket.

Oct 15, 2007 08:09 AM

Joe Long

Waterstone Mortgage - Madison, WI

Purchase Perfect

Dierdre,

I think it is very important to familiarize yourself with the FHA appraisal guidelines and eligible property types. The preface to the appraisal guidelines offers a very general description of property conditions that can be "deal breakers." Hud has basically let themselves off the hook for turning down properties with conditions that limit economic life or affect livability with this umbrella terminology. In my experience the appraisal standards are not nearly as tight as they are stigmatized to be.

These loans are a fantastic way to qualify borrowers that have had questionable credit histories with viable explanations (i.e loss of employability due to injury, factory closings, death of a pwe, etc...) and will even go as far as financing just 2 years out of bk.

Other than that they are rather straightforward. They do require an FHA approved appraiser but you can still choose your own appraiser. A few more docs but altogether very worth the experience of helping out a good borrower with a bad history.

The more you know the better! Good luck!

Oct 15, 2007 08:14 AM

My Essistant

MyEssistant - Santa Monica, CA

Sam & Joe - Thanks so much for your feedback!

Oct 15, 2007 05:33 PM

Annette Frese

Lincoln Capital Resources - Walnut, CA

Deirde, Feedback on Processing FHA Loans, they are a slam dunk. I have been processing FHA loans since 1993 and as long as you are up to date with the guidelines its a breeze, This is a great loan for borrowers with min credit and litte funds to close. Most of the loans need to be manually underwritten, due to credit issue etc, but an experienced FHA Underwriter can call the shots due to its flexability in the guidelines to approve or not approve a loan. I recommend the FHA Training provided by HUD, check out their events/calandar online at HUD.gov.

Oct 16, 2007 03:02 AM

Anonymous

Sande O'Leary, ProcessorPro

I've been processing FHA loans since the late 60's. FHA realizes that sometimes people get kicked in the teeth and have set backs. They also know that if a borrower can show that they have recovered from their difficulties for the past 12-24 months, they should definitely be given another chance. Why have them paying rent when they could become homeowners and invest in the land of the good ole USA and become taxpayers and take pride in their homes. Everyone wins in this scenario. We have someone paying taxes on their land, a great citizen who takes pride in their yard, home and community. After all, people's set-backs can be viewed as Set-Ups for Spring-Backs. People should be forgiven and allowed to go "forward" to be a successful owner of their home! This is what I love about FHA. It is NOT like sub-prime! You get the chance to "prove" you are now on the right track and have gotten over the past. That's the beauty of our Democracy and freedom in the United States of America.

Feb 14, 2008 03:53 AM

Jeff Belonger

Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ

The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Deirde... there are a few people on AR that will argue with you that overall, conventional loans are better than FHA... in my honest opinion, don't listen to them. I know one of them and he is not FHA approved. That is the main reason why these types of people argue the point and some just like to argue and debate, but can't back it up. I like to use real facts, not opinions, when I debate or back something up. Take a look at this one....

Feb 15, 2008 03:02 PM

Beth Bastian

Rosemont Financial Inc - Simi Valley, CA

Simi Valley Real Estate

I love the FHA as long as you understand they are not the new subprime they are great loans.

Mar 31, 2008 06:48 AM

Bill

May 16, 2016 10:00 AM

Any FHA glory or horror stories?

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FHA mortgages vs Conventional mortgages - A True 3% down Comparison

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