FHA Loans in Tampa, Florida and throughout the US are going to become even more useful now as the President has finally signed the Economic Stimulus Bill which increases the FHA loan limits by county. (To determine your maximum loan limit, please use the following link to HUD.)
What does this mean to the consumer? For consumers, many people could not take advantage of FHA loans in the past for purchases or refinances because of the low loan limit....now FHA loans can be used for higher loan amounts...in Hillsborough County, this means we can use FHA loans for loan amounts up to $292,500 for a single family home.
What is the benefit of using an FHA loan?
- Lower down payment - Typical FHA standards say that the borrower must have a 3% down payment. However, with the help of down payment assistance programs, like AmeriDream, borrowers can have that down payment gifted and in turn have a zero down loan.
- Reduced Credit Standards - FHA is more lenient on borrowers with limited or bruised credit history, with no true minimum credit requirement.
- Higher LTV allowed on cash-out refinances - Standard conventional guidelines say that a borrower can "cash-out" up to 90% of the value of their home. However, in our declining market environment, that number is reduced by 5%. This is a problem for many homeowners trying to get our of their adjustable rate mortgages. With an FHA loan, a borrower can cash-out up to 95% of their property value.
What does this mean for REALTORS?
- FHA has made some significant changes in their underwriting criteria. In the past, FHA inspections were required to make minor repairs for cosmetic defects, or normal wear & tear. Now, FHA has revitalized to a underwriting process much similar to conventional loans, making it easier for consumers to use and REALTORS to promote FHA products.
- Ability for Seller to offer concessions to sell their homes - FHA allows the seller to "gift" the 3% down payment through AmeriDream. In addition, the seller can give up to 6% of the sales price to the buyer for closing costs, prepaid expenses and points.
- If you have a listing that isn't selling because the home needs some improvements such as new flooring, windows or updated appliances - the new FHA mini rehab program allows buyers to finance as much as $35,000 into the mortgage for minor repairs that would be completed after the sale.
FHA Mortgage Loans are going to become a more vital way for consumers to get the best out of their mortgage options for purchases or refinances. If you are a consumer who has recently been turned down for a conventional loan or were told that you have to bring more money then you have to closing, please feel free to contact me for a complimentary consultation to see if the new FHA program is right for you!
Leah Ross, XCO, AmeriFirst Home Mortgage
Please feel free to contact me via email at LRoss@AmeriFirst.com or Phone 813-643-8430 or 269-488-9527