Thank heavens for FHA financing. Many of today's real estate professionals and consumers have never been exposed to FHA because of home prices in the San Diego market over the past several years. For many of us, FHA was an important part of the housing market in the past. All good things eventually resurface and FHA is one of the bright stars that are shining on this market. I think it is important to identify all of the reasons why this program is so important to the real estate community. Before doing so, it is worth noting that the mandatory seller fees associated with FHA financing in the past no longer exist. All fees are negotiable now - mandatory seller fees were as high as $1500 with some lenders and often discouraged sellers from entertaining offers involving FHA financing prior to this change in policy.
As loan programs go, finding one with a low down payment requirement of only 3% is hard to find. Couple that with the fact that the 3% can be "gift funds" from a relative, you would be hard-pressed to find a more affordable way of accessing homeownership. The following are a list of reasons as to why FHA is so important to us.
•- FHA is not driven by credit scoring. However, most lenders will impose a minimum credit score of 580 to 600. Some lenders do not require having a credit score - in cases such as these we look for three alternative sources of credit to verify a payment history (i.e. rent, gas & electric, cable, etc...).
•- Non-occupying borrowers are allowed to help the occupying borrowers qualify for the loan. In addition, the occupying borrower is not required to have a source of income when a non-occupying borrower is involved.
•- Interest rates are very competitive for all parties - even for those with low or no credit scores!
•- NO adjustments to loan amounts in declining markets are automatically imposed.
•- In the event of a refinance, consolidating a 1st and 2nd mortgage into one loan is acceptable.
•- As mentioned above, seller's concessions can be as high as 6%. On low-down payment loans this is unusual and exceptional.
•- The ENTIRE down payment can be in the form of GIFT FUNDS from a relative.
•- Qualifying ratios and underwriting guidelines often provide more flexibility then conventional financing.
At American Sterling Bank we are not only approved to do FHA loans but I also have extensive experience in this sector of the market. FHA experience is hard to come by in this market. Don't let lenders steer you away from FHA - it may be that they are not approved to do FHA loans or that they do not understand them. If you need assistance or would like more information about FHA financing, do not hesitate to call. It is truly a program that can make a difference for many!
I received this today from my good friend, Cindy Choice at Sterling Bank. For more information you can reach her at email@example.com