FHA mortgages are the best thing out there. Now representing over 40% of the market in this economy, this once dinasour of a program that was thought to be near extinction is now the buzz for most home buyers. What does FHA give you as a homebuyer?
1) The loan is assumable. If you want to, when you sell your home, you can get your mortgage to be assumed by future homebuyers. If rates climb to 9% and the rate your in is 6.5%, you can have your mortgage be assumed by a future homebuyer;
2) Gifts are still allowed for downpayments. No other program is as agressive in getting buyers into loans. Conventional loans require a minimum of 3% of the buyer's own funds to be invested into the purchase. No so with FHA. FHA allows gifts for the entire downpayment.
3) Downpayment Assistance, albeit for the time being short lived, can still be used to puchase a home. In other words, a non for profit downpayment assistance company can get you in the home by providing for your entire downpayment;
4) Non-occupant co-borrowers - are allowed. The primary borrower doesn't even need to qualify by their own merits. I see this a lot for parents who want to buy a home and have their college child live in it during their schooling;
5) Non-traditional credit. FHA has a manual called the 4155. The 4155 specifically says "the lack of credit is not sufficient reason to deny a borrower." That means that even if you don't have credit you still have the opportunity to buy a home. You'll never find this with a conventional loan;
6) Credit in general - FHA allows for manual underwriting and automated underwriting. That means that if your credit is less than stellar, that, in and of itself will not bar you from obtaining a loan.
7) Appraisals - Appraisals have been streamlined to look more like Fannie Mae and Freddie Mac. What does that mean to you? You won't have all of the headaches that you initially would have in order to get an appraisal approved. A lot less conditions for appraisals;
8) Increased loan limits - FHA has raised the county loan limits nationally. Those of you who thought your loan was too big to refinance....that's not the case anymore. With expanded loan limits, this just might be perfect. Plus FHA is more agressive in what they'll permit for cash-out refinances. This is huge!
There are a myriad of other FHA pluses to help you consider buying a home, but if you're looking to buy. The FHA Modernization Act has brought FHA back to the forefront. Call me today to find out more about your homebuying options.
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