Fha 101

Greg · #1 (**permalink**) 12-07-2005, 10:54 AM

Many brokers are up against Bankers and Some Brokers who offer FHA. This is a brief overview I will continue to expand on. FHA loans are not credit score driven. You can have any score or no score. They accept most all forms of gifts and if no credit exists or no positive credit shows on a borrowers report they accept Alternate Letters Of Credit. (Credit Reference Letters) For example: Utility Bills, Insurance, and Cell Phones

As of today the parameters are 97% LTV on Purchase or Rate and Term Refinances.

95% on Cash Out refinances. - edited late but effective 10/05

They have a streamline refinance where an appraisal may not be required for existing FHA customers.

Product terms are 1 yr arm, 3/1 Arm, 5/1 Arm, 15yr Fixed, and 30 Yr Fixed.
Most offer a 1 yr buy down and a 2/1 buy down. So say your rate is 6.00 and you do a 2/1 buy down then the first year is 4% and second is 5% the next 28 or 13 years is 6% fixed.

FHA allows a seller contribution of 6% towards closing costs.

2 years out of bk and 3 years out of foreclosure. Some cases exceptions are considered.

Typically bills opened >24 months ago and less than $250.00 can be ignored. We ignore any medical in nearly all cases as well.

The 3% down payment can be a non-profit down payment assistance program that could be used as strictly a paper transaction because they wire money to title at closing and retract it after funding.

Now here is an example:

Last Month I had a customer with well over 45 collections and a 465 mid score. I got them 6.25% fixed with 0 down and they walked into closing with only their ids required.

Now for the negatives....

FHA used to be critical about the condition of the home. They have rehab loans (203k) but not many loan officers can do them. 200 amp electric, no peeling paint, handrails on stairways, steps leading off porches just to name a few. - edited read on they are not anymore. use my post to give to a realtor who does not know if needed.

But... In 2006 we expect 100% financing and a standard 1004 effective

Greg · #2 (**permalink**) 12-07-2005, 10:55 AM

Oh and for those who like to make money at 6.75% it would have paid 3.75% in the back!

Best4U · #3 (**permalink**) 12-09-2005, 07:10 AM

6.25 rate with a 465 score?
6.75% paying 3.75% on the back?

You're just bragging now. I wish I had FHA.

Remind me what states you have. Occasionally, I may have clients that I can't serve or who would be better served by FHA financing. I might refer them to you. (I pride myself in being able to help just about anyone though. If scores are really low, I do it with credit repair. But those with immediate needs to purchase would appreciate FHA leniency.)

Just let me know.

Greg · #4 (**permalink**) 12-09-2005, 12:18 PM

Wow that is great. I like you dedication and care to your borrower. I used to do all 50 but when New Century Purchased our company we had to re-setup licensing. Every day they are increasing what I can do. As of today here are my states.

Let me know yours too. Might have something for you and also send me an email with all your contact information. I currently send deals I cannot do to Kelly Hall. If she can't do them you will be next on the list.

All 50 now...

And adding MD any day now for Kelly. Almost done.

jleach1972 · #5 (**permalink**) 12-21-2005, 10:05 AM

Quote:

Originally Posted by Greg

FHA is very critical about the condition of the home. They have rehab loans (203k) but not many loan officers can do them. 200 amp electric, no peeling paint, handrails on stairways, steps leading off porches just to name a few.

Greg: I purchased a property 3 years ago as a 403K and didn't meet any of those requirements. Have they changed since I did that purchase or did I sneak through?

Jason Leach

Greg · #6 (**permalink**) 12-21-2005, 10:18 AM

I have never looked into 403k.

That exceeds the loan limit too.

I better find out more. Let me do some research.

jleach1972 · #7 (**permalink**) 12-21-2005, 10:26 AM

oops, i meant 203k... i inadvertantly typed 403k.

Greg · #8 (**permalink**) 12-21-2005, 10:27 AM

Had to be 203k. Was that a typo?

Not sure what it was like 3 years ago honestly. I have done FHA for 2 years.

Does not make sense based on what I know. Over loan limit and qualifications have been the same over those 2 years. Maybe the appriaser overlooked those requirements. But loan amount does not make sense.

Best4U · #9 (**permalink**) 12-27-2005, 02:56 PM

Greg,
I thought I had one for you, but I don't see Maine in your list of states.
Anyway, tell me if this is an FHA candidate.

I have a couple in ME with:
-middle score: husband 501 and wife 502 (wife has higher income)
-mortgage lates on a home in both names (slow months at work, but
everything’s resolved now; letter of explanation available; never late before this situation)
-combined income of $60,000
- over 2 yrs in same line of work
-full documentation
-owner occupied

Seeking
$270,000 Debt Consolidation Refinance , 90% LTV
(currently owe $240k, home appraised for $301k within last 2 weeks)

Greg · #10 (**permalink**) 12-27-2005, 03:38 PM

Mortgage Delinquency is a huge implication with FHA.

When was the delinquency? If beyond 24 months ago then ok. If not good LOX is needed. Hopefully it is not now or recent. How many times if multiple.

Most times if there is a 60 or greater they will turn them down.

Currently 85% C/O and as of January 95% C/O.

Seems like a good shot based on what you provided.

But, FHA has loan limits and if they exceed those limits than will not get an FHA loan. These are published on HUD.gov. You can search google for FHA Loan Limits and it should show the page where it is on HUD.

Yeah I lost Maine when we were aquired. Probably will get it back soon though.