Just a few years ago, in my marketplace not many considered getting an FHA loan because it was thought to be a difficult process and there were other easier to obtain mortgages available.
How things have changed. Today, FHA seems to be on the tip of the tongues of buyers. Recently, every potential buyer I have spoken to wants to find a home that could be purchaesd with an FHA loan.
So what does FHA stand for? The acronym stands for Federal Housing Administration.
First Time buyers are not the only ones that are attracted to this product. It's true that you can get an FHA loan if you purchase a Fixer-upper. However, they are even used for reverse mortgages, so popular now with seniors.
FHA has become a little darling, especially since the economic downturn which saw the demise of many other popular mortgage products. It is extremely attractive because of the low down payment. You can put down as little as 3.5% of the purchase price and your credit can be less than perfect, although there are still guidelines that have to be met, such as:
You need a minimun of 2 years worth of work history. I recently learned that if you are a recent college graduate the time spent in school could be factored into the employment equation, but, you have to provide the diploma.
Since I am a real estate professional, I educate myself about the various mortgage products available. However, I depend on the mortgae professionals to provide in-depth information. Jeff Belonger, a mortgage professional based in New Jersey, has written extensively on FHA . His postings are a must read as he compares conventional loans with FHA and shows you how to get the best out of the product.
One important point you have to keep in mind is that FHA has limits on the amount it will lend and this varies even from county to county. I have provided a chart of the limits in the market area I typically cover.
FHA LIMITS FOR NY COUNTIES
| Property Types | Columbia | Dutchess | Ulster |
| Single Family | $276,250 | $443,750 | $406,250 |
| Duplex | $353,650 | $568,050 | $520,050 |
| Triplex | $427,450 | $686,650 | $628,650 |
| Four-Plex | $531,250 | $853,350 | $781,250 |
So buyers now is the time to get that FHA loan and possible benefit also from the tax credit.
Jennifer Fivelsdal- Broker- JFIVE HOMES REALTY LLC - 845-758-6842- jennifer@jfivehomes.com and www.jfivehomes.com
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Jennifer Fivelsdal - JFIVE HOMES REALTY LLC - 845-758-6842- jennifer@jfivehomes.com
www.jfivehomes.com or www.midhudsonhomevalue.com
Well written Jennifer. This is an easy read and I like how you tied it into the areas in which you typically work.
Barb Thank you. Since I am frequently asked the limits I thought it was a good idea to post them.
Jennifer - Today there are still so many other options for buyers to consider, it can all be sorted out with the help of a good mortgage broker.
Carol there is, and that is why I reference Jeff series on FHA versus other conventional mortgages. It is also important that as agents we work with mortgage professionals who will discuss the options available.
Jennifer,
Hey buyers love FHA because it has good things compared to conventional as the down payment, also the good thing is the waiver for the fix ups or investment properties for the title seasoning.
The FHA has been popular in Mass as well due to the lower down payment requirements!
Ray that is so true. It is a great product for someone who wants to re-hab a property.
Bill who wouldn't want a product with a low down payment when most are suffering from the economic crunch.
Jennifer,
Down here, we are having a few growing pains with FHA loans, and I've had several offers in multiple situations where we lost because it was an FHA contract. Hopefully, it will get easier as these loans become more common.
Pat some are still hesitant to accept FHA I am having that issue right now with new construction. Although I did find a couple builders who were accommodating. Most of the builders want to see at least aa 10% at contract not 3.5%..
I do think more sellers and builders will get on board as they realize this will be a vehcile to move some inventory.
Jennifer -A lot of PG County MD home buyers are using the FHA Product to purchase their next home. Thanks for sharing. And congratulations on your new real estate brokerage. Great post.
Great post Jennifer! There are alot of changes with FHA seemingly every day but a good Mortgage Professional will keep up with those changes. It is a full-time job to say the least!
There are still banks out there that will lend below 620 on FHA, with some lending as low as 530. You can't do that with any Conventional program in this environment at all!
Homepath (Conventional) still requires only 3% down as long as it is an owner occupied, they have a score of 660+, and the property is listed on their website.
There are so many options available! My best advise is keep your Mortgage Broker on speed dial!
Thanks for the post!
I am still surprised that FHA financing is the best "deal" out there. A couple of years ago, it was only if you needed the low down payment that it was a preferable choice. Now, not only down payment, but MIP is much lower (about to go up though) than PMI on conventional, interest rate, LTV ratios, etc. makes it a good choice.