What is FHA?
The Clear Facts on FHA
FHA is a federal agency within the Department of Housing and Urban Development (HUD) that provides mortgage insurance for residential mortgages and sets standards for construction and underwriting. The FHA does not lend money, nor does it plan or construct housing.
Customer Benefits:
- 3.5% down payment; can use non-profit down payment assistance programs or gift funds
- No income restrictions
- Non-traditional credit profile
- No pre-payment penalty
- No minimum FICO score
- Funding Fee:
- Up front mortgage insurance premium (UFMIP): 1.75
- Annual MI: .55% for 30 yr
- Loan Limits:
- $406,250 for Denver- Aurora area (this is the temporary loan limit)
- For other areas refer to HUD website or ask me: http://www.hud.gov/
- Eligible Transactions:
- Purchase
- Full refinance (rate/term, cash out) or FHA streamline refinance
- Eligible Borrowers:
- U.S. Citizens, Permanent Resident Aliens, and Non-permanent resident aliens
- Non-Occupant Co-Borrowers allowed
- Eligible Products:
- 15, 20-30-year fixed rate terms, 3/1, 5/1 ARMs
- Property:
- 1-4 unit, FHA approved condos, PUDs allowed (do not need to be FHA approved), Manufactured homes (meeting FHA’s property requirements)
- Credit:
- Collections- case by case, buy may not be required to pay
- Tax liens- must be paid unless on payment plan
- Bankruptcy
- Chapter 7: minimum 2 years from discharge- with exceptions
- Chapter 13: payments made for 1 yr. & court approval for purchase
- Foreclosure: 3 years
- Consumer Credit Counseling: 1 year pay on time okay