This is Not Your Father's FHA

NAR hears the concerns Realtors have about FHA loans - either they are either too cumbersome to process or that the higher loan limits aren't needed in their particular market.

The new reality is that FHA modernization, in addition to increased FHA loan limits, is designed to help Realtors do what they do best- put people into homes.

Consider that:

100% financing options are becoming a thing of the past, and FHA is becoming a major player for people buying a home or refinancing an existing one.


The homebuyer tax credit will attract active purchasers to the market and help stabilize housing prices.


It is projected that the FHA marketshare of new home loans will increase fivefold between 2007 and 2009.


Many Realtors are stuck thinking of the FHA of old - but FHA has streamlined its application process, and eliminated the requirement for a separate inspection. If you use a qualified FHA lender, processing an FHA loan is comparable to a conventional loan.


Even if your community is not a high cost area, raising the FHA and GSE loan limits will provide liquidity in the market and make mortgage money more available and affordable to borrowers nationwide.
This is Not Your Father's FHA. Throw in the new provision for tax credits and it is obvious that Realtor support for this bill is a no brainer. The Housing Stimulus bill being debated now includes FHA modernization.

Please call me if you are looking for FHA lenders: I know few who do fast FHA and Utah Housing loans.

Important Facts About FHA

1. A Borrowner can obtain financing while still in a Chapter 13 bankruptsy
2. Utah Housing (through the FHA program) will finance up to 103% of a home's value. In other words, you can finance most of the time, everything, no down payment is needed, and even closing costs.
3. Sweat Equity is allowed for new construcion.
4. Screens on windows are no longer required.
5. Termite inspections are no longer required unless specified by the appraiser.
6. Non-occupant co-borrowers are allowed.
7. All money to close is allowed to come from a gift.
8. New, temporary loan amounts in Salt Lake County were increased to $729,750

Zero down mortgages

Zero down mortgages will be the history soon, at least for a while. Fannie and Freddie have several high loan to value programs available, but mortgage insurers are simply not writing the policies any more. Even risk based policies are gone.This means that while the program may exist, no investor will buy them. A clue of this outcome came last week when Congress made a compromise in the housing bill to raise FHA loan down payments instead of lowering them. This is a pretty big indicator of the fear associated with high LTV loans.Senate Democrats also yielded ground on a provision to change the down payment requirements for FHA loans. Democrats have been pushing to reduce them, but the bipartisan agreement actually increases them by half a percentage point. That may not fly in the House, when it considers the package.If you have an unlocked 100% loan in process, check with your loan officer/broker to see if your program is still available. Lock it in if you still can.One program that continues to offer 100% financing is the V.A. (Veterans Administration) loan program for enlisted and retired military members. Home buyers eligible to receive this program can benefit from no out of pocket costs with a properly structured purchase contract.Other than V.A. mortgages, 100% financing may be the history for at least a while.