FHA Loans

FHA Loans

Delaware FHA Loans will have Risk Based Pricing for MI

John Thomas July 13, 2008

FHA announced it will institute risk-based premiums for Mortgage Insurance. All Delaware FHA Loans require the borrower to pay an upfront mortgage insurance premium plus a monthly mortgage insurance premium. For the first time in history, credit scores will be used by FHA to determine your premiums. The changes will go into effect on July 14, 2008.

Let’s take a closer look at the ten primary changes to the Delaware FHA guidelines:


1. Borrowers with either no score or at least 500 may get an LTV >90%.
2. Borrowers with a score of less than 500 get a maximum LTV of 90%.
3. Borrowers without scores will require manual underwriting.
4. Upfront Mortgage Insurance Premiums will range from 1.25% to 2.25%, depending on the score.
5. The Monthly Mortgage Insurance will range from .50% to .55% depending on the score.
6. The premium is based on the borrower with the lowest score.
7. If one of the borrowers has no score, then the Non-Traditional credit grade is used.
8. Credit rescoring is allowed to improve a borrower’s credit grade.9. All FHA Secure refinances >95% LTV with delinquencies have a 2.25% UFMIP and .55% MMI.
10. These changes apply to cash-out, rate & term, and non-delinquent FHA Secure refinances. Here is the link to the mortgage letter explaining the changes from FHA http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/08-16ml.doc Keep Reading...

Delaware FHA Loans – Repair Changes for the Better!

John Thomas April 15, 2008

Even though FHA made a major change to their appraisal requirements, some Realtors, Sellers, and Buyers are still concerned about Loans that require an FHA Appraisal. Most of these people still have concerns because they are not aware of the changes that occurred in January of this year, or they have not seen these change first hand yet.

Here are some of the major changes that occurred in January:

Examples of MINOR property conditions that no longer require AUTOMATIC repair for existing properties are:

  • Examples of Missing handrails;
  • Cracked or damaged exit doors;
  • Cracked window glass;
  • Minor plumbing leaks (such as leaky faucets);
  • Defective floor finish or covering (badly soiled carpeting);
  • Rotten or worn out countertops;
  • Crawl Space with debris or trash;
  • Defective paint surfaces in homes constructed Post 1978

Examples of tests that may no longer be REQUIRED:
 Keep Reading...

Delaware Home Prices Slide in Fourth Quarter of 2007

John Thomas March 13, 2008

Home Prices across most of the U.S. fell for a second straight quarter at the end of last year. According to one report, home prices in both Wilmington and Dover declined in the fourth quarter of 2007.  Nationwide studies suggest the market hasn’t hit bottom yet.

This means it is a great time to be looking to buy a home. Even challenged credit borrowers still have an excellent opportunity to buy a home using FHA or VA loans.  The Federal Government just raised the loan limits for New Castle County to $420,000 for 2008 for FHA loans and $417,000 for both Sussex and Kent. FHA and VA loans will also overlook some blemishes on your credit as long as you can verify your income and meet their guidelines for Debt-to-Income. Keep Reading...

New Delaware FHA Loan Limits for 2008

John Thomas March 7, 2008

HUD announced on Thursday 3/6/2008 that it had completed the revised loan limits for FHA loans.  The new amounts for 2008 are broken down by county. New Castle County will have a new maximum FHA loan amount of $420,000. The old limit was $292,685. Kent County will have a new FHA loan limit of $417,000 and the old limit in Kent was $266,000.

Sussex County will also have a new limit of $417,000.  This is BIG!!! People who have credit challenges can qualify for an FHA loan as long as they can meet the income guidelines.  This limit is only temporary and expires at the end of 2008, so HURRY if you are in this new range. Keep Reading...

Court Decision Upholds Down Payment Assitance Programs for FHA Loans!

John Thomas March 4, 2008

I am pleased to announce that Nehemiah was victorious in its litigation against HUD!

Judge Lawrence K. Karlton of the United States District Court for the Eastern District of California upheld Nehemiah’s motion for summary judgment. The Court Clerk’s Office is directed to enter judgment and close the case.

To be clear, the U.S. Department of Housing and Urban Development’s (HUD) rule to ban private downpayment assistance as proposed in the “Standards for Mortgagor’s Investment in Mortgaged Property regulation published October 1, 2007, is permanently set aside. Keep Reading...

Update on FHA Loan Limit Increase from NAMB

John Thomas February 26, 2008

During a recent teleconference with the U.S. Department of Housing and Urban
Development (HUD), NAMB learned that HUD plans to publish the new FHA loan
limits in a Mortgagee Letter to be issued during the first week of March.

HUD will publish separate lists for the FHA program and the GSEs.

Additionally, HUD will be recalculating the median home prices which are used to
calculate the loan limits.  The new loan limits will be based on 125% of the median
home price in counties across the country and will be capped at $729,750. Keep Reading...

FHA Reform Bill passes Senate

John Thomas December 15, 2007

Important Legislative Update!
 

The Senate today passed their version of FHA reform – S 2338.  Although it has many similarities, this bill is different than the FHA legislation passed by the House (HR 1852 and HR 1427).  The key points of the legislation include:

  • Raising loan limits on all FHA loans including reverse mortgages
  • Lowering down payment requirements on FHA loans
  • Removing the cap on allowable reverse mortgage originations

 

Click Here for a summary of the Senate bill

 

 
Also, you can go directly to the Library of Congress THOMAS web site and search for S 2338, HR 1852, and/or HR 1427 to read the full text of all three bills.
 

The next step for all these bills is for House and Senate negotiators to try and come to an agreement on how the final version of FHA reform will look.  Once the House and Senate come to an agreement, the final version of the bill will be sent to the President for his approval.  Being that we are coming up against the end of the year holiday break, it is unlikely that FHA reform will pass this year, but if the parties are motivated enough to do the right thing, who knows what can happen!
 Keep Reading...

What are the Advantages of an FHA Loan?

John Thomas November 24, 2007

FHA loans are not credit-score driven. Although many wholesale lenders have minimum credit scores, many do not. They traditionally underwrite the file, according to FHA guidelines. If you have no credit or no good tradelines, then FHA loans also allow you to use alternative credit. Monthly obligations like gas, electric, and cell phone bills wherever money is going on a monthly basis as long as you can document it, it’s possible to essentially build a credit history for loan applicants.

Another feature of FHA loans is that all funds can come from a gift, either from a family member, through the seller, or from a down-payment assistance program. Moreover, it’s permissible to have a six percent seller contribution on top of the gift funds which can go towards paying all of the closing costs. FHA Loans also offer market interest rates with no mark up for the high LTV that comes with other high LTV programs. FHA loans can be used for purchasing a home or refinancing a home. If you can even use an FHA loan for a cash-out refinance, but the maximum LTV is 95%. Keep Reading...