Loan Program Quick Reference Series

I thought I would write a short series highlighting a number of different loan programs that are available, their main guidelines, and the key benefits to the home buyer.  The featured loan for today is the standard FHA loan.

           FHA is the most popular loan right now.  Here’s why:

           Program guidelines:

                  Loan-to-Value:  96.5%

                        Debt-to-Income Ratio:  as high as 55%

                        Minimum Credit Score:  none, but prefer 640+

                        Mortgage Insurance: 

1)      Up-front = 1% of base loan amount (financed)

2)      Annual (paid monthly) = 1.15% of base loan amount

            Reserves:  None required

                        Bankruptcy:  Need re-established credit

1)      Chapter 7 – eligible 2 years from the discharge date

2)      Chapter 13 – eligible 1 year from the filing with Trustee’s approval

            Foreclosure / short sale:  eligible three years from the foreclosure date or sale date.

         Benefits to the buyer:

            1)   small down-payment requirement

2)   higher debt-ratio allowances – as high as 55%

3)      no reserve requirements

4)      more flexible than conventional financing with regard to credit issues

5)      Seller can pay up to 6% in closing costs

Next I'll highlight VA loans.  Feel free to call or email if you have any questions regarding FHA or any other loan programs:  Jed Wunderli 702-812-1214.