June 27th, 2015 9:29 AM by Nathan Rufty
FHA stands for Federal Housing Administration and the is to help stimulate the housing market by making home loans more accessible and affordable for those individuals to make homeownership a reality.For 1st time home buyers looking to buy a house, this is a great home loan program to start with, if you have credit scores in the high 500s or low 600s this is a great program for you. FHA is much more flexible in terms of credit scores than Conventional will be. That are 2 areas of the the credit all lending programs are concerned with are, the credit score and what is in the body of the credit. You may have lendable credit but miss the mark on what is in the body of the credit like collections, judgements, short sale, foreclosure, late pays, etc...FHA will allow a higher debt to income ratio than Conventional will, once we run your loan scenario through the DU FHA Score Card, it will approve you at the highest debt ratio based on the strength of the file like credit scores and liquid reserves. An FHA underwriter still will need to review the income to determine accurate debt ratios.Down payment assistance home loan programs are available for all types of home lending but geared more towards FHA loan programs. To see if you are available for any and all types of down payment programs click HERE and complete the short questionnaire form to see what is available for you to take advantage of.The down payment can come from many sources such as, gift from a family member, retirement program, sell of something of value with proper documentation for the paper trail, down payment assistance program (not limited to first time home buyers), combine 2 more down payment assistance programs to purchase a home, we can always find money for the down payment and closing cost.FHA lowered the monthly mortgage insurance on January 26th 2015 from 1.35% to .85% with less than 5% for the down payment. This allows buyers to purchase a little higher in price point, that was a big move for HUD to lower that premium, making housing much more affordable for buyers. Co-Signers are also allowed when applying for a FHA home loan when buying a house. The co-signer can be a non-occupant co-signer, which means they do not need to live in the property with the primary applicant. The co-signer must also qualify as well with their income and credit. So when bringing in an additional applicant make sure they are just as strong as you are. As the guidelines stand today with the down payment are, if you put less than 10% down the monthly mortgage remain in the payment through the 30 year term. If you were to put 10% or more for the down payment the mortgage insurance will drop off after 11 years and you are at 78% of the original purchase amount or the appraised value which ever was less at the time you closed escrow on your property. If you put less than 10% down, the only way to have the mortgage insurance remove is that you must refinance out of the FHA loan and into a Conventional loan. Still an excellent loan programs that offers as little as 3.5% down or .5% down coupled with a down payment assistance home loan program in California.Once in the FHA program, you can refinance into a lower payment without a credit report, appraisal or income documentation, making the refinance that much smoother to process. Each lender will have their own guidelines when it comes to this program known as the FHA Streamline Refinance Home Loan Program. Need to check with a loan officer to see what they require.Each applicant must have their loan application reviewed and processed according each mortgage lender's underwriting guidelines. FHA has their basic underwriting matrixes but each lender may add to those matrixes. I welcome the opportunity to speak or meet with you to discuss your plans and goals about this great home loan for homebuyers looking to work with a seasoned licensed loan officer. FHA home loans in Ontario CA for purchase and refinance lending, FHA is perfect for first time home buyers with low credit scores or limited funds to own a house. We offer this program along with many other direct home loan programs in California. Contact me at 909-503-5600 or email me HERE.