FHA loans and FHA refinance loans enable you to buy or refinance with a low down payment, backed by HUD. The Federal Housing Administration has helped millions of Americans secure their dream of homeownership since 1934.

The FHA insures your loan so that lenders can offer you better, more affordable rates. Whether you live in a single parent household or a multi-parent household, the FHA can help you purchase a home or remodel the home in which you currently live. FHA programs can even help you make home repairs or energy-efficient improvements. Act now, the FHA can help!

Benefits of FHA

Low down payment of 3%
Seller can pay all recurring costs
No cash reserves
100% gift is OK
Liberal debt to income ratios 35/45
Credit doesn’t have to be perfect
Buyers don’t have to be 1st time home buyers
Co-signers are OK
"Streamline" refinancing available with no debt-to-income qualifying or income verification
CASH RESERVES NOT REQUIRED
1 to 4 unit owner occupied properties can qualify (different loan limits apply)
95% cash-out refinances on 1 and 2 unit properties (no rate bumps)
Higher percentage of rental income used for qualifying (90% of gross rent used in Regions IX & X)
Repair/rehabilitation costs may be combined with both purchase and refinance transactions
NO PRE-PAYMENT PENALTIES

Drawbacks of FHA

1. Maximum loan amounts cap out at $362,790
2. Condo’s & PUD’s must be FHA approved
3. Borrower can only have one FHA loan
4. Mortgage insurance required for first 5 years of loan

FHA Loan Facts

Goals:
FHA provides affordable home loans for purchase or refinance.

Occupancy:
Owner-occupied properties only – NO INVESTOR LOANS (except streamline rate reduction refinancing of an exiting FHA loan, HUD Repo’s, or 203K).

Property Types:
SFR, FHA approved Condo and PUD’s, 2-4 units.

Term:
30 year fixed rate, 15 year fixed rate, adjustable and buydown programs available.

Buyer Qualifications:
• No limit on age of buyer or property.
• No income or sales price limits.
• Borrowers must have a valid Social Security Number and picture I.D.
• Borrowers must meet usual loan qualifying criteria such as income, job, and credit guidelines.
• Borrowers can have only one maximum ratio FHA loan at a time.
• Co-borrowers on loans are permissible.

DOCUMENTATION YOU WILL NEED

FHA and Conventional (Full Doc)

1. Salaried Borrowers – Copy of W-2 forms for the past two years.
2. Self-employed Borrowers – Copy of 1099 forms and federal tax forms (include all schedules) for the past two years.
3. Copy of 2 most recent paystubs.
4. Copy of 3 months most recent bank statements (include all pages).
5. Copy of most recent retirement account statement(s) and/or 401K (if applicable)

Purchases – please include last two years phone numbers, addresses, and landlord contact information.

Refinances – please include a copy of your current note and mortgage statement or coupon.

FHA Streamline

1. Copy of mortgage statement or coupon showing your current interest rate and P&I payment.
2. Copy of Deed of Trust
3. Copy of Note
4. Copy of Social Security card, for each borrower on the loan.
5. Copy of Driver’s License for each borrower on the loan.
6. Copy of Resident Alien Card for each borrow on loan (if applicable)

Underwriting could also request…

• Award letters for Social Security or disability income
• Award letters from pension or retirement income
• Rental agreements for all investment properties
• YTD profit and loss statement
• Money market account(s)
• Certificate of Deposits (CD’s)
• Retirement and 401K’s
• Stocks and bonds
• Equity in a life insurance policy
• A copy of a Drivers License or picture ID
• Letter of Explanation for Derogatory Credit
• Other Documentation