FHA new down payment and loan limits

 2009 FHA Loan Limits

The 2009 FHA loan limits are calculated at 115% of the area median sales price.  For 1-unit, the FHA floor remains at $271,050 and the ceiling is now at 150% of the conventional floor, or $625,500.  Below is a table illustrating the 2009 FHA loan limit Floor and Ceiling:

 

2009 FHA Loan Limits
	1 – Unit	2 – Units	3 – Units	4 – Units
Minimum (Floor)	$271,050	$347,000	$419,000	$521,250
Maximum (Ceiling)	$625,500	$800,775	$967,950	$1,202,925
Alaska & Hawaii	$938,250	$1,202,150	$1,451,925	$1,804,375

 

 In order to determine the FHA Loan Limit for your area, please follow the link below, type in County where your property is located and click on the “down arrow” next to “Limit Year” and select “CY2009” before you click on “Send”.  This will bring up the FHA Mortgage Limit in your desired area for 2009.

 

https://entp.hud.gov/idapp/html/hicostlook.cfm

 

 FHA Down Payment Requirements

Effective with new case number assignments on or after January 1, 2009, the minimum down payment requirement on purchase transactions increases to 3.5% (from 3%) of the lesser of the appraised value or sales. This amount is in addition to any borrower closing costs.

 This change eliminates the previous loan-to-value limits that varied by property value and average closing costs for the state.

 For all refinance transactions, including streamline refinances, the maximum loan-to-value is 100% of the appraised value, including the financed upfront mortgage insurance premium.

 The new down payment requirements only apply to FHA 203(b), 234(c), and streamline refinance loan programs.

3 days till FHA credit based change

Many people have been interested to what these changes mean and how it works.  Let me tell you the difference.  RIGHT NOW if you found a house and use FHA financing, NO MATTER WHAT THE CREDIT SCORE, the upfront mortgage premium is 150 basis points and the monthly mortgage insurance is .5% of the loan amount.  Example I looked at today was a borrower buying a $161,000 house with a 633 credit score.  his upfront fee(financed into the loan) is $2,342 and $65 monthly.  With the changes Mon the 14th upfront will go to $2,732 and $71 monthly.  That’s an additional $750 over the 60 months.  Hopefully FHA and HUD will continue to bail out the tough housing industry with that extra money.  Other credit scores will be effected differently.  Se the chart below.

FHA Single Family Mortgage Insurance Upfront and Annual Mortgage Insurance Premiums  (Loan Terms > 15 years) Effective as of July 14, 2008
All premiums are specified in basis points (0.01%)
Decision Credit Score  (FICO)
LTV	850-680	679-640	639-600	599-560	559-500	499-300	NON-TRADITIONAL
≤ 90.00	125/50	125/50	125/50	150/50	175/50	175/50	150/50
90.01-95.00	125/50	125/50	150/50	175/50	200/50	n/a	175/50
> 95	125/55	150/55	175/55	200/55	225a/55	n/a	200/55
A first-time homebuyer, with HUD-approved counseling, will pay only 200 basis points for the upfront mortgage insurance premiums.

 

Dont forget your free credit report is waiting for you at www.buyorrefi.biz

More Buyers Buying using DPA

It’s awesome how many calls I’m getting lately saying give us an approval letter.  A recent stat I saw from the National Association of Realtors said 47% of homes being sold are to first time home buyers.  Go get em kids.  With the DPA ( down payment assistant) programs that let the seller gift the 3% down and with banks needing to raise capital homes are starting to move.  The average sales price is dropping like the Dow Jones when oil and jobs have a bit of bad news, to the low $200’s instead of a year ago around $260,000.  That just tells me America is becoming less greedy.  I hope folks just learn to budget now and not wait for another “BOOM”.

For anyone that doesn’t know how a DPA(down payment assistance) works let me briefly explain.  The seller is able to pay, through a gift program, the required 3% down from a FHA(Federal Housing Administration) loan.  This makes the buyer of the new home come up with the hardest part of home ownership, the down payment.  The program helps thousands of people every month realize their dreams of home ownership. 

Need more info just call or write anytime.

FHA changes July 14`

Very important update.  For the first time in history, FHA will take credit scores into account. These guidelines are effective as of July 14th, 2008. At the bottom of the page is a link to the full update.

The 10 primary guideline changes are as follows:

1. Borrowers need either no score, or at least 500, to get a LTV >90%; see matrix below.

2. Borrowers with a score 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% – 2.25%, based on score.

5. The Monthly Mortgage Insurance will range from .50% to .55% depending on 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. Cash-out, rate & term, and non-delinquent FHA Secure refinances are included in this change.

Click on this link to review the full update: Link to update letter

Approving More Clients

It was two years ago now when most of my borrowers where asking for the combo loan ARM with low rates and I asked if they explored FHA.  We then got into the discussion of fixed rate vs ARM(adjustable rate mortgages) and discover the $58 they were saving to do a sub-prime loan simply was not worth it.  Especially since PMI(private mortgage insurance) is tax deductible for most buyers.  FHA also allows higher loan amount as of March 2008 so more buyers are getting approved on the home of their dreams.  $346,250 in Maricopa County.  But hurry this only goes till the end of the year with changes happening in July on risk based pricing.