FHA loans (PMI, loan, approve, foreclosure)

[momandwifefromcali]

What are the cons and pros of FHA loans?

Thank you for the help

[Briolat21]

Decent rates, better debt ratios (I think), but there's a cap on the price of the home...

Also, I think if you qualify for conforming loans, you'll do better with straight conforming rather than FHA.

But there's nothing wrong with FHA if that's what you want to go with...

Good luck!

[renriq02]

fha low down payment 2.25% requirement
no score requirement...you can have a 400 credit score still get the same rate.
Manual Underwrite - for the lenders that do MU...they can overlook some criteria and still approve you.
Low PMI payments.
30days on the job....

cons
1.5% funding fee......have to pay for it..but it's financed in the loan.
can be a higher rate than average.
they have county limits....most counties are 200k....big metro areas are around 362k. Legislation may override this soon..and make it higher.
they have tougher appraisal restrictions. restrictions protect the buyer.

[twv706]

FHA is a great way to finance your home if your credit is good or less than perfect. Depending on the loan program your seeking and your financial and credit situation plus how the loan will be used, will determine the pros and cons of FHA loans.

[renriq02]

the most commonly used FHA program is the FHA 203b for residential properties.


You can use it for purchase or refinancing a residential property.

[jeffselan]

Another pro- FHA is an assumable loan.

Another con- You "usually" can only have one FHA loan at a time.

[LJeen]

Originally Posted by banker0679

the most commonly used FHA program is the FHA 203b for residential properties.


You can use it for purchase or refinancing a residential property.

Can you tell me what the rehab portion entails? What it will repair and what is the cost limit of repair?

Thanks!

[renriq02]

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

Originally Posted by LJeen

Can you tell me what the rehab portion entails? What it will repair and what is the cost limit of repair?

Thanks!

[LJeen]

Originally Posted by banker0679

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

Thanks but I've read that awhile ago and I have no idea what it's saying. I would need a degree.

[NYLATINQT]

If you are still in CA, then you might have a hard time getting an FHA loan depending on the mortgage limit where you live. Assuming you can get an FHA loan, i'd say one big plus is that there is added protection should you ever default on a loan. I work for a credit counseling agency doing mortgage foreclosure prevention and I can tell you that when we have a client with an FHA loan, we are so happy. With any other mortgage (except VA), if you are 3 mos past due, the lender can start foreclosure. With an FHA loan, they usually won't start until about 6 mos. And then let's say you fell behind due to a job loss, then got a new job but didn't have the money to bring the loan current, you can get a "partial claim" where HUD pays the arrears and then they do put a lien against the house, but there is no interest charged on that and you only pay it back when you sell the house. They really do go out of the way to try to keep you in the house. I've had FHA step in and stop foreclosures only days away. YOu could not do that with a conventional mortgage except to file bankruptcy. and if you think that you would never get behind on a mortgage, never say never.