FHA Loan Information

What is an FHA loan? An FHA mortgage is one backed by the Federal Housing Administration, in connection with the Department of Housing and Urban Development (HUD). It is designed to grant a loan to those looking for a new home or to refinance their existing home. There are no income or geographic limitations. You can’t borrow 100%, but you can buy a home with as little as $500 of your own money and normally up to 97.75% of the purchase price---plus the upfront mortgage insurance (PMI). To help with the down payment, you can receive grants, gifts, SHIP FUNDS. other government down payment programs, qualified down payment assistance and seller contributions up to 6%.

Example. Here’s a true story about a family that came to us for help with a mortgage. We’ll call them Dave and Meg. They had recently married and combined their households. They each had 3 children ranging in age from 3 to 8 years old. They all lived in a 2 bedroom apartment and obviously the family needed more room. Dave and Meg had searched on the internet to help quicken the process for finding a lender countrywide. They were told as children that there was a moneytree out there but they never found it. They also searched for a moneystore, but didn’t find that either. Dave and Meg did speak with a few lenders and were told all they could have was a sub-prime loan since they didn’t qualify for anything else. Dave's score was too low for conventional financing plus he only had enough money for a small down-payment. Dave's FICO score was only 525 and Meg’s was even lower--plus she was a stay-at–home mom. Dave finally spoke with Brentwood and we told him that we could get him an FHA mortgage. We were able to obtain an FHA 30 year, fixed rate mortgage with a rate of 6.625%. We counseled the Realtors on how to structure the contract to allow for the seller contributions and other FHA requirements. Dave and Meg moved into their new four bedroom home and actually had a monthly payment less than what they had budgeted. For Dave and Meg, borrowing with Brentwood Mortgage was a breeze.

Who qualifies? Any US citizen or “Green Card” resident may qualify for an FHA mortgage. You must prove adequate income, some cash assets and as little as $500 which may come from approved sources.

Credit. While good credit is best, you don’t have to have it. FHA loans are not credit score driven but they are credit driven. Events happen to us that aren’t planned--Divorce--illness--loss of employment--things happen. With FHA loans, we look at why there are late payments and what caused them. If the late payments were because of poor money management, then we have to work on that problem. However, if they were late 12 months ago due to a divorce and they’ve been on time since then, that may be OK. If you are just starting out and have no credit we can help build a credit history for you. Even a bankruptcy or foreclosure in the past will be analyzed for the actual reason/cause.

Purchase a home. You can purchase a single family home or up to a 4 family home as long as it is you plan to reside there. You can even buy a home that needs repairs and that will fall under the 203k loan program. Improvements can be up to $35,000 and you must document the work to be done and it must be inspected by an FHA approved inspector.

Rates. FHA mortgages typically have rates that are almost identical to conventional conforming mortgage rates. Any loan where the loan-to-value is greater than 80%, conventional lenders require mortgage insurance (PMI). FHA's version of PMI is an an up-front fee which is added to the loan amount and results in a reduced monthly payment over normal PMI. Taxes and insurance are also paid along with the monthly mortgage payment.. Since the rate is low and the mortgage insurance is reduced, monthly payments can be affordable.

Refinance. You can also refinance into an FHA mortgage. The maximum loan-to-value for a loan without any cash-out is 95%. If you want to get cash to pay off some debt, the loan-to-value is reduced to 85%. The rates are the same for a purchase or a refinance. Recently, FHA has come out with a new program to help homeowners that have an adjustable rate or option arm mortgage that has increased/adjusted. It even allows late mortgage payments plus you can be in foreclosure--as long as it is because of the rate increase. It can be at a 97% loan-to-value and will also allow a second mortgage up to a total loan-to-value of 125%. This is perfect for the homeowner whose home has depreciated and the payment has gone up as a result of increased rate. The second mortgage must be from another lender.

Lending Limits. Take a look at the table below to see the loan limit for your county. This doesn’t mean that you can’t buy a more expense house. It just means that this is the maximum loan size. An example is if you were looking for a single family home in Alachua County, the maximum loan will be $204,440.

County Name	1-Family	2-Family	3-Family	4-Family
ALACHUA	$204,440	$256,248	$309,744	$384,936
BAKER	$294,500	$331,700	$403,000	$465,000
BAY	$251,750	$283,550	$344,500	$397,500
BRADFORD	$200,160	$256,248	$309,744	$384,936
BREVARD	$221,350	$256,248	$309,744	$384,936
BROWARD	$362,790	$413,695	$502,621	$579,947
CALHOUN	$200,160	$256,248	$309,744	$384,936
CHARLOTTE	$224,209	$256,248	$309,744	$384,936
CITRUS	$200,160	$256,248	$309,744	$384,936
CLAY	$294,500	$331,700	$403,000	$465,000
COLLIER	$362,790	$427,893	$519,870	$599,850
COLUMBIA	$200,160	$256,248	$309,744	$384,936
DE SOTO	$200,160	$256,248	$309,744	$384,936
DIXIE	$200,160	$256,248	$309,744	$384,936
DUVAL	$294,500	$331,700	$403,000	$465,000
ESCAMBIA	$200,160	$256,248	$309,744	$384,936
FLAGLER	$218,500	$256,248	$309,744	$384,936
FRANKLIN	$200,160	$256,248	$309,744	$384,936
GADSDEN	$200,160	$256,248	$309,744	$384,936
GILCHRIST	$204,440	$256,248	$309,744	$384,936
GLADES	$200,160	$256,248	$309,744	$384,936
GULF	$200,160	$256,248	$309,744	$384,936
HAMILTON	$200,160	$256,248	$309,744	$384,936
HARDEE	$200,160	$256,248	$309,744	$384,936
HENDRY	$200,160	$256,248	$309,744	$384,936
HERNANDO	$222,300	$256,248	$309,744	$384,936
HIGHLANDS	$200,160	$256,248	$309,744	$384,936
HILLSBOROUGH	$222,300	$256,248	$309,744	$384,936
HOLMES	$200,160	$256,248	$309,744	$384,936
INDIAN RIVER	$213,750	$256,248	$309,744	$384,936
JACKSON	$200,160	$256,248	$309,744	$384,936
JEFFERSON	$200,160	$256,248	$309,744	$384,936
LAFAYETTE	$200,160	$256,248	$309,744	$384,936
LAKE	$268,850	$302,810	$367,900	$424,500
LEE	$270,750	$304,950	$370,500	$427,500
LEON	$200,160	$256,248	$309,744	$384,936
LEVY	$200,160	$256,248	$309,744	$384,936
LIBERTY	$200,160	$256,248	$309,744	$384,936
MADISON	$200,160	$256,248	$309,744	$384,936
MANATEE	$336,100	$378,554	$459,926	$530,684
MARION	$200,160	$256,248	$309,744	$384,936
MARTIN	$276,640	$311,584	$378,560	$436,800
MIAMI-DADE	$362,790	$413,695	$502,621	$579,947
MONROE	$362,790	$464,449	$561,411	$697,696
NASSAU	$294,500	$331,700	$403,000	$465,000
OKALOOSA	$237,405	$267,393	$324,870	$384,936
OKEECHOBEE	$200,160	$256,248	$309,744	$384,936
ORANGE	$268,850	$302,810	$367,900	$424,500
OSCEOLA	$268,850	$302,810	$367,900	$424,500
PALM BEACH	$362,790	$413,695	$502,621	$579,947
PASCO	$222,300	$256,248	$309,744	$384,936
PINELLAS	$222,300	$256,248	$309,744	$384,936
POLK	$205,200	$256,248	$309,744	$384,936
PUTNAM	$200,160	$256,248	$309,744	$384,936
SANTA ROSA	$200,160	$256,248	$309,744	$384,936
SARASOTA	$336,100	$378,554	$459,926	$530,684
SEMINOLE	$268,850	$302,810	$367,900	$424,500
ST. JOHNS	$294,500	$331,700	$403,000	$465,000
ST. LUCIE	$276,640	$311,584	$378,560	$436,800
SUMTER	$211,375	$256,248	$309,744	$384,936
SUWANNEE	$200,160	$256,248	$309,744	$384,936
TAYLOR	$200,160	$256,248	$309,744	$384,936
UNION	$200,160	$256,248	$309,744	$384,936
VOLUSIA	$230,177	$259,252	$314,979	$384,936
WAKULLA	$200,160	$256,248	$309,744	$384,936
WALTON	$362,790	$409,275	$497,250	$601,692
WASHINGTON	$200,160	$256,248	$309,744	$384,936

1. How do I know if I am ready to buy a home?

2. How do I begin the process of buying a home?

3. How does purchasing a home compare with renting?

4. How does the lender decide the maximum loan amount that I can afford?

5. How do I select the right real estate agent?

6. How can I determine my housing needs before I begin the search?

FINDING YOUR HOME

7. What should I look for when deciding on a community?

8. What should I do if I'm feeling excluded from certain neighborhoods?

9. How can I find out about local schools?

10. How can I find out about community resources?

11. How can I find out how much homes are selling for in certain communities and neighborhoods?

12. How can I find information on the property tax liability?

13. What other tax issues should I take into consideration?

14. Is an older home a better value than a new one?

15. What should I look for when walking through a home?

16. What questions should I ask when looking at homes?

17. How can I keep track of all the homes I see?

18. How many homes should I consider before choosing one?

YOU'VE FOUND IT

19. What does a home inspector do and how does an inspection figure in the purchase of a home?

20. Do I need to be there for the inspection?

21. Are other types of inspections required?

22. How can I protect my family from lead in the home?

23. Are power lines a health hazard?

24. Do I need a lawyer to buy a home?

25. Do I really need homeowner's insurance?

26. What steps could I take to lower my homeowner's insurance costs?

27. Is the home located in a flood plain?

28. What other issues should I consider before I buy my home?

29. How do I make an offer?

30. How do I determine the initial offer?

31. What is earnest money? How much should I set aside?

32. What are "home warranties" and should I consider them?

GENERAL FINANCING QUESTIONS: THE BASICS

33. What is a mortgage?

34. What is a loan to value (LTV) how does it determine the size of my loan?

35. What types of loans are available and what are the advantages of each?

36. When do arms make sense?

37. What are the advantages of 15 and 30-year loan terms?

38. Can I pay off my loan ahead of schedule?

39. Are there special mortgages for first-time homebuyers?

40. How large of a down payment do I need?

41. What is included in a monthly mortgage payment?

42. What factors affect mortgage payments?

43. How does the interest rate factor in securing a mortgage loan?

44. What happens if interest rates decrease and I have a fixed rate loan?

45. What are discount points?

46. What is an escrow account? Do I need one?

FIRST STEPS

47. What steps need to be taken to secure a loan?

48. How do I choose the right lender for me?

49. How are pre-qualifying and pre-approval different?

50. How can I find out information about my credit history?

51. What if I find a mistake in my credit history?

52. What is a credit bureau score and how do lenders use them?

53. How can I improve my score?

FINDING THE RIGHT LOAN FOR YOU

54. How do I choose the best loan program for me?

55. What is the best way to compare loan terms between lenders?

56. Are there any costs or fees associated with the loan origination process?

57. What is RESPA?

58. What is a good faith estimate and how does it help me?

59. Besides RESPA, does the lender have any additional responsibilities?

60. What responsibilities do I have during the lending process?

CLOSING

61. What happens after I've applied for my loan?

62. What should I look out for during the final walk-through?

63. What are pre-paid expenses and closing costs?

64. What can I expect to happen on closing day?

65. What do I get at closing?

HOW CAN HUD AND THE FHA HELP ME BECOME A HOMEOWNER?

66. What is the U.S. Department of Housing and Urban Development?

67. How does HUD help homebuyers and homeowners?

68. What is the Federal Housing Administration (FHA)?

69. How can the FHA assist me in buying a home?

70. How is the FHA funded?

71. Who can qualify for FHA loans?

72. What is the FHA loan limit?

73. What are the steps involved in the FHA loan process?