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Phil Myers' Blog

By Phil Myers | Home Buyer in Tampa, FL

Learn how to obtain an FHA Home loan, 97% Financing

Learn how to obtain an FHA Home loan

An FHA loan is a Federal Assistance Mortgage loan or Guaranteed by the FHA. FHA home loans  in the United States are  insured by the Federal Housing Administration. These FHA home loans  are insured by private  qualified FHA mortgage lenders.

FHA mortgage loans have historically helped lower income homebuyers and homeowners borrower money to purchase or refinance a home that they would not otherwise be able to afford without FHA mortgage insurance. FHA home loans originated during the Great Depression, when the rates of foreclosures and mortgage loan defaults were at their height, and the FHA Home loan program was created to provide FHA mortgage lenders with sufficient insurance to encourage them to make more mortgage loans. Some FHA mortgage programs were subsidized by the government, but the goal of the FHA mortgage program was to make it entirely self-supporting, based on FHA mortgage insurance premiums paid by FHA mortgage applicants.

Over time, PMI private mortgage insurance companies came into play, and now FHA primarily serves FHA mortgage applicants who cannot afford a conventional down payment or otherwise do not qualify for PMI.

In August 30, 2007, the FHA added a new refinancing program called FHA-Secure to help subprime borrowers hurt by the 2006 subprime mortgage crisis

Florida FHA Mortgage Loan

Florida home buyers should know the many advantages of the FHA mortgage loan programs. FHA loans were created to help increase home ownership. For the Florida home buyer the FHA program can simplify the purchase of a home, making financing easier and less expensive than a conventional mortgage loan product. Some highlights of the Florida FHA loan program include:

Minimal Down Payment and Closing costs.

  • Down payment less than 3% of Sales Price Gifts are allowed
  • Seller can credit up to 6% of sales price towards closing and prepaid costs.
  • 100% Financing available
  • No reserves required.
  • FHA regulated closing costs.

Easier Credit Qualifying Guidelines such as:

    • No minimum FICO score or credit score requirements.
    • FHA will allow a home purchase 1 year after a Bankruptcy.
    • FHA will allow a home purchase2 years after a Foreclosure.

To take advantage of the FHA program in Florida, give us a call 1-800-570-0448 or use our quick application to find out more about the many FL mortgage programs we can make available. Or Apply now for a FL FHA home loan

FHA does not make mortgage loans. Rather, it insures loans made by private FHA approved mortgage lenders. The first step in obtaining an FHA loan is to contact an FHA mortgage lender.

Second, the potential FHA lender assesses the prospective home buyer for risk. The analysis of one's debt to income ratio enables the buyer to know what type of home can be afforded based on monthly income and expenses and is one risk metric considered by the lender. Other factors, e.g. payment history on other debts, are considered and used to make decisions regarding eligibility and terms for a loan.

Section 251 insures home purchase or refinancing loans with interest rates that may increase or decrease over time, which enables consumers to purchase or refinance their home at a lower initial interest rate.

FHA's mortgage insurance programs help low- and moderate-income families become homeowners by lowering some of the costs of their mortgage loans. FHA mortgage insurance also encourages lenders to make loans to otherwise credit-worthy borrowers and projects that might not be able to meet conventional underwriting requirements, protecting the lender against loan default on mortgages for properties that meet certain minimum requirements—including manufactured homes, single and multifamily properties, and some health-related facilities. The basic FHA mortgage insurance program is Mortgage Insurance for One- to Four-Family Homes (Section 203(b)).

FHA allows first time homebuyers and moving up buyers are only required to put down as little as 3.5% and receive up to 6% towards closing costs. If little or no credit exists for the applicants, the FHA will allow a blood relative, such as Mom or Dad, to co-sign for the loan without requiring them to reside in home with first time homebuyer. This is called a Non-Owner-Occupied Co-Borrower. Depending on the state you reside in, you may receive a discount on your State Transfer Taxes at settlement.

Required Documentation For FHA Loans

  • A 2year history of employment in the same field is required
  • If you are a recent college graduate, your last two years of schooling can be used if you are currently working in your field of study
  • Credit Scores normally need to be above 620 for Conventional financing-580 for FHA and VA looks at a case by case basis
  • If no credit history exists-you may use cell phone bill, cable bill, previous rental history, etc. to establish a “pattern” of good credit payments
  • Proper ID as defined by the Patriot Act (State Driver’s License or Birth Certificate along with a copy of your Social Security card required)
  • Debt Ratios should be below 36/46


    Serving These Fine Florida
Communities:

Arcadia :: Boca Raton :: Boynton Beach :: Bradenton :: Brandon :: Cape Coral :: Clearwater :: Clewiston
Crestview :: Daytona Beach :: Deerfield Beach :: Deland :: Delray Beach :: Deltona :: Destin :: Englewood
Fort Pierce :: Ft. Lauderdale :: Ft. Myers :: Ft. Walton Beach :: Gainesville :: Hollywood :: Homosassa Springs
Jacksonville :: Key West :: Kissimmee :: Lake City :: Lakeland :: Lynn Haven :: Marathon :: Marco Island
Melbourne :: Miami :: Miami Beach :: North Fort Myers :: North Miami Beach :: Naples :: Ocala :: Okeechobee
Orlando :: Ormond Beach :: Osprey :: Palatka :: Palm Bay :: Palm Beach :: Palm Coast :: Panama City :: Pensacola
Pompano Beach :: Port St. Lucie :: Punta Gorda :: Santa Rosa :: Sarasota :: Sebastian :: Sebring :: Springhill
St. Augustine :: St. Petersburg :: Tallahassee :: Tampa :: The Villages :: Titusville :: Venice :: Vero Beach
Wauchula :: Wesley Chapel :: West Palm Beach :: Winter Park


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