I am a first time home buyer, are there any perks for that besides going FHA. Also, the subdivision is not yet FHA approved, would that be a problem?

Asked by Dot, Willowbrook, IL Tue Sep 21, 2010

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Steve Wagner, Agent, Oakbrook Terrace, IL
Tue Sep 21, 2010
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There are a number of advantages to being able to buy using FHA including: low downpayment (3.5%), lower credit score needed (640 vs. 740 or more), lower mortgage insurance than conventional lender. I don't think a subdivision needs to be approved unless you mean that there is a significant homeowners association like with townhomes. Condos and such developments need to be approved as a whole. If you want to provide me the specific subdivision info I can look into it and generally I can get FHA approval done free of charge.
0 votes
Tammy Hayes, Agent, Port Charlotte, FL
Thu Oct 28, 2010
Contact an FHA lender to check funding for a particular subdivision.

Let FHA Loans Help You
FHA loans have been helping people become homeowners since 1934. How do we do it? The Federal Housing Administration (FHA) � which is part of HUD � insures the loan, so your lender can offer you a better deal.
• Low down payments
• Low closing costs
• Easy credit qualifying
What does FHA have for you?
Buying your first home?
FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.
Want a fixer-upper?
FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs - all in one loan.
Financial help for seniors
Are you 62 or older? Do you live in your home? Do you own it outright or have a low loan balance? If you can answer "yes" to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash.
Want to make your home more energy efficient?
You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.
How about manufactured housing and mobile homes?
Yes, FHA has financing for mobile homes and factory-built housing. We have two loan products � one for those who own the land that the home is on and another for mobile homes that are - or will be - located in mobile home parks.
Ask an FHA lender to tell you more about FHA loan products.
Find an FHA lender http://www.hud.gov/ll/code/llslcrit.cfm
Need advice? Contact a HUD-approved housing counselor or call
(800) 569-4287.
Need help with your downpayment? State and local governments offer programs that can help. Find a program near you. http://www.hud.gov/buying/localbuying.cfm
http://www.hud.gov/buying/loans.cfm
0 votes
Christina Mo…, Agent, Saint Petersburg, FL
Thu Oct 28, 2010
I don't understand - typically it is a unit that would have to be FHA approved NOT ENTIRE SUBDIVISION for sale and in that case would only take FHA inspection and some additional forms to be completed.
0 votes
William Chu, Mortgage Broker Or Lender, Elmhurst, IL
Sat Sep 25, 2010
Since you reference subdivision, I assume you are buying a Single Family Residence (SFR). All SFRs will qualify for FHA financing whereas condo or townhome property types may not or have not been approved by FHA.

In addition to benefits + perks shared in the other posts, a FHA mortgage is assumable by another individual. This can be a benefit to you when + if you are selling to another Buyer.
0 votes
Bradley Egge…, Mortgage Broker Or Lender, Oakbrook Terrace, IL
Thu Sep 23, 2010
Dot,

Being a first-time home buyer is exciting. The biggest perk is that you are entering the world of home ownership and no longer have to throw money away on rent. You are buying at the right time. Home prices are near bottom and interest rates are at an all-time low.

As mentioned already, subdivisions do not have to be approved for FHA. Contact me to discuss further and get pre-approved.

Bradley Eggers
Senior Loan Originator
Ardain Mortgage
847-963-1000 (office)
847-744-0168 (cell)
bradley.eggers@ardain.com
Web Reference:  http://www.bradleyeggers.com
0 votes
Suzanne Hami…, Agent, Orland Park, IL
Wed Sep 22, 2010
Dot -

FHA is available for single-family homes and fee simple townhomes (not in a condo association). These subdivisions don't have to be approved. The FHA just has to send someone to inspect and some additional paperwork needs to be done.

However, if it is a condominium or townhome with condominium ownership, you will need to get the association or individually will have to pay to have this done. This sometimes depends on the amount of ownership the association has vs. rental.

This is costly for an individual usually $1000 more or less, but does not take long. I do work with FHA specialist mortgage people on this and would be happy to help with this.

The only perk with FHA is less money to put down and can sometimes have a lower credit score. You will often pay a higher rate of interest on the loan though.
0 votes
Jeanne Feeni…, Agent, Basking Ridge, NJ
Tue Sep 21, 2010
Hi there, the fact that the community is not yet FHA approved may cause you an issue - if it is condo (vs fee simple) ownership. A change in the rules in Feb of this year, ended spot approvals for individual properties - and required overall approval of the community. This stopped a FHA buyer I was working with - and caused us to shift our search and ultimately their purchase - from townhomes to single family home.

In terms of perks, prices and interest rates. This same couple had gunned for the Federal Tax Credit - they missed it but after taking a brief break we resumed the search and found that the property choices were far improved, the prices a bit more relaxed, and the further decline in interest rates more than made up for the tax credit.

Good luck to you!
Jeanne Feenick
Unwavering Commitment to Service
Web Reference:  http://www.feenick.com
0 votes
Brandon Schu…, Agent, Western Springs, IL
Tue Sep 21, 2010
2 big advantages with FHA is that they're more open to credit issues, plus you don't need as much for a downpayment. As for the subdivison not being FHA approved, that's an issue "unless" your mortgage company is able to do what they call a "Spot FHA".

Good Luck!
0 votes
Lisa Richter…, Agent, Taylorville, IL
Tue Sep 21, 2010
Dot, not sure what you mean about subdivision is not FHA approved. Personally I have never heaRd of that. Now condos yes. But subs no. Can you give a bit more info on the area. And feel free to call me, ill help as much as I can. Are you working with an agent now? Also there are other programs for you possibly depending on income and your local bank And or mortgage co. Depending on area I may be able to suggest some alternatives.
Realtor,
Lisa E. Richter- Seiler
Curvey Real Estate
611 Springfield Rd
Taylorville, Illinois
Lisa@taylorvillehomes.com
217-820-2332
824-4996
0 votes
Caroline Choi, Agent, Los Angeles, CA
Tue Sep 21, 2010
Hi Dot, yes, going FHA means you can put a 3.5% down payment -- which means lower down payment and keeping more money in your pocket. It's a great option for those who may not have enough funds to go conventional. FHA is also more lenient with their credit score standards, and also allows for buyers to ask for recurring/non-recurring closing costs up to 3%.

If the subdivision is not FHA approved, it depends. Is it a single family home that is not tied to an HOA? If the home is in good condition, for the most part it should be ok. If you're buying a condo or townhouse that's associated with an HOA, it is a problem as the complex itself needs to be FHA approved. If you're working with an agent, I would speak to him or her about looking exclusively at FHA approved properties or properties that will have no problem going FHA -- it will save you time!

Best of luck!

Caroline Choi
Broker Associate/Realtor
Caroline Sells The City LA
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