FHA FINANCING TIPS:

FHA has become the backbone of the purchase market again. FHA loans offer the most flexible combination of down payment and credit requirements. With loan limits as high as $729,750, the majority of transactions can be handled using FHA financing. FHA purchase loan originations were the only sector of the market that grew last quarter. Understanding the limitations and working with an expert who can help navigate them is critical.

FHA still does high expense ratios and low downpayments--Recently, the last hold out for private mortgage insurance tightened their guidelines significantly. In many situations, like with a 705 FICO score or a 50% expense ratio, private mortgage insurance is no longer available in California--AT ALL. This means a client on the edge must either do 20% down conventional or do a 3.5% down FHA loan--easy choice.

Doing an FHA loan, most clients get approved up to about a 55% expense ratio and sometimes as high as 65%. This allows someone showing about $5,500 p/month income to purchase a home for $440,000 home with only about $15,000 down. The seller can cover all transaction costs, including prepaid expenses like taxes and interest paid in escrow. If income is shallow we can add a co-borrower's income to help qualify.

Each loan situation is unique and requires a specialized expertise. Please call to talk through scenarios.