FHA New Purchases

FHA home loans are not solely for 1st time home buyers. FHA loans are available for 1st or 2nd time home buyers, and existing homeowners. FHA home loans can be used for both purchases or FHA refinance transactions. Also, FHA mortgage loans does not have restrictions on income or locations. However, FHA does have maximum mortgage loan limits that fluctuate per county.

FHA loan financing is available up to 96.5% of the purchase price for one to four family owner occupied properties. The down payment used to be at 3%, and has now been raised to 3.5%. Down Payment Assistance DPA from Nehemiah, Ameridream, and Genesis have also been terminated by the US government. These programs will cease on September 30th, 2008. Seller can still pay up to 6% of the buyer’s closing costs. Seller paid closing costs does not require help from any DPA programs. Seller paid closing costs does not require help from any DPA programs. FHA mortgage rates are very competitive, and maybe lower than your normal conventional loan.

FHA loans also have flexible credit guidelines for those with low scores or bad credit histories.
Bankruptcy Chapter 7 - 24 months from date of discharge.
Bankruptcy Chapter 13 - 12months from the date of filing. Must receive Trustee approval if still making BK payments.
Foreclosure; - 36 months from the date of discharge.
Collections - Typically, at least 24 months old, and may not have to pay it off.
Medical Collections - Do not have to be paid.
Judgements - All judgements have to be paid.
Recent Credit History - FHA requires a strong 12 month history of no credit tardiness. Some lates maybe accepted if there are compensating factors. This is also subject to FHA underwriting approval.
Rental History - rental history maybe used to determine payment shock.
Nontraditional tradelines - If there is ‘no credit history’ then the borrower may use the following to help determine an approval:  Car insurance, rental history, phone bills, water bills, electric bills, and car payments. Most FHA lenders require at least 3 tradelines, and may or may not include rental history.