FHA Fact Sheet

FHA Basic Information

In today’s Real Estate market FHA loans are again a big part of the lending landscape. Below are some of the features that make FHA loans attractive and accessible.

Loan Types Fixed, ARMs and Hybrid ARMS
Loan Terms 30yr fixed,15yr fixed,1/1 ARM, 3/1ARM,5/1 ARM
Minimum down payment 3.5% of the sales price or Appraised value whichever is lower. On the 203K products, the “acquisition cost” is basis for the down payment.
Closing Costs All costs are negotiable between buyer and seller.

(except for Tax Service Fee-Buyer cannot pay)
Special Features
  • 100% gift for down and closing costs allowed
  • Non Owner Occupant Co-signers qualify with Owner Occupant –debt and income are combined
  • Assumable loan
  • Energy Efficient Mortgage (EEM) works best with FHA
  • Refinance without an appraisal if FHA to FHA
  • Mortgage Credit Certificate (MCC) reduces qualifying payment
  • FHA loans are the most accommodative when it comes to Down Payment Assistance (DAP) programs
Rehabilitation /Improvement Streamline 203k and Full 203k

(see other documents in this site for additional details)
Not just for First Time Homebuyers This is not just for First Time Home buyers. There are neither income limits nor sales price limits. FHA does have loan limits by county
Houses 1-4 units (if 3-4 units different calculation to qualify and reserve requirements apply)
Lender Imposed Requirements (Overlays) Not all lenders have the same criteria.

Most lenders do not automatically ask for termite report (especially since FHA removed that requirement in 2005)
Mortgage Insurance No 2nd underwriting for Mortgage Insurance
Credit scores Accepts lower scores than conventional loans

Standard credit score 640 , but some lenders will go down to 580 or even lower.(with additional down payment, higher interest rates and stricter guidelines)
Loan is assumable Loan note may be assumed by new buyer if holding mortgage holder allows.  New buyer will have to qualify.
Bankruptcy Rules Borrower may apply two years after the Bankruptcy Discharge date
Foreclosure Three years from fore closure /short sale.  However some restrictions may apply.
Community Property A non-borrowing spouse must have their credit pulled and individual debt will be added to borrowing spouse’s qualifying ratios.
Property Condition Requirements In 2005, FHA significantly relaxed their property standard requirements to be much more aligned with FNMA standards.

Sacramento 1st DBA Comstock Mortgage – Lic : 01390474
Kevin Nunn – NMLS 305826 / DRE 01158674