FHA Loans and FHA Mortgages

In obtaining a FHA loan might be a tad more challenging now, more than ever. Now with a slightly larger downpayment and the possibility of downpayment assistance programs being delayed or not coming back, the average consumer will just need to be a little more patient. Hence the reason why they will need the services of a mortgage professional more than ever, and just not an order taker.

So, what has changed and will take place next year? FHA Mortgagee Letter 2008-23 - The fact that you will need 3.5% of your own money as a downpayment. 100% of this can still be from a gift, which can still come from several different sources. But none of that 3.5% will be applied to your closing costs as if did in the past.

The effective date for all FHA mortgages on the new downpayment will be January 1, 2009. Now, this is for purchases only. We will still be using the old method for all refinances in regards to FHA loans. The one difference being that you could not exceed the appraised value when for all loans when adding the UFMIP.(upfront mortgage insurance premium)

Some extra changes or non-changes :

  –  Sellers assistance is still permitted up to 6% seller concessions. This 6% is calculated off of the sales price.

  –  As mentioned, closing costs may not be used to help meet the minimum 3.5% downpayment requirement.

  –  On all FHA loans, no matter if it’s a purchase or refinance, the total first mortgage with UFMIP can’t exceed the appraised value.

  –  In regards to the combined loan-to-value (CLTV). If government subordinate liens are involved, the combination of the 1st mortgage and any other lien can exceed 100%. This has always been the same, previous to this new mortgagee letter.

  –  The effective date for the 3.5% change is for all FHA loans with FHA case numbers that are assigned on or after January 1, 2009.

FYI Section - For any of you reading this that have been talking to another loan officer and it takes more than a day to get an answer about anything?  I would start to seek a true mortgage professional. Especially one that understands most guidelines when it comes to FHA mortgages. I am seeing more and more bad advice or misleading information being passed out by loan officers. This could cost you money down the road, no matter how you look at it.

For your FHA mortgage needs, please don’t hesitate to contact me.

FHA Loan changes for 2008 - 2009

   Part 1 - Down Payment Assistance Programs

   Part 2 - Upfront Mortgage Insurance Premiums

   Part 3 - Down payment and Maximum Mortgage Requirements

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