There could be no better time than now to by your first home in Southern California, especially in the Inland
Empire region. Prices have dropped in some places in excess of 40%, interest rates are hovering around in the low 5% and FHA loans are your best bet if you have some credit challenges.
Read this article now I just read on CNN Money, then call me directly to find out how to get an FHA loan at (909)512-6418.
Sincerely,
Carlos Samaniego,CMPS Qualifying for a low-down FHA loan Federal Housing Administration lending is soaring – with good reason. These mortgages are affordable, flexible and available. By Les Christie, CNNMoney.com staff writer Last Updated: April 6, 2009: 3:17 PM ET
NEW YORK (CNNMoney.com) — Mortgages insured by the Federal Housing
Administration can be a lifeline for low-income or high-risk borrowers.
These loans have tiny down-payment requirements, competitive rates and
easy credit-score hurdles.
In fact, terms are so attractive that some may ask why all home buyers don't use FHA mortgages.
Well,
a lot more of them do. Since the housing bust began, FHA lending has
soared to account for 20% of the total dollar volume in home loans – up
from just 3% in 2006.
There were 384,451 home purchase loans
issued during the first two months of 2009, nearly four times the pace
of 2008 when 631,649 were issued, and far more than the 278,393 issued
for all of 2007. The number of authorized FHA lenders skyrocketed 500%
over the past two years.
"FHA stays active in volatile and
declining markets, continuing to make mortgage credit available to
borrowers, even when private mortgage providers are withdrawing," said
the Secretary of Housing and Urban Development, Shaun Donovan, in
Senate Appropriations Committee testimony on Thursday. "During
difficult times, it is critically important to have an entity like FHA
play this role – offering families access to near-prime rate financing."
FHA
loans are especially attractive for homebuyers with steady incomes who
cannot scrape together a 20% down payment because FHA lenders will
finance up to 96.5% of the home price.
According to Maryland-based mortgage consultant Allen Hardester, the other attractions of FHA loans include:
- A better loan modification program.
The agency has a long history of helping borrowers who fall behind on
payments. In two-thirds of default cases the agency figured out a plan
to keep borrowers in their homes. And 90% of those mitigations were
still working after two years. - They're cheap to refinance. FHA loans can be easily – and often cheaply – converted to similar FHA mortgages if interest rates drop.
- Borrowers with weak or limited credit histories may still qualify.
Mortgage applicants can have very short credit histories or a late
payment or two on their records and still get approved with low
interest rates. The FHA guidelines set the credit score minimum at 620,
but exceptions may be made for people with even lower scores. - Low rates. For
months, interest rates on FHA loans have been lower than conventional
loans. Plus, rates don't vary with credit score; you pay the same
whether you're a 620 or a 700.
Although these loans target
low- and moderate-income Americans, there are no income restrictions.
However, FHA does limit the amount that can be borrowed, based on area
home values. For example, the most that can be borrowed in a high-cost
area such as New York City is $729,750; meanwhile, in Buffalo, N.Y., a
purchaser can borrow no more than $276,250. Check the cap limits in your home town.
In
addition, borrowers must pay an up-front insurance premium totaling
1.75% of the loan, which goes into FHA's fund for repaying lenders if
borrowers default. So if you take out a $200,000 loan, you would need
$3,500 at closing, in additional to normal costs.
Otherwise,
there are few restrictions to getting an FHA loan. However, there is a
perception that they are difficult to obtain. And they once were.
Few
lenders would originate FHA loans during the housing boom because the
underwriting and appraisal process was so strenuous. "If there was a
crack in the sidewalk, they wouldn't approve the loan," said George
Hanzimanolis, a mortgage broker in Pennsylvania and past president of
the National Association of Mortgage Brokers..
That all changed a
few years ago when HUD rethought its guidelines. Now, the process can
be nearly as fast and painless as conventional loans.
The one
class of borrowers who may be slightly better off with conventional
mortgages are ones with very high credit scores who make substantial
downpayments. Keith Gumbinger, of HSH Associates, a publisher of
mortgage information, said they may save an eighth of a point on their
rates.
To find an authorized FHA lender, go to the Department of Housing and Urban Development Web site. 
First Published: April 6, 2009: 11:38 AM ET
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