Today I want to take some time to talk with you about upcoming changes to FHA —or Federal Housing Administration—loans.

 

FHA loans have exploded in popularity in recent years—in 2006, the FHA guaranteed just 3% of new home-purchase mortgages, while it insures roughly 30% of home loans today, according to U.S. News & World Report, January 20, 2010.

 

The agency is now working on changes to the program which will impact borrowers and home sellers alike:

 

 

1. The first anticipated change, slated for sometime this spring, is a significant change to the up-front mortgage insurance premiums paid by borrowers which can dramatically increase the cost of obtaining an FHA mortgage.

 

2. Another change for FHA, scheduled for this summer, is likely to change the minimum down payment requirement for borrowers with lower credit scores. Homebuyers with less than a 580 credit score will be required to put down at least 10% of the purchase price. The good news is that homebuyers with credit scores over 580 will still enjoy a low down payment requirement of just 3.5%.

 

3. Sellers will not be allowed to provide as much of a down payment incentive as in the past —known as seller contributions. Right now, sellers will often kick in incentives—usually in the form of paid closing costs—to the buyer to help make their home more attractive on the market. Currently, these seller incentives can be as high as 6% of the home’s value. Beginning this summer, this will be limited to 3% of the home’s value. So, in general, your customers who may be considering FHA financing may want to move more quickly before some of these changes go into effect.

 

Of course, one of the reasons FHA loans have become very popular is because of their LOW DOWN PAYMENT REQUIREMENTS. You have probably spoken with many customers about saving for down payments or making other preparations they might make as they plan for homeownership.

 

When you meet with a customer and discover they are planning to purchase a home, you can benefit from discussing their home purchase plans and timelines.

 

ROMAN REALTORS & FINANCIAL SERVICES, INC., has a wide variety of financing options. The following programs can only be offer by CERTIFIED LOANS OFFICERS.  Please let me know if you have a customer that may be a good candidate.

 

Need a constructive financing pick-me-up for a run-down listing? Our Purchase &  RenovateSM loan option give homebuyers the power to:

• Repair

• Remodel

• Improve

And bring out the best in a home! It’s financing with all the fixings to help make properties

more marketable — and sales more likely.

 

Motivate buyers to take action with these renovation financing advantages:

• More opportunities

Eligible properties include owner-occupied or investment financing for *-, units.

• Ample funds

Loan amounts are based on up to **): of after improvement property values.*

• Simple process

Customers enjoy single loan closing convenience and make just one monthly payment.

• Practical repayment

Renovation costs are spread throughout the mortgage loan term.

• Accommodating guidelines

Improvements can include anything from basic repairs or upgrades, to more extensive renovations.

• Needs-specific selection

Customers can choose fixed- or adjustable rate loans.

Qualified customers can transform unsuitable “befores” with loans based on the value of the upgraded “afters.” Fixer-uppers, rehabs, properties in any condition are eligible.

You name the business-building challenge. We’ll show you how a Purchase & Renovate loan can rise to the occasion.

 

 

 

DAP’s provide financial assistance for qualified borrowers and, depending on the program, may be used for down payment and/or closing costs as allowed by the Housing Agency on FHA, VA and Home Opportunities loans. Helps qualified borrowers buy a home with a minimal down payment, less-than-perfect credit, or non-traditional credit history.

 

The California Housing Finance Agency understands how much you want to own your first home. We also realize how difficult that can be. That is why we offer low interest rate first mortgage programs and a variety of down payment assistance programs to eligible first-time homebuyers, which can turn your dreams of homeownership into reality.

 

 

One of the first things you can think of doing is to refer the customer to a home mortgage consultant. I am here to work with you and and your customers.