What is all the fuss about these days with FHA loans?
Everyone stands to gain right now from their use!
That's a bold statement for a loan that was created in 1934 and has served up 34 million loans to borrowers. But they are the loan of choice now for several reasons. They protect the lenders because there is insurance against default built in for them. FHA is even better for taxpayers becuase even though it is a government-backed loan, there is little cost to tax payers because the cost is born by the borrower in the form of insurance premiums paid until there is 78% loan to value paid down. They are great for borrowers for lots of reasons, but mostly the fact that it requires minimal down payments-only 3.5%. Realtors are pleased because more buyers can get into loans because this down may be paid as a gift by someone else, credit does not have to be perfect, interest rates are comparable to other loan products, there is more protection against foreclosure for their buyers down the road and appraisals are now more similar to conventional loan appraisals as far as repairs needed.
For borrowers, it is ideal--especially first timers, where they wouldn't qualify for other loans. Now they don't need as much down and even their past credit history is treated with more leniency whether we are talking credit rating or past foreclosures. They are able to buy manufactured homes, multi-family properties, homes needing repairs or rehabbed as well as single family homes more easily. For the over 62 set there is a program for reverse mortgages and for our public servants such as police and teachers, there are deep discounts for buying inner city homes that are in revitalization areas.
If you'd like more info, just send an email. This is the greatest thing since sliced bread--within limits of course.