FHA Purchase Updates

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I’m going to bullet out the high points that I believe you will be most interested in right now. 2006 saw a lot of changes to FHA guidelines, so if you haven’t done one in a while…here’s a refresher:

• 3% downpayment. Can come from savings, gift from a parent, employer or union, grant from non-profit
• “Seller Gift Charities” are still OK for now. This is where the seller “gifts” 4% to a charity which in turn “grants” 3% to your buyer
• No more seller-paid non-allowable junk fees. All closing costs are negotiable between buyer and seller except the $75 tax service must be paid by seller
• Property is no longer scrutinized under a microscope. Major health and safety issues will need to be repaired, but most cosmetic and minor issues will be ok to close
• No more mandatory well, septic, and flat roof inspections
• They’ve made the 203k Rehab loan easier to work with, so your buyer can roll repairs into their purchase loan.
• No minimum credit score required. No score is OK too (must build alternate credit)
• 2 years out of bankruptcy, 3 years out of foreclosure (exceptions in rare circumstances)
• Loan limits have been increased through 12/31/2008, examples:

o Central FL = $353,750
o Sarasota = 442,500
o St Lucie = 375,000
o Tampa area = 292,500
o Jacksonville = 387,500
o Melbourne = 291,250

• Condos MAY be spot approved as long as it is under 50% rental occupied.

It is estimated that 35% of all loans closed this year will be FHA, so it is absolutely CRITICAL that you know how to handle them as a real estate professional.

I also wrote a complete review and update on FHA funding in an upcoming article on AgentDirectNews.com…watch for it!