FHA Loans

The Federal Housing Administration was started in 1934 as part of the new deal. The FHA’s goals have remained the same throughout the years and they are to contribute to building and preserving healthy neighborhoods and communities, maintain and expand homeownership, and to stabilize credit markets in times of economic disruption.

Details of an FHA Home Loan

The FHA now offers a variety of loan programs and FHA mortgages can have fixed or adjustable interest rates. Many find these home loans are appealing because they require small down payments and gifts can be used for down payments and closing costs.  These loans also have qualifications that are easier to meet than traditional mortgages.  FHA does not require a FICO score to meet qualifications and these programs will allow a home purchase two years after a bankruptcy filing. Many of the other derogatory housing events have far shorter seasoning periods with an FHA loan than a conventional mortgage.

Rehabilitation Mortgage Insurance (203K)

FHA section 203(k) insurance enables homebuyers and homeowners to finance both, the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage – or to finance the rehabilitation of their existing home. First Rate Lending offers the two main types 203(k) loans often referred to as a “mini” and a “maxi”. The types vary based on the total money needed to complete the rehabilitation. The loan to value is based on the proposed renovations combined with the current appraised value. 

Reverse Mortgages

Reverse mortgages are becoming popular in America. Reverse mortgages are a special type of home loan that lets a homeowner convert the equity into a mortgage with no monthly payment and may also allow access to convert equity into cash. They can give older Americans greater financial security to supplement social security, meet unexpected medical expenses, make home improvements, and more.

Click here to learn more about reverse mortgages. Reverse Mortgages with First Rate Lending

FHA Streamline Refinance Requirements

FHA has permitted streamline refinances on insured mortgages since the early 1980’s. The “streamline” refers only to the amount of documentation and underwriting that needs to be performed by the lender and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:

  • The mortgage to be refinanced must already be FHA insured     
  • The mortgage to be refinanced should be current (not delinquent).     
  • The refinance is to result in a lowering of the borrower’s monthly principal and interest payments or to convert from an adjustable rate mortgage to a fixed rate mortgage.     
  • No cash may be taken out on mortgages refinanced using the streamline program