FHA Direct Loans

FHA LOAN BUYER QUESTIONS:

 

Are FHA loans for first time home buyers only? NO, FHA mortgage loans are NOT for first–time buyers only. FHA loans can be used by first time buyers and repeat buyers alike.  The FHA loan is often marketed as a product for “first–time buyers” because of the low-down payment and flexible qualifying requirements. FHA mortgage applicants can also purchase an FHA approved investment property 

 

How Does FHA Mortgage Insurance Work? Anyone who takes out an FHA mortgage finances the  insurance into the FHA mortgage loan amount. This “Up Front Mortgage Insurance ” cost is called the “UFMIP”. The upfront mortgage insurance premium paid on all FHA loans is paid to the government and use the funding fee money to reimburse Lender who were forced to foreclose on mortgages that were financed to bad credit mortgage applicants. Think of the funding fee as the foreclosure “insurance fund” for the FHA Lender. In addition to the upfront funding fee, the borrower is also required to pay a small monthly fee to the FHA as part of their monthly mortgage payment. The monthly fee is called monthly MIP or mortgage insurance premium.

 

Do I have to be a first-time mortgage buyer to use the FHA mortgage? No, you do not have to be a first time Florida home buyer but the FHA loan is only for a Primary home purchase only.

 

Can I roll all the closing costs into the FHA mortgage loan? You are permitted to finance the upfront FHA funding fee only. FHA closing costs can be paid by the seller up to 6% and must be negotiated up front in your purchase and sale agreement.

 

Can I get an FHA Loan after a Foreclosure or Bankruptcy? YES! You can qualify for an FHA mortgage 3 years after the title was transferred out of your name.  A borrower may also still qualify for an FHA insured loan after declaring Chapter 13 bankruptcy, if at least 1 year of the bankruptcy payout period has passed and the borrower has been making satisfactory payments. In these cases, the FHA borrower must also request permission from the court to enter into a new FHA loan. declaring Chapter 7 bankruptcy, if at least 2 years have passed since the bankruptcy discharge date.  FHA Loan Applicants must also have re-established good credit or have opted to incur no new debts (this means you specifically chose to take out no new loans, credit cards, etc.)

 

Is there a maximum FHA Mortgage Loan Amount? Yes, Click Here to see maximum loan limits below based on the Florida county.

 

What is the minimum down payment for FHA Mortgage? Currently, 3.5% can from family gift or grant.

 

Can a non-occupant be a FHA Home Loan co-borrower?   Yes, One advantage you will not find with a conventional loan is that with an FHA Mortgage the main borrower has little or no income documentation, FHA permits the borrower to add a non-occupant co-borrower for income qualification purposes.  The non-occupant co-borrower needs to be related.

 

Can my parents or other relatives give me money? Yes,  FHA Loan programs allows the home buyer to obtain 100% gift funds to be used for the down payment and closing costs.  The Gift funds must be properly documented and needs to come from a relative of the home buyer. The gift letter needs to be signed by the donor stating that the funds is only a gift does not have to be paid back to the donor. 

 

The proper documentation for FHA gift funds is critical to the FHA mortgage process.  The mortgage industry places a great deal of emphasis on establishing a formal paper trail of the gift (otherwise known as

source of funds) so it is very important that you review and understand the requirements below.

 

It’s important to note that gift funds must be received from a relative, not a friend or acquaintance.  Also, the required documentation will differ depending on whether you have already received the gift or will receive the gift at a future date prior to closing or settlement as explained below:

 

Gift Funds Yet To Be Received:

 

• Provide executed gift letter. If you have applied for a FHA loan, the FHA Certification section must be signed by both the gift donor and the recipient acknowledging the warning stated in that section.  FHA loans do not require notarization of the borrower’s signature.

• The gift must be in the form of a cashier’s check or certified check or wire. The donor’s name must be printed on the check.  A Cashier’s check is preferred. None of the gift money can be received in cash from the gift donor.

• Make a copy of the gift check front and back clearing your bank account.

 

Gift Funds Already Received:

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• Provide executed gift letter. If you are applying for a FHA loan, the FHA Certification section must be signed by both the gift donor and the recipient acknowledging the warning stated in that section.  FHA loans do not require notarization of the borrower’s signature.

• Provide, signed and dated gift letter from the gift donor, a copy of the front and back of the canceled gift check or a copy of the gift donor’s full bank statement evidencing the withdrawal amount matching the actual gift amount.

• Make a copy of the gift check front and back clearing your bank account.

 

PLEASE BE ADVISED:  Donor’s ability must be verified by receipt of a copy of their most recent bank statement.  Any large deposits will need to be explained and documented.  The donor cannot have borrowed the gift funds thru an unsecured loan.

 

SELLER PAID CLOSING COST-

With an FHA loan the seller can pay up to 6% of the buyers closing cost and prepaids. Ask us more about seller paid closing cost

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