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FHA to increase Fees starting April 1, 2012

Wednesday, February 29th, 2012

Home buyers with mortgages backed by the Federal Housing Administration will soon see a rise in fees, the agency announced Monday. 

FHA loans allow for smaller down payments, as low as 3.5 percent compared to traditional loans, and they often have less stringent credit requirements, which have made them soar in popularity in recent years. (The agency insures loans but doesn’t issue them.) About 40 percent of all new mortgages for home purchases in 2010 were FHA-backed mortgages. 

In particular, FHA will increase two fees that borrowers pay. Starting April 1, it will increase its annual mortgage insurance premium for loans under $625,500,  bringing the total cost from 1.15 percent of the loan amount to 1.25 percent. Starting June 1, larger loan premiums will see an increase of 0.35 percent of a percentage point, bringing the total premium costs up to 1.5 percent of the loan amount.

FHA also announced it will raise a fee for the upfront mortgage premium by 0.75 of a percentage point, which will now total 1.75 percent of the loan amount. 

For example, a borrower with a 3.5 percent down payment with a mortgage of $193,000 can expect to pay an upfront mortgage premium alone of $3,377, compared to the prior $1,930. That can be rolled into the mortgage.

Reference: http://realtormag.realtor.org/daily-news/2012/02/28/fha-hikes-fees-mortgages

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The Vue in Downtown Orlando is FHA Approved

Wednesday, February 23rd, 2011

The Vue is 36 stories and offeres state of the art amenities with condominium, townhome and penthouse living. Pricing from $229K for a 1 bedroom to $500,000′s for a 3 bedroom/3 bathroom.

 It’s home to THE one-of-a-kind lifestyle where the best of city life meets the warmth of community. Residents and guests are thrilled with the fact that The VUE is within walking distance to some of downtown’s most sought after destinations and highlights. At The VUE, you are a part of the city, making strides toward saving the environment by reducing the need to drive to the hottest venues.

Amway Arena

Bob Carr Performing Arts Centre

Plaza Cinema Cafe

Lake Eola Park

Orlando Public Library

City Arts Factory

Inside and out, The VUE is the ideal place to make your home and this impressive structure fosters community, ensures your security, and provides you with luxuries and conveniences to make life easier and more enjoyable. Luxury condominium living is a complete experience at The VUE. The luxurious lobby includes a concierge and 24-hour doorman and provides a tasteful and elegant entrance to the building.

To schedule an appointment, call or email us at Vanessa@Simplyfloridarealestate.com

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Mortgage Interest Rates as of February 11, 2011

Friday, February 11th, 2011

The average rate on the 30-year mortgage topped 5 percent this week for the first time since April. Freddie Mac said Thursday that the average rate rose to 5.05 percent from 4.81 percent last week. It hit a 40-year low of 4.17 percent in November. The average rate on the 15-year home loan, a popular refinance option, increased to 4.29 percent from 4.08 percent. It reached 3.57 percent in November, the lowest level on records starting in 1991.

It is still a GREAT time to buy with interest rates at record lows and prices still very affordable.

If you would like a FREE consultation, please contact us. We would be honored to assist you in purchasing a home.

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Shoring up the FHA: Housing agency tightens underwriting policies

Thursday, February 25th, 2010

LAS VEGAS (MarketWatch) — The Federal Housing Administration said Wednesday that it would raise down-payment requirements, boost its mortgage-insurance premiums and tighten its loan underwriting practices in a bid to strengthen its capital reserves and remain solvent in the face of rising foreclosures and delinquencies.

FHA Commissioner David Stevens said the policy changes announced Wednesday were the latest in a series of measures the agency has taken since September to address increasing risk in the housing markets.

The measures announced Wednesday include the following:

  • An increase in the mortgage-insurance premium. The premium will rise to 2.25% of the loan amount, up from 1.75%. The FHA will seek legislative authority for the hike, which would apply both to the up-front and annual premiums it charges. The FHA does not make loans itself, but provides a government guarantee against default for mortgages issued by approved lenders. The mortgage premium is split between an up-front charge paid at closing and an ongoing annual fee. The new premium rate will go into effect in the spring.
  • A hike in FICO score requirements. New borrowers will now be required to have a minimum FICO credit score of 580 to qualify for FHA’s 3.5% down-payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%. This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
  • A reduction in allowable seller concessions from 6% to 3%. The current level exposes the FHA to excess risk by creating incentives to inflate appraised value, according to Stevens. This change will bring FHA into conformity with industry standards on seller concessions. This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
  • Increased enforcement on FHA lenders. The agency will publicly report lender-performance rankings to complement currently available Neighborhood Watch data, which will be available on the HUD Web site starting Feb.1. Stevens said this is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available. The agency will also enhance monitoring of lender performance and compliance with FHA guidelines and standards. The changes are effective immediately.
  • A series of proposed additions to FHA legislative authority that would further tighten reins on lenders.

In addition to the changes proposed Wednesday, Stevens said the FHA is continuing to review its overall response to housing-market conditions, as well as continuing to evaluate its mortgage-insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives.

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New FHA rules a mixed bag for condominums

Wednesday, December 16th, 2009

WEST PALM BEACH, Fla. – Dec. 9, 2009 – New guidelines from the Federal Housing Administration could increase sales in a stalled condo market, making it easier, at least temporarily, to get FHA-backed mortgages.

The guidelines, which went into effect Monday, were written to address current market conditions and the glut of empty condominiums following the real estate bust.

Several of the policies, however, expire in December 2010, leaving some real estate experts to call the changes a mixed bag that will ultimately restrict sales.

Others contend the modifications are overall good for a market suffering from a lack of condominium financing.

Changes include reducing the number of units in a new condominium that must be owner-occupied, allowing condo boards to refuse buyers as long as it doesn’t violate the Fair Housing Act, and cutting the expensive requirement of having an attorney certify condominium documents before a sale.

Most banks have shied from condo lending because the units are considered high risk. Those that still lend often want 20 to 30 percent down, a requirement that can eliminate the average buyer.

FHA-backed loans allow for smaller downpayments, but few condos are qualified for that kind of lending.

“Today, a new condo can be more affordable than paying rent, but people can’t buy because they don’t have the downpayment,” said Sarah Mazor, broker at Mazor Realty in Boca Raton, which specializes in new condo sales. “It slows down the market and the people who suffer are the middle class.”

Two big barriers to FHA financing have been a requirement that 51 percent of a condominium be owner-occupied, and a rule banning loans to buildings with “right of first refusal.”

The new temporary guidelines allow for 50 percent of units to be owner-occupied and doesn’t count units that are bank-owned, rented out, or vacant.

Allowing condos with “right of first refusal” access to financing is a permanent change.

Vicki White-Sklark, a government loan specialist with Sun Trust Mortgage in Sunrise, said she’s concerned about how new guidelines that tighten the approval process will ultimately restrict the market.

One change is that no more than 15 percent of total units can be more than 30 days behind on condo association fees.

Also, while other states are now allowed to independently approve FHA mortgages, Florida is still required to have projects submit applications to the U.S. Department of Housing and Urban Development.

“Right now, it’s a moving target,” White-Sklark said, about the guidelines. “I fully expect this to evolve over the next year as they realize the impact it’s going to have on the market.”

Copyright © 2009 The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.

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FHA and USDA Financing

Wednesday, June 24th, 2009

FHA Loans:

FHA loans have been helping people become homeowners since 1934. How do they do it? The Federal Housing Administration (FHA) – which is part of HUD insures the loan, so the lender can offer a better deal.

- Here are some key features and benefits about this program:

Eligible with Fixed Rate Loan Programs (15, 20, 25 and 30yr Terms) AND 1YR, 3/1 & 5/1 ARM’s

1. Margin: 1YR – 2.25%, 3/1 and 5/1 – 1.75%; Caps: 1/5; Index: CMT

2. 1 Year ARM must qualify at 1% above the Note Rate

Maximum Financing up to 96.5% of the Appraised LTV

Minimum Down Payment Requirement = 3.5% and it can be Gifted from a Friend or Family Member

Maximum 6% Seller Contributions Allowed

Eligible for Primary Residences (1-4 Unit) Only

Purchases, Rate/Term and Cash-Out Refinance Transactions Eligible

All Purchase Transactions Minimum FICO = 620

Full Doc Option Only

Maximum Loan Amount for 1Unit = $353,750 (effective April 28, 2009 in Orange, Osceola and Lake Counties…let me know if you need limits for any other counties and/or units)

2Months PITI (Principle, Interest, Taxes and Insurance) Cash Reserves Required

No Minimum Contribution from the Borrower’s Own Funds Required

1.5-2% (Depending on Loan Approval) PMI Required Up Front which may be Financed into the Loan

Website for more info on specific State guidelines: http://www.hud.gov/buying/loans.cfm

USDA Rural Housing Loans:

The Guaranteed Rural Housing (GRH) Loan Program is a Government insured single-family home loan program for low-to-moderate income borrowers looking to purchase a home in a rural development area.  This program is an excellent option to offer borrowers who aren’t able to make a significant down payment on a home.  It is an affordable way to achieve the dream of home ownership.

- Here are some key features and benefits about this program:

Eligible with Fixed Rate Loan Programs Only (30yr Terms)

Maximum Financing up to 100% of the Appraised LTV

Maximum 6% Seller Contributions Allowed

Eligible for Primary Residences (1 Unit) Only

Purchases and Guaranteed Rural Housing Rate/Term Refinance Transactions Eligible

Full Doc Option Only

Maximum Loan Amount = $417,000

No Cash Reserves Required

No Minimum Contribution from the Borrower’s Own Funds Required

No PMI Required: UpFront USDA Guaranteed Fee of 2% can be Financed into the Loan Amount for Purchase Transactions and .5% for Rate/Term Refinances

- Check Eligibility for Income and Property First at http://eligibility.sc.egov.usda.gov

If you are interested in learning more about the different financing programs, please contact us and we can put you in contact with a local lender.

We look forward to helping you move on the path towards homeownership!

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101 Eola in Downtown Orlando is FHA Approved

Friday, May 1st, 2009

This week, 101 Eola Condominium announced they have received FHA approval.  This is the first new condo development in downtown Orlando to be on the FHA approved project list.

Obtaining financing has been difficult with the recent developments in the financial market.  The good news is things are improving and developments are working towards getting Fanny Mae and Freddy Mac approval with the recent changes to the guidelines.  Most of the product offered at 101Eola falls within the lending limits of FHA so buyers will have several floor plans to choose from. 

FHA Loans Can Help Put Your Goals Within Reach:

Accommodating – Flexible credit and income-qualifying guidelines

Flexible - Down payments as low as 3.5% and no mortgage payments held in reserve

Options  – Gift funds accepted for down payment

The developer has satisfied their loan obligations which means they have no liens, or pending mortgages in the building due to a equity capitalization by the master developer.  The only building to have done that in town.   What does that mean?  That means that the developer has the decision making ability to determine the sales price and in a much stronger position to negotiate the deal as the bank debt has been satisfied. 

To check out 101 Eola and other Downtown developments, please be sure to visit the new construction section of our website.

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FHA Financing

Wednesday, February 4th, 2009

Many of my customers are utilizing one of the best programs available to buyers at this moment: FHA Loans!
FHA Loans require ONLY a 3.5% down payment – so on a $150,000 home that is only $5,250. Combine this with the low interest rate and it is achievable – particularly for first time home buyers.  In many cases, you can negotiate with the Seller or Bank (if it is a bank owned) and ask for a contribution towards your closing costs (typically between 3 and 6% of the purchase price in many cases).
To qualify for FHA loans, borrowers must be able to document their incomes and assets and not have defaulted on student loans or other government-backed debt. They usually need credit scores of at least 580. Credit scores range from 300 to 850. Borrowers who don’t go the FHA route will face stricter credit requirements on conventional loans. The conventional loans depending on qualifications, typically require 5% or more.
It is a great time to contact us and we can put you in contact with a Mortgage Company that can help.

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