Sellens Real Estate Lending

FHA Lending Programs

FHA Financed HomeStandard FHA 203(b) Programs, available for both stick built and manufactured homes.

FHA has the lowest down payment of any of the preferred loan types.  3.5% down, plus closing costs.  The seller can pay closing costs and relatives can gift funds for the down payment.

FHA Repair and Purchase Program 203(k)

If you buy a “fixer” home, you can finance funds to do the repairs.

FHA interest rates are slightly lower than conventional loans. However with an FHA loan you will pay upfront mortgage insurance premium, which is financed, and in addition you pay an annual FHA premium, which is divided into the 12 monthly payments.

So between the two, if you can finance a property with 20% down or more, the conventional loan issue better choice, because with FHA, the mortgage insurance premium never drops off the loan. Even if your loan-to-value is less than 80%, you will still pay the monthly mortgage insurance premium until the loan is paid.

If you have a manufactured home, and you finance it with an FHA loan, which in itself is a wonderful thing, as the rules for manufactured housing have changed in the last 20 years, for the better, in addition to the regular appraisal, you will probably have to pay for an engineering certification, at a cost similar to the appraisal, where the engineer certifies that the house foundation is safe and complies with FHA requirements.

If your home is in a flood zone, and can obtain flood insurance, FHA will ensure your home.

Another advantage of FHA is they offer a streamlined loan program. Unlike any other conventional lender, you can refinance your existing FHA loan, with little or no costs to you. The new loan has to benefit you in a savings, and there is a test to meet for that.

However if you do have a manufactured home with an FHA loan, and you want to do an FHA Streamline, with some lenders, you will still have to get an appraisal.

 

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