by Rob on January 14, 2010
Below are the maximum FHA loan amounts for the larger cities in California. These are the highest loan amounts you could go to in purchasing a home with a FHA loan in California. 1 unit refers to a condo or single-family home, 2 unit refers to a duplex, 3 unit a triplex and 4 unit a fourplex.
- FHA loan San Francisco: 1 unit $729,750, 2 units $934,200, 3 units $1,129,250, 4 units $1,403,400
- FHA loan San Jose, Oakland, Fremont, Hayward: 1 unit $729,750, 2 units $934,200, 3 units $1,129,250, 4 units $1,403,400
- FHA loan Los Angeles: 1 unit $729,750, 2 units $934,200, 3 units $1,129,250, 4 units $1,403,400
- FHA loan Sacramento: 1 unit $580,000, 2 units $742,500, 3 units $897,500, 4 units $1,115,400
- FHA loan Santa Ana, Irvine, (Orange County): 1 unit $729,750, 2 units $934,200, 3 units $1,129,250, 4 units $1,403,400
- FHA loan Riverside, San Bernardino, Ontario: 1 unit $500,000, 2 units $640,100, 3 units $773,700, 4 units $961,550
- FHA loan San Diego:1 unit $697,500, 2 units $892,950, 3 units $1,079,350, 4 units $1,341,350
- FHA loan Fresno: 1 unit $381,250, 2 units $488,050, 3 units $589,950, 4 units $733,150
- FHA loan Santa Barbara: 1 unit $729,750, 2 units $934,200, 3 units $1,129,250, 4 units $1,403,400
- FHA loan Santa Cruz, Watsonville: 1 unit $729,750, 2 units $934,200, 3 units $1,129,250, 4 units $1,403,400
- FHA loan Redding: 1 unit $423,750, 2 units $542,450, 3 units $655,700, 4 units $814,900
- FHA loan Vallejo, Fairfield: 1 unit $557,500, 2 units $713,700, 3 units $862,700, 4 units $1,072,150
- FHA loan Santa Rosa: 1 unit $662,500, 2 units $848,100, 3 units $1,025,200, 4 units $1,274,050
So those are the maximum FHA loan for various cities in California. If you don’t live in one of these area and would like to know the FHA max loan for your area, just give me a call or email. Remember if you buy a 2, 3 or 4 unit property and occupy one of the units as your primary residence, you can use the rental income from the other units you don’t occupy as income to qualify.
And here are some highlights to remember about FHA loans:
- To get a FHA loan credit score does not have to be perfect
- FHA loan interest rates are at historic lows
- You can use gift funds for FHA loan down payment
- Maximum FHA loan is $729,750, so you can get a FHA loan in expensive parts of California like Los Angeles, San Jose, San Francisco and San Diego
- Debt-to-income ratios on FHA loans are allowed up to 55% where conventional loans require 41% with less than 20% down
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA Loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899
homeloan8@gmail.com
by Rob on January 4, 2010
Many economists and prognosticators in the business world are predicting that FHA loan interest rates, as well as conventional loan (and all mortgage interest rates) could rise in 2010. Prognosticators have been wrong so many times at predicting the direction of interest rates so you have to take what they say with a grain of salt.
Most of the people in the business world predicting a rise of rates in 2010 are basing their argument that the Federal Reserve is going to stop purchasing Mortgage Backed Securities in March 2010. The Fed has been buying billions in MBS over the last year in an effort to stimulate the U.S. economy. The general thinking is the Fed has been artificially holding down 30 year fixed interest rates to artificially low levels around 5% and below 5% the past year. If the private market has to step in and buy MBS after March 2010, many believe rates will have to rise in order to attract these investors. How high they will need to rise is anyone’s guess. Possibly to 5.5% or 6%, but no one really knows for sure. And it’s not a given they will rise at all. Depending on the direction of the economy, who knows the Fed could extend their buying program. Much depends on the direction of the economy. One thing is pretty much for sure though, if we get a lot of good news about the economy in 2010, the FHA loan interest rate on the 30 year fixed will rise. Because not only will the Fed stop it’s purchasing program, speculation will start rising that the Fed will raise interest rates to keep inflation in check. When the Fed raises the Federal Funds Rate, it generally causes 30 year fixed mortgage rates to rise.
Here are some payments on a $300,000 FHA loan with different interest rates:
4.75% rate $300,000 loan=$1,564/mo
5.25% rate $300,000 loan=$1,656/mo
5.5% rate $300,000 loan=$1,703/mo
6% rate $300,000 loan=$1,798/mo
And here are some highlights to remember about FHA loans:
- To get a FHA loan credit score does not have to be perfect
- FHA loan interest rates are at historic lows
- You can use gift funds for FHA loan down payment
- Maximum FHA loan is $729,750, so you can get a FHA loan in expensive parts of California like Los Angeles, San Jose, San Francisco and San Diego
- Debt-to-income ratios on FHA loans are allowed up to 55% where conventional loans require 41% with less than 20% down
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA Loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899
by Rob on December 28, 2009
For first time buyers or buyers in expensive areas like California that want to keep their housing payments down, buying a duplex with FHA financing is a really great way to go. Many times a home buyer can buy a duplex, and after collecting the rent from the other unit, their total housing payment is less than if they would have bought a condo and certainly less than if they purchased a single-family home. Additionally, if you want to eventually move out of the duplex to a single-family home, you can always keep the duplex as an excellent long term investment. Or if you stay, over time the rents will rise on the other you unit you rent where your housing payment will stay fixed, so over time the rent from the other unit may pay your total housing payment and you live for free! How is that for a retirement program!
FHA makes it very easy to qualify for a FHA loan on a duplex. It’s is really a fantastic niche because you can get the same great FHA financing you can get on a condo or single-family home on a duplex:
- FHA loan down payment only 3.5% on a duplex, and all of that can be a gift from a relative
- The same historic low FHA loan interest rates can be had on a duplex with 30 year fixed rate loans
- FHA allows you to count 90% of the rental income from the other unit to help you qualify FHA loan on a duplex. This extra income can help you qualify for a higher purchase price than a condo or single-family
- Maximum FHA loan in many parts of California for duplexes are higher than the maximum on condo’s or single-families…up to as high a $934,200 in many counties in California (and other states). This allows you to buy a duplex in the best parts of Los Angeles, San Diego, San Jose, San Francisco, etc…
- FHA loan credit scores do not have to be perfect to buy a duplex
- Conventional loan vs FHA with buying duplex…you probably need 10% down payment with conventional and the qualifying credit and debt ratios are much more strict
So if you are in the market to buy a property, think about buying a duplex.
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA Loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899
by Rob on December 23, 2009
FHA announced major changes in its condo guidelines this summer, there were some negative changes such as the elimination of the FHA spot condo approval, which allowed for a single unit approval even though the entire condo project was not approved. Although FHA has since extended spot condo approvals until Feb 2010. Approval of condo complexes not currently on the FHA approved condo list will now have to be getting the entire project approved by either the lender or FHA. The details on this process are still somewhat murky and not defined. But some good news from FHA is that “site” condos no longer have to be approved by FHA in order to qualify for a FHA loan.
Site Condos are basically like single family detached properties yet fall under a condo style of ownership. Condo Project approval is not required for Site Condominiums; however, the Condominium Rider must be included in the FHA case binder submitted for insurance endorsement.
Site condos on their own lots in developments that have condo ownership and may have some common care covenants. These condo’s can now be financed just like single family homes. They do not have any of the hassles associated with getting a FHA loan on a regular condo.
Regular condo’s that are not site condos and not on the FHA approved list have become very difficult to finance. Conventional loans with less than 20% down can often require 70% of the units in condo projects to be occupied by owners among other onerous requirements. Many of the condo’s being purchase in California are with 20% down or all cash, because they are not FHA approved and do not have the owner occupancy to qualify under the Mortgage Insurance guidelines for a less than 20% down conventional loan.
So in summary, make sure you check with me first if you are shopping for a condo in California. I can check to see if it is on the FHA list if you are going with a FHA loan, I can check the occupancy if you are going with a conventional loan and I can also tell you if it’s a “site” condo.
And here are some highlights to remember about FHA loans:
- To get a FHA loan credit score does not have to be perfect
- FHA loan interest rates are at historic lows
- You can use gift funds for FHA loan down payment
- Maximum FHA loan is $729,750, so you can get a FHA loan in expensive parts of California like Los Angeles, San Jose, San Francisco and San Diego
- Debt-to-income ratios on FHA loans are allowed up to 55% where conventional loans require 41% with less than 20% down
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA Loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899
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by Rob on December 21, 2009
Since the lending guidelines radically changed in 2008 it’s been more difficult for self-employed borrowers and independent contractors to get mortgage financing. Prior to 2008 many borrowers with this type of income would get “no doc” home loans where they would not have to fully document their loans. But in 2008 all the “no doc” loans went away and now self-employed borrowers, independent contractors and everyone not paid as a w-2 employee have to qualify based on their most recent two years of tax returns.
So to get FHA loan the first step will be to supply your last two years tax returns for qualification. So if you are going to be buying in 2010, you will need your 2008 and 2009 federal tax returns all pages, all schedules. If you file K1’s or corporate returns you will also need to send those returns in. For FHA loan approval for self-employed borrowers, the FHA underwriter will take the NET business income off your 2008 and 2009 federal tax returns and average the two years. So if your NET in 2008 was $80,000 and your NET in 2009 was $90,000, the FHA loan underwriter will use $85,000 as your qualifying income.
It is very important to realize that it is the NET income that will be used for FHA loan approval, not your gross income. Many self-employed people write off many expenses, so their gross may be high, but their NET may not be low. This can be a challenge for many. However, there are deductions that can be added back into your NET income to increase that figure. We are a specialist at knowing the FHA guidelines and we are able to have many deductions added back into NET income helping self-employed borrowers. Here is a list of deductions that can be added back to NET income:
- Business use of home
- Depreciation
- Loss carryover’s from previous years
- Mileage depreciation rate (40% of the total per mile auto expense rate)
- and more
Also, if you operate as a corporation and pay yourself W-2, we will still need to look at your last two year tax returns. If the corporation is showing a loss, that loss amount may have to be deducted from the W-2 income you pay yourself.
The best thing to do if you are self-employed and want to qualify for a FHA loan (or conventional loan) is to call me and send me your federal tax returns so I can go over them in detail and let you know how much income we will be able to count.
Here are some general highlights of FHA loans:
- Only 3.5% required for FHA loan down payment (vs. 10% down in most cases on conventional loans in California)
- Maximum FHA loan up to $729,750 in many counties of California and other expensive states
- FHA loan interest rates at historic lows (the U.S. Government is currently buying Mortgage backed securities at an unprecedented rate artificially holding down interest rates…this will not last that much longer)
- Seller can credit up to 6% of the purchase price for FHA loan closing costs
- FHA streamline refinance to lower rate options available once you have an FHA loan
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA Loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and FHA specialist)
858-922-7899
