Jumbo FHA Loans No Longer Need 2nd Appraisal – Good For FHA Loan California is a post from: FHA,VA and Conventional Home Loans in all 50 States

Great news for home buyers in more expensive areas of California and the rest of the U.S. wanting to use a FHA loan to purchase their house.  FHA has now removed the requirement for two appraisals on ”high balance” FHA loans.  A high balance FHA loan is considered a loan over $417,000.  Currently, a borrower in many more expensive parts of the U.S. can go up to a maximum FHA loan of $729,750 on a FHA loan.   Previous to this change, a borrower would need to pay for two full separate appraisals on any FHA loans over $417,000.

This is a nice change as having to get two appraisals added to expense and made purchases with FHA jumbo loans much more complicated and drawn out.   This rule also includes FHA rate/term and cash out refinances.  You can get a cash out refinance on a FHA loan up to $729,750 and only one appraisal will be required. 

With an FHA loan limits in the more expensive counties of the U.S. and California being $729,750, this means you could purchase a home for $756,217 and only put the FHA minimum down of 3.5%.  This will be handy in 2010 as many of the coastal properties in Los Angeles, San Diego, Orange County, San Jose and other areas are coming down to fit into this price range.  Deals can be had.  Additionally, if you have not owned in three years you are likely eligible for the $8,000 home buyer tax credit if you go into contract on a house by April 2010, or also the $6,500 tax credit if you own currently and will be moving to a new primary residence.

And here are some highlights to FHA loans:

• More flexible qualification with FHA loans vs conventional loans
• FHA loan interest rates are still extremely low
• Maximum FHA loan $729,750 in many areas of California and the U.S.
• Only 3.5% down payment required and that 3.5% can even be a gift from a relative
• Non-occupying co-signers are allowed to help your qualify
• FHA loans are for everyone not just first time home buyers!
• You can have up to 9 other mortgage loans and still get a 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

homeloan8@gmail.com

You Don’t Have to Be a U.S. Citizen To Apply For a FHA Loan is a post from: FHA,VA and Conventional Home Loans in all 50 States

What many people don’t realize is that you don’t have to be a U.S. citizen to apply for an FHA Loan and be approved.  The following resident aliens are eligible for FHA Loans:

1. Permanent Resident Alien – you will only have to document your permanent residency (front and back copy of card) and provide a copy of your social security card.
2. Non-Permanent Resident Alien – you will only need to provide copy of valid social security card evidence you are able to work in the United States

So if you are working in the United Stated legally, you can take advantage of the wonderful FHA financing program to buy a home.  Here are some highlights of the FHA Loan:

• Minimum down payment is 3.5% and that 3.5% can be a gift from a relative
• Non occupying co-borrowers allowed to asset in qualification
• You don’t need perfect credit, so if you think you have bad credit you may still be eligible for a FHA Loan
• 50 year low 30 year fixed interest rates
• FHA 203k Loan provides money to fix up the house you buy
• 3.5% down on owner-occupied duplex, triplex and fourplex
• Condo’s and manufactured homes OK
• FHA is NOT just for first time home buyers!  You can own other homes.

Give me a call at 858-922-7899 or email at 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

Update on The $8,000 Home Buyer Tax Credit – Great Chance to Get an FHA Loan to Buy a Home is a post from: FHA,VA and Conventional Home Loans in all 50 States

I’d like to correct one of my earlier posts with more details emerging about the home buyer tax credit.  Details are below.   There are two new huge improvements to the credit I’d like to point out.   First, the income cap for all new home buyers qualifying has been raised for $125,000 for individuals and $225,000 for couples, where previously it was $75,000/$150,000.  This will include a LOT more buyers.  And second, move up buyers who have lived in their house five years qualify for a $6,500 tax credit.  Both of these changes make the tax credit available to tens of thousands of new buyers. 

Here’s a summary of the changes for the extended tax credit:

• Income caps for eligibility increases to $125,000 for individuals and $225,000 for couples.
• The tax credit for first-time home buyers (anyone who has not owned in the last 3 years) stays the same as the lesser of $8,000 or 10% of the purchase price.
• Eligible move-up buyers will have had to have lived in their current home for at least five years and the credit will be $6,500.
• The credit runs from Dec. 1, 2009 to April 30, 2010, with an additional 60 day period to close escrow, so you will have to go into contract by April 30th buy can close up to June 30th.

So getting an $8,000 check if you buy before April 30th is a pretty huge motivator.  It’s pretty generous.  FHA Loans only require 3.5% down, so in many cases you could replenish all of your down payment a few weeks after close when you recieve the tax credit.  Or you could use the $8,000 to furnish or upgrade the property.  Pretty amazing stuff!

Give me a call or email 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

Home Buyer Tax Credit to be Extended and Eligibility Expanded – Great News For FHA Loan Home Buyers is a post from: FHA,VA and Conventional Home Loans in all 50 States

The official announcement has not come, but word is that that home buyer tax credit will be extended to April 10th 2010 and expanded to include some move-up home buyers.  The tax credit is one of those “once in a life time” type of windfalls that is an unparalelled benefit for those buying a house.   In short, once you close on a house and you qualify, in weeks you will get a check for up to $7,290 in a refund for federal taxes that you paid.  That is an absolutely insane gift, has never been seen before and may never again.  So it is worth it to try and tax advantage of this tax credit and buy a home by April 10th 2010.  And using a 3.5% down FHA loan to purchase the house is a great way to do this. 

Some highlights of the tax credit below:

And remember, FHA loans are not just for first time homebuyers.  They are available to ANYONE who buys  a primary residence.  So “move-up” buyers who want to take advantage of the tax credit can also use a FHA loan to finance their new home.

Please give me a call at 858-922-7899 if you have any questions about applying for a FHA loan or don’t hesitate to email me at homeloan8@gmail.com.

Warm Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA loan specialist)

858-922-7899

homeloan8@gmail.com

Decent Chance Home Buyer Tax Credit Will Be Extended – Great for FHA First-Time Home Buyers is a post from: FHA,VA and Conventional Home Loans in all 50 States

The extension of the $8,000 home buyer tax credit is a key provision being considered by Congress this fall.  On October 5^th, the White House came close to endorsing the extension when the White House Press Secretary said it had been successful and is being considered again to support the economic recovery.  I believe the odds of the tax credit being extended are pretty good.  However, I do think it is much less likely that the credit would be increased above $8,000 or expanded beyond first-time homebuyers.

It is still up in the air if the tax credit is extended, when it will be actually enacted.  Tax bills usually move at the end of the year.   Unless the tax credit provision is moved in a “stand alone” bill or attached to an existing bill, it could mean there will be a lapse in availability in early December.  But if the extension is enacted, there could be a good chance it would be retroactively applied back to December 1st 2009.

The tax credit has been quite a bonus for first time home buyers, many of whom are using FHA Loans with 3.5% down to buy their first house.  It’s very advantageous to buy your first home, and then a few weeks later receive $8,000 to replenish your down payment or FHA closing costs, or help you with repair costs or remodeling costs of your new home.      

As a reminder, here are some of the highlights of FHA Home Loans:

• Only 3.5% down and that 3.5% can be a gift from a relative
• You don’t need perfect credit, if you think you have bad credit, you may still qualify for a FHA Loan
• FHA 203k home improvement loan is available for property fix up
• Seller can credit you for up to 6% in FHA Loan closing costs
• Flexible qualifying guidelines
• Non occupant co-borrowers OK
• 50 year low 30 year fixed rates
• 3.5% down available on 2-4 unit owner-occupied properties

So if you have any questions or you would like to apply for a FHA Loan, don’t hesitate to call at 858-922-7899 or email at homeloan8@gmail.com

Warm Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

858-922-7899

homeloan8@gmail.com

$8000 Tax Credit and FHA Financing is a post from: FHA,VA and Conventional Home Loans in all 50 States

PRESIDENTIAL TAX CREDIT

FOR FIRST-TIME HOME BUYERS IN 2009

Buyers using FHA financing are eligible for the TAX Credit!

This Credit runs out Dec 1, unless the credit is extended!

WASHINGTON — In 2008, Congress enacted a $7500 tax credit designed to be an incentive for first-time homebuyers to purchase a home. The credit was designed as a mechanism to decrease the over-supply of homes for sale. For 2009, Congress has increased the credit to $8000 and made several additional improvements. This revised $8000 tax credit applies to purchases on or after January 1, 2009 and before December 1, 2009.

1. What’s this new homebuyer tax incentive for 2009? Any home that is purchased for $80,000 or more qualifies for the full $8000 amount. If the house costs less than $80,000, the credit will be 10% of the cost. Thus, if an individual purchased a home for $75,000, the credit would be $7500. It is available for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.

2. Who is eligible? Only first-time homebuyers are eligible. A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase. This is based on the exact day of sale of the prior home and not the calendar year.

You are not eligible if any of the following: 1. Your income exceeds the phase-out range. This means joint filers with Modified Adjusted Gross Income (MAGI) of $170,000 and above and other taxpayers (such as single) with MAGI of $95,000 and above. 2. You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild and corporations or partnerships in which you own either directly or indirectly more than 50% interest. 3. You stop using your home as your main home.4. You sell your home before the end of three years. 5. You are a nonresident alien. 6. Your home is outside the United States 8.You acquire the home by gift or inheritance.

3. How does a tax credit work? Tax credits are better than Tax deductions. Every dollar of a tax credit reduces income taxes by a dollar. A tax deduction reduces the amount of taxable income that is subject to taxation. Credits and deductions are both claimed on an individual’s income tax return. To be clear, this incentive is a tax credit and not tax deduction. Thus, a qualified purchaser would figure out all the income items and exemptions and make all the calculations required to figure out his/her total tax due. Then, once the total tax owed has been computed, tax credits are applied to reduce the total tax bill. So, if before taking any credits on a tax return a person has total tax liability of $9500, an $8000 credit would wipe out all but $1500 of the tax due. ($9,500 – $8000 = $1500)

4. So what happens if the purchaser is eligible for an $8000 credit but their entire income tax liability for the year is only $6000? This tax credit is what’s called “refundable” credit. Thus, if the eligible purchaser’s total tax liability was $6000, the IRS would send the purchaser a check for $2000. The refundable amount is the difference between $8000 credit amount and the amount of tax liability. ($8000 – $6000 = $2000) Most taxpayers determine their tax liability by referring to tables that the IRS prepares each year. So even if you owe no tax whatsoever, the IRS would send the home buyer a check.

5. How does withholding affect my tax credit and my refund? There are several steps in this calculation, but most income tax software programs are equipped to make that determination.

6. Is there an income restriction? Yes. The income restriction is based on the tax filing status the purchaser claims when filing his/her income tax return. Individuals filing Form 1040 as Single (or Head of Household) are eligible for the credit if their income is no more than $75,000. Married couples who file a Joint return may have income of no more than $150,000.

7. How is my “income” determined? For most individuals, income is defined and calculated in the same manner as their Adjusted Gross Income (AGI) on their 1040 income tax return. AGI includes items like wages, salaries, interest and dividends, pension and retirement earnings, rental income and a host of other elements. AGI is the final number that appears on the bottom line of the front page of an IRS Form 1040.

8. What if I worked abroad for part of the year? Some individuals have earned income and/or receive housing allowances while working outside the US. Their income will be adjusted to reflect those items to measure Modified Adjusted Gross Income (MAGI). Their eligibility for the credit will be based on their MAGI.

9. Do individuals with incomes higher than the $75,000 or $150,000 limits lose all the benefit of the credit? Not always. The credit phases-out between $75,000 – $95,000 for singles and $150,000 – $170,000 for married filing joint. The closer a buyer comes to the maximum phase-out amount, the smaller the credit will be. The law provides a formula to gradually withdraw the credit. Thus, the credit will disappear after an individual’s income reaches $95,000 (single return) or $170,000 (joint return).

For example, if a married couple had income of $165,000, their credit would be reduced by 75% as shown:

Couple’s income $165,000

Income limit 150,000

Excess income $15,000

The excess income amount ($15,000 in this example) is used to form a fraction. The numerator of the fraction is the excess income amount ($15,000). The denominator is $20,000 (specified by the statute.

In this example, the disallowed portion of the credit is 75% of $8000, or $6000

($15,000/$20,000 = 75% x $8000 = $6000)

Stated another way, only 25% of the credit amount would be allowed.

In this example, the allowable credit would be $2000 (25% x $8000 = $2000)

10. What’s the definition of “principal residence?” Generally, a principal residence is the home where an individual spends most of his/her time (generally defined as more than 50%). It is also defined as “owner-occupied” housing. The term includes single-family detached housing, condos or co-ops, townhouses, house trailer, cooperative apartment or any similar type of new or existing dwelling. Even some houseboats or manufactured homes count as principal residences.

11. Are there restrictions on the location of the property? Yes. The home must be located in the United States. Property located outside the US is not eligible for the credit.

12. Are there restrictions related to the financing for the mortgage on the property? In 2009, most financing arrangements are acceptable and will not affect eligibility for the credit. Congress eliminated the financing restriction that applied in 2008. (In 2008, purchasers were ineligible for the $7500 credit if the financing was obtained by means of mortgage revenue bonds.) Now, mortgage-revenue bond financing will not disqualify an otherwise-eligible purchaser. (Mortgage revenue bonds are tax-exempt bonds issued by a state housing agency. Proceeds from the bonds must be used for below market loans to qualified buyers.)

13. Do I have to repay the 2009 tax credit? NO. There is no repayment for 2009 tax credits.

14. Do 2008 purchasers still have to repay their tax credit? YES. The $7500 credit in 2008 was more like an interest-free loan. All eligible purchasers who claimed the 2008 credit will still be required to repay it over 15 years, starting with their 2010 tax return.

15. How do I apply for the credit? There is no pre-purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form 5405 that will be attached to the 1040. Form 5405 and instructions can be found at the IRS site at:

http://www.irs.gov/pub/irs-pdf/f5405.pdf

16. So I can’t use the credit amount as part of my down payment? No. Congress tried hard to devise a mechanism that would make the funds available for closing costs, but found that pre-funding would require cumbersome processes that would, in effect, bring the IRS into the purchase and settlement phase of the transaction.

17. So there’s no way to get any cash flow benefits before I file my tax return? Yes, there is. Any first-time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments. Individuals subject to income tax withholding would get an IRS Form W-4 from their employer, follow the instructions on the schedules provided and give the completed Form W-4 back to the employer. In many cases their withholding would decrease and their take-home pay would increase. Those who make estimated tax payments would make similar adjustments.

18. What if I purchase later this year but can’t get to settlement before December 1? The credit is available for purchases before December 1, 2009. A home is considered as “purchased” when all events have occurred that transfer the title from the seller to the new purchaser. Thus, closings must occur before December 1, 2009 for purchases to be eligible for the credit.

19. I haven’t even filed my 2008 tax return yet. If I buy in 2009, do I have to wait until next year to get the benefit of the credit? You’ll have a helpful choice that might speed up the process. Eligible homebuyers who make their purchase between January 1, 2009 and December 1, 2009 can treat the purchase as if it had occurred on December 31, 2008. Thus, they can claim the credit on their 2008 tax return that is due on April 15, 2009. They actually have three filing options.

(1) If they purchase between January 1, 2009 and April 15, 2009, they can claim the $8000 credit on the 2008 return due on April 15.

(2) They can extend their 2008 income-tax filing until as late as October 15, 2009.

(The IRS grants automatic extensions, but the taxpayer must file for the extension.

See www.irs.gov for instructions on how to obtain an extension.)

(3) If they have filed their 2008 return before they purchase the home, they may file an amended 2008 tax return on Form 1040X. (Form 1040X is available at www.irs.gov)

Of course, 2009 purchasers will always have the option of claiming the credit for the 2009 purchase on their 2009 return. Their 2009 tax return is due on April 15, 2010.

20. I purchased my home in early 2009 before the stimulus bill was enacted. I claimed a $7500 tax credit on my 2008 return as prior law had permitted. Am I restricted to just a $7500 credit? No, you would qualify for the $8000 credit. Eligible purchasers who have already claimed the $7500 credit on a 2008 return for a 2009 purchase may file an amended return (IRS Form 1040X) for the 2008 tax year. This amended return will enable them to obtain the additional $500 credit amount.

21. If I claim my 2009 $8000 credit on my 2008 tax return, will I have to repay the credit just as the 2008 credits are repaid? No. Congress anticipated this confusion and has made specific provision so that there would be no repayment of 2009 credits that are claimed on 2008 returns.

22. I made an eligible purchase of a principal residence in May 2008 and claimed the $7500 credit on my 2008 tax return. My brother, who has never owned a home, wishes to purchase a partial interest in the home this spring and move in. Will he qualify for the $8000 credit, as well? No. Any purchase of a principal residence (or interest in a principal residence) from a related party such as a sibling, parent, grandparent, aunt or uncle is ineligible for the tax credit. Since you and your brother are related in this way, he cannot qualify for the credit on any portion of the home that he purchases from you, even if he is a first-time homebuyer.

23. I live in the District of Columbia. If I qualify as a first-time homebuyer, can I use both the $5000 DC credit and the $8000 credit? No, double dipping is not allowed. You would be eligible for only the $8000 credit. This will be an advantage because of the higher credit amount, plus the eligibility requirements for the $8000 credit are somewhat more easily satisfied than the DC credit.

24. I know there is no repayment requirement for the $8000 credit. Will I ever have to repay any of the credit back to the government? One situation does require a recapture payment back to the government. If you claim the credit but then sell the property within 3 years of the date of purchase, you are required to pay back the full amount of any credit, including any refund you received from it. A few exceptions apply. Note that this same 3-year recapture rule applies, as well, to the $7500 credit available for 2008. This provision is designed as an anti-flipping rule.

25. What if I die or get divorced or my property is ruined in a natural disaster within the 3 years? The repayment rules are eased for many circumstances. If the homeowner who used the credit dies within the first three years of ownership, there is no recapture. Special rules make adjustments for people who sell homes as part of a divorce settlement, as well. Similarly, adjustments are made in the case of a home that is part of an involuntary conversion (property is destroyed in a natural disaster or subject to condemnation by eminent domain by an authorized agency) within the first three years

26. I have a home under construction. Am I eligible for the credit? Yes, so long as you actually occupy the home before December 1, 2009.

27. For the purpose of calculating the credit amount, what is considered the purchase price? The purchase price is the adjusted basis of your home on the date you purchased it. This includes certain settlement or closing costs (such as legal fees and recording fees) and your down payment and debt (such as a first or second mortgage or notes you gave to the seller in payment for the home). If you build, or contract to build, a new home, your purchase price can include costs of construction.

WITHHOLDING EXAMPLES:

Situation 1: Phyllis plans her withholding so that her withholding is as close as possible to what she anticipates as her income tax liability for the year. When she fills out her 1040, her liability is $6000. She has had $6000 withheld from her paycheck. She also qualifies for the $8000 homebuyer credit.

Result: Phyllis’ withholding satisfies her tax liability and reduces it to zero. She will receive a refund of the full $8000.

Situation 2: Nick and Nora file a joint return. Nick is self-employed and makes estimated payments; Nora has taxes withheld from her salary. When they compute their taxes, their combined withholding and estimated tax payments are $11,000. Their income tax liability is $9800. They also qualified as first-time homebuyers and are eligible for the $8000 refundable tax credit.

Result: Ordinarily, their combined estimated tax payments and withholding would make them eligible for a refund of $1200 ($11,000 – $9800 = $1200). Because they are eligible for the refundable tax credit as well, they will receive a refund of $9200 ($1200 income tax refund + $8000 refundable tax credit = $9200).

Situation 3: Cesar and Maria both have income taxes withheld from their salaries and file a joint return. When they file their income tax return, their combined withholding is $5000. However, their total tax liability is $7200, generating an additional income tax liability of $2200 ($7200 – $5000). They also qualify for the $8000 first-time homebuyer tax credit.

Result: Cesar and Maria have been under-withheld by $2200. Ordinarily, they would be required to pay the additional $2200 they owe (plus any applicable interest and penalties). Because they are eligible for the refundable homebuyer tax credit, the credit will cover the $2200 additional liability. In addition, they will receive an income tax refund of $5800 ($8000 – $2200 = $5800). If they owed penalties and/or interest, that amount would reduce the refund.

(This is information is accurate to the best of our research and interpretation based on information available as of February 25, 2009. As with any tax law change, check with a tax advisor if there are any questions regarding using this provision)

Success Strategies To Maximize the Benefit With the First-Time Homebuyers Credit

Success Strategy #1: Modify Withholding at Work. Any first-time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments. Individuals subject to income tax withholding would get an IRS Form W-4 from their employer, follow the instructions on the schedules provided and give the completed Form W-4 back to the employer. In many cases their withholding would decrease and their take-home pay would increase.

Those who make estimated tax payments would make similar adjustments.

Success Strategy #2: File An Amended 2008 Tax Return. Eligible homebuyers who make their purchase between January 1, 2009 and December 1, 2009 can treat the purchase as if it had occurred on December 31, 2008. Thus, they can claim the credit on their 2008 tax return that is due on April 15, 2009 or file an amended 2008 Tax Return.

Success Strategy #3: Create a Short Term Note When Buying. When negotiating the purchase, ask the seller to create a short term seller financed note to be repaid when the refund from the tax credit is paid to the new homebuyer. Or just borrow the anticipated Tax Credit amount from a third party or loan company.

Download from IRS FORM 5404 Site http://www.irs.gov/pub/irs-pdf/f5405.pdf

FHA Loans Are For Everyone – Anyone Can Apply For An FHA Loan is a post from: FHA,VA and Conventional Home Loans in all 50 States

There are a lot of misconceptions about FHA Loans.  #1 is that many people think FHA Loans are only for first time home buyers.  This is not true.  You absolutely do not have to be a first time home buyer to be approved for an FHA Loan.  In fact you can own multiple other properties and get an FHA Loan.  Now it is true that you can only have one FHA Loan at a time and FHA Loans are only for primary residences.  You cannot get a FHA Loan on an investment property or a second home.

Here are some other myths about FHA Loans that are not true and general highlights about FHA Loans:

• FHA Loans have as good or sometimes better interest rates than conventional loans
• FHA loans are generally more flexible with borrowers with credit challenges or bad or poor credit
• FHA has a great program to fixer upper houses call the FHA 203k loan where you will get the funds to purchase and fix the house all in one loan
• FHA Loans are not just for smaller loan amounts, you can get an FHA Loan all the way up to $729,750 for a condo or single-family home, $934,200 for a 2 unit, $1,129,250 for a 3 unit and $1,403,400 for a 4 unit.  Loan amounts vary per county, so call me to check on your county limit
• FHA Loans work for owner-occupied 2-4 unit properties
• FHA Loans allow a gift for 100% of the down payment
• FHA Loans allow non-occupant co-borrowers to assist in qualifying

Please give me a call at 858-922-7899 or email at homeloan8@gmail.com if you have any questions or would like to get pre-approved for a FHA Loan.

Warm Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

858-922-7899

rob@affinity-financial.com 

Top Myths About FHA Government Home Loans is a post from: FHA,VA and Conventional Home Loans in all 50 States

There are a lot of myths out there about FHA Home Loans out there that are NOT correct.  A lot of these myths are put out there by Realtors representing sellers (especially on banked owner REO’s) who really don’t understand FHA Loans.

Myth #1 FHA Loans Are Only for First Time Home Buyers:

Anyone can get a FHA Loan; you do NOT have to be a first time home buyer.  But you can only have one FHA Loan at a time and you can only get an FHA Loan on a primary residence.

Myth #2 FHA Loans take more time processing:

FHA Loans do NOT take any more time to process than a conventional loan.   There is nothing about them that would take them any more time to process than a conventional loan.   You can close on your new house with a FHA Loan just as fast as or faster than if you were to get a conventional loan.

Myth #3 More paperwork is required

There is no more paperwork involved in a FHA Loan then a conventional loan.  Both will require standard income, asset, property and credit documentation.

Myth #4 Interest Rates are Higher on FHA Loans

Interest rates on 30 year fixed FHA Loans are just as competitive as conventional loans, if not sometimes better.  In fact FHA does not penalize borrowers for lower credit scores as much as conventional loans do.

Myth #5  FHA Loans Are Too Restrictive

The opposite is actually true!  FHA Loans have more flexible credit and asset guidelines then conventional loans, (especially when a borrower is putting less than 20% down on a conventional loan).  Also, FHA Loans also still allow the mortgage company to choose the appraiser.  This means you are more likely to get an appraisal done by a local professional vs. conventional loans that require appraisals through the HVCC process which often assigns inexperienced out-of-area appraisers working for low wages.

Myth #6  FHA Loans Require Termite Clearance Reports

If the buyer does not ask for a pest inspection in the purchase contract, they will not be required to get a clearance for a FHA loan. 

Myth #7  FHA Loans Have Low Limits on Maximum Loan Amounts

You can get an FHA Loan all the way up to $729,750 in many areas of the county.  This is the same as the upper limit for conventional loans.

So there you have it.  Seven Myths about FHA Loans that are not true!  Please don’t hesitate to call if you have any questions.

Warm Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

rob@affinity-financial.com

858-922-7899 (direct)

U.S. FHA to apply $8,000 credit to home buying costs is a post from: FHA,VA and Conventional Home Loans in all 50 States

WASHINGTON (Reuters) – The Federal Housing Administration will allow the new $8,000 first-time homebuyer tax credit to be applied directly toward home purchase costs when using an FHA-insured mortgage, the Department of Housing and Urban Development said on Friday.

The plan to "monetize" the tax credit up-front is aimed at more quickly stabilizing the housing market, HUD Secretary Shaun Donovan said in a statement.

But in detailed rules, the FHA will still require home buyers to provide a minimum 3.5 percent downpayment from other sources.

Get Started Click HERE

The $8,000 tax credit for first-time home buyers was created as a part of the Obama administration’s $787 billion stimulus plan. Some private lenders already were allowing buyers to apply the credits directly toward purchase costs through special financing schemes.

With the FHA following in a similar vein, a significant portion of the first-time homebuyer market will have up-front access to the credits instead of waiting until tax returns are filed.

"What we’re doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing," Donovan said in a statement

FHA-insured loans, which largely have replaced the subprime mortgage market, now accounts for about 25 percent of new mortgages, senior HUD officials said, versus about 2 percent of the market two years ago. At this pace, the agency will insure some 2.2 million mortgages this year.

The National Association of Home Builders estimates that the $8,000 first-time homebuyer credit will stimulate 160,000 home sales across the United States — 101,000 purchases from first-time buyers and another 59,000 purchases by existing homeowners who sold dwellings to first-time buyers.