2nd Sep, 2010

The Clear Facts on FHA Loans in Charlotte NC

The Clear Facts on FHA

What is FHA?

A federal agency within the Department of Housing and Urban Development (HUD) that provides mortgage insurance for residential mortgages and sets standards for construction and underwriting. The FHA does not lend money, nor does it plan or construct housing.

Customer Benefits:

  • 3.5% down payment; can use non-profit down payment assistance programs or gift funds- I am a CHFA lender and use them often for buyers who are in need of down payment assistance with FHA financing.
  • No income restrictions
  • Non-traditional credit profile
  • No pre-payment penalty
  • 600 minimum score requirement

Funding Fee:

  • Up front mortgage insurance premium (UFMIP): 1.75
    • Annual MI: .55% for 30 yr

Loan Limits:

  • $406,250 for Denver- Aurora area (this is the temporary loan limit)
  • For other areas refer to HUD website or ask me: www.hud.gov

Eligible Transactions:

  • Purchase
  • Full refinance (rate/term, cash out) or FHA streamline refinance

Eligible Borrowers:

  • U.S. Citizens, Permanent Resident Aliens, and Non-permanent resident aliens
  • Non-Occupant Co-Borrowers allowed

Eligible Products:

  • 15, 20-30-year fixed rate terms, 3/1, 5/1 ARMs


  • 1-4 unit, FHA approved condos, PUDs allowed (do not need to be FHA approved), Manufactured homes (meeting FHA’s property requirements)


  • Collections- case by case, buy may not be required to pay
  • Tax liens- must be paid unless on payment plan
  • Bankruptcy
    • Chapter 7: minimum 2 years from discharge- with exceptions
    • Chapter 13: payments made for 1 yr. & court approval for purchase
    • Foreclosure: 3 years

Wendy Richards
Keller Williams Realty

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