Fha Guidelines | NC FHA Expert

Calculating FHA Downpayment

January 30, 2012 by admin Leave a Comment

Be Careful I’ve been in this business for a while… my daughter would tell you I’m old as dirt… and for as long as I’ve been in this, we’ve had a complicated way of calculating FHA Downpayment.

FHA always used acquisition cost. How much were you putting into the total aquisition of the property… closing costs and downpayment combined.

With the new rule changes of January 1… we use a STRAIGHT UP number. The base loan will be a 96.5% of the sales price or appraised value – whichever is LESS. If you are working with a loan officer is is unfamiliar with FHA – you could find yourself at the closing table wishing you’d done a little more research. I just saw a deal where the loan officer quoted the wrong downpayment amount by $1200.

Do your research! Work with someone who KNOWS the guidelines! Call Steve Thorne 919-649-5058. We offer FHA loans, and we can do the FHA Affordable Program too, which offers expanded guidelines for folks who have not been in the “Credit” Market for very long. Perfect for those just getting out of college! Did you know you can purchase a home using FHA as the mortgage with your parents? Give us a call!

Filed Under: FHA Mortgage Loans Tagged With: fha downpayments, fha guidelines, kiddie condo, non occupying coborrower

FHA Guidelines About Using Rental Income in NC

December 8, 2010 by Eleanor Leave a Comment

If you are moving to North Carolina, and you are going to rent your current home, there are a couple of things you should know about qualifying for an FHA Mortgage Loan for your new house. If you qualify for both payments – then it’s a pretty easy deal. If you need to count some of the income from your current residence it gets a little more tricky.

FHA Guidelines state that the rental income can not be counted, unless we can prove that you have at least a 25% equity stake in the home you are going to rent out. Too many people are buying a new home, and simply walking away from the one they couldn’t sell.

There is an EXCEPTION however:

If the borrower is relocating with a new employer, or being transferred by the current employer to an area not within reasonable and locally recognized commuting distance…

AND a properly executed lease agreement (that is, a lease signed by the borrower and the lessee) of at least one year’s duration after the loan is closed, and we have a copy of a cancelled check for the security deposit, evidence of the first month’s rent

THEN we can count the rental income. ALL mortgage programs (not just FHA) only give you 75% of the rental income as credit… So, if you rent the property out for $1000 we will only be giving you $750 of income to use to qualify for your new home.

So let’s say that your “old” home has a TOTAL payment (taxes, ins, everything) of $1500. You are able to rent it for $1000. In this case, we would be counting $750 as a monthly debt for you.

If you are relocating, and getting a new job, please read these FHA Guidelines about documenting your income. If you have questions about purchasing a home in NC using FHA financing, please call Steve and Eleanor Thorne River Community Bank, NA, 919-649-5058.

Filed Under: FHA Mortgage Loans Tagged With: fha guidelines, fha guidelines rental ncome, fha home loans cary, FHA LOANS, fha loans cary, fha loans raleigh, FHA mortgage loan, fha mortgage loans, fha new job, FHA Programs, fha rental income

FHA Guidelines on New Jobs

June 28, 2010 by Eleanor Leave a Comment

Maybe you just graduated from College – or maybe you have been out of work and are so excited because you finally got a job! YEAH! You have a new job, and now you want to get a new house!

Well – go ahead and buy a house. If you are getting a FHA Mortgage Loan, you will need to have at least 30 days of paystubs before you can close. So if you have a change in employment of any kind… this applies. (read don’t change jobs while you are in process!)

For most loan programs, we just need ONE paysub, but for FHA we need a full 30 days of paystubs… this really doesn’t make sense sometimes. We have a customer that just graduated from Vet School, she’s worked as an Intern for 2 years (so it’s not like it’s her FIRST job)! She wanted to purchase her first home, and close for the tax credit.

Well, her new job doesn’t start until July 1st. If she could get a “non-revocable” contract, then I think the underwriter would have allowed it to close… but who is going to give someone a “non-revocable” contract!?!? I mean we didn’t just find this out, we knew it within 3 days of taking the loan application, but still, I’ll bet there ARE tons of people who are trying to close in time of the Tax Credit, and for some small little reason they can’t.

If you are ready to purchase a home in NC, and you are looking for a FHA loan – give us a call! We know the FHA guidelines, and if there’s a way to make your situation work, we’ll help you get closed!! Steve and Eleanor Thorne, River Community Bank, NA, 919-649-5058. We answer First Time Home Buyer Questions!

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FHA Compensating Factors

June 11, 2008 by Eleanor 5 Comments

FHA Loans FHA (and all government underwriting for that matter) is somewhat different from other, more automated systems of loan approval. On an FHA loan you can actually have a real person look at the loan and apply the golden rule – not just a bunch of meaningless stipulations. This is often the difference in making the dream of homeownership a reality… because not everybody has a perfect credit history, with a 20 year job, and 2.3 kids!

With FHA – there’s the magic of COMPENSATING FACTORS. Some of our favorites include:

1. Borrower has already demonstrated they can afford this house payment. No payment shock, or at least a payment shock of less than 10% is a great offsetting factor for slightly higher debt ratios or a job history that is not as solid as we’d like to see.

2. Borrower can afford to put 10% down. I’m not talking about a gift (which FHA allows) I’m talking about a good old fashioned asset, and a behavior to save.

3. Conservative use of credit. Does the borrower have a 3 year old car that’s paid off because they don’t like having payments? Do they pay their credit cards off every month?

4. The Borrower will have at least 3 months of PITI in reserves after closing on their Primary Residence. FHA does not require reserves to insure a primary residence (unlike Conventional loans) and this additional “padding” can be a great offsetting factor.

5. Borrower has potential salary increases that you are not counting in your Debt ratios… if the employer indicates that the borrower has a review and potential raise coming up in the next few months this is a great off-setting (or Compensating) factor. (It’s difficult to get an employer to put that in writing for obvious reasons.)

FHA requires that part time employment have a history of at least 12 months. Therefore if you have a part time job with 8 months of history (for instance) we could not use those in the debt ratios – but we could use that income as an offsetting factor for higher ratios. Rent from potential roommates, which would be logical income even with a lease agreement, is rarely considered in our experience. 8o(

If you have questions about purchasing a home in the Triangle - please call Steve and Eleanor Thorne at Corporate Investors Mortgage Group in Raleigh, NC 919-649-5058