FHA Loans in Wilmington NC

My family laughs when I say this, but I think I have saltwater in my veins. I love the beach… and I blame that on the fact that I was born in James Walker Hospital that was located on the Cape Fear River in downtown Wilmington.  Because we know tons of folks in that area, and we are members of the Hanover Seaside Club on Wrightsville… we get asked pretty often for information on FHA Loans in Wilmington NC, and about the Real Estate market there.

The housing market in Wilmington is coming back – and with that interest tons of people are buying homes in the Leland and Hampstead areas.  That’s great news!  However, the mortgage program many people used to buy houses in that are is the USDA Home Loan NC program that requires no down payment.  Unfortunately, USDA Loans in Wilmington became more difficult to qualify for in 2014.

With the difficulty of obtaining that program for many folks in Wilmington, people are going to be looking at the FHA loan program and the NC Affordable Housing Loan.  These programs can be used together, and offer First Time Homebuyers (and others) the most flexibility available.  FHA loans do not have Income Limits (like USDA Loans) however they do have maximum loan amounts set for each county.

The loan limits are subject to change at the beginning of each year. FHA PMI rates have recently gone down, and the flexibility offered by FHA with credit scores, gifts for down payment and the ability to do some “common sense” underwriting, make it a great program!

2018 FHA Loans for Wilmington, NC  / New Hanover County, NC

• One Family Dwelling:  $294,515
• Two Family Dwelling:  $377,075
• Three Family Dwelling:  $455,800

The maximum loan amount for a quadrapex (4 family dwelling) in New Hanover County is $566,425.  It is possible to buy a Quadraplex with FHA Loan financing.  READ:  You might be able to do this with as little as 3.5% down payment!

There are some restrictions, meaning not all of the rents collected will be counted to offset the debt in your debt to income ratios.  Currently, you will need to take the gross rents to be collected on the 3 rental units, and multiply that by 75%.  If your total mortgage payment for the 4 units will be more than the 75% gross rents, then we can’t count any of the rent for qualification purposes.

NC Affordable Housing Program benefits for Wilmington NC include below market mortgage interest rates, and the ability to qualify for a slightly larger home.  The NC Advantage program has a minimum credit score requirement of 640.   We can normally help folks meet that, with a combination of tools, including getting secured credit cards.

Another huge benefit of the program (which used with FHA) is that it also offers a 3% Grant** that can be “forgiven” and has no monthly payment requirements, and can be used for down payment or to cover closing costs.  With the changes with the NC First Time Home Buyer Program, it is now available for folks who are residents of NC and have been renting for the past 3 years.  An additional benefit to the Program is that there are no Maximum Sales Price limits for the First Time Home Buyer Program in Wilmington.

• 2018 NCHFA Income Limits for New Hanover County (how to calculate income)
  • Mortgage Advantage Grant / $87,500 APPLICANT income
  • Mortgage Credit Certificate (MCC) / Households of 3 or more $78,000 household income

In addition to offering First Time Home Buyer Grants using the FHA, home buyers can also utilize the Grant program to buy a house using a Conventional Loan.

**A Quick Note**

We refer to these programs as “mortgage grants” because there are no payments to be made, there is no interest charge, and there’s no expectation that you will have to repay ANY of the money you receive for down payment, unless you move out of the property or refinance prior to the dates assigned by your specific down payment assistance program.

The literal term for this down payment assistance program is a “forgivable loan.” Under the terms of the program that best suits you, a portion of this down payment assistance will be forgiven on a schedule that we will share with you when you make loan application. These funds are available to us through NC Housing (NCHFA) and are available through other lenders in the state as well. The interest rates for these programs, however, will not vary from lender to lender as that is set by NC Housing.

VIEW ALL FHA Underwriting Guidelines for Wilmongton NC

Q: Can I use a Co-Borrower To Buy a house in Wilmington with a FHA Mortgage?

A: FHA has a unique twist to its guidelines, that allows you to purchase a home, with a relative that does not live in the house… “The FHA Non-Occupying Co-Borrower Program”  is sometimes, referred to in the Mortgage Industry as a “Kiddie Condo,”  because frankly it’s perfect for purchasing a house for kids in college! In reality though – it’s not just for Condo purchases.

Instead of renting a dorm, many NC parents put the student on the mortgage loan and purchase a house, splitting the rent with others!  We also use this program for 55+ adults who having aging parents who can not, for whatever reason, qualify to purchase a home – and the child essentially helps the parent qualify for a mortgage loan, without having to treat the property as investment property. So the down payment is still only 3.5% with the FHA Loan program.

Q: What if I have good Credit but my partner has all of the Income?

A:  There are several options here.  See the part above about non-occupying co-borrowers? Get a family member to help!  Another option is to get the credit fixed.  If the borrower has a 583 credit score , and they’ve had 12 months of making all payments on time – the thing most likely keeping their scores down (barring bankruptcy, short sale or foreclosure) is the gap between the balance owed on credit cards and the high credit limit.  Taking the $4000 saved (in the example above) and paying down the balances MIGHT get the scores up 60 points or more immediately!  The other thing that can happen would be to either be added to a credit card with a low balance, and on time payments – or to open a Secured Credit Card (or two)

Looking for a home in the Wilmington / Topsail Beach area?  Call Steve and Eleanor Thorne 919 649 5058.  We do TONS of FHA loans in NC and we’d love to help you!  We also have some of  Today’s Best Mortgage Rates in Wilmington, NC!

REMEMBER that income amounts and loan limits vary by COUNTY – so this information on FHA Loans in Wilmington, NC is SPECIFIC to New Hanover – Brunswick County ( for instance) has different limits and loan amounts 🙂