Over the last few years mortgage programs have been deleted on a daily basis – but FHA Home Loans are getting new benefits and features that are “beefing up” their presence! Today, FHA Home Loans North Carolina are the “Loans of Choice” for most first time home buyers!
FHA is actually a Division of HUD, and it’s sole purpose to help Americans find affordable housing. the FHA Home Loan Program is really a default insurance service. FHA doesn’t actually make loans in North Carolina – but because they write the “foreclosure” insurance for banks, the guidelines and FHA Requirements they publish are the ones that we follow.
The FHA PMI insurance removes or minimizes the “default risk” banks face when buyers put down less than 20 percent, and get into a situation where they can’t make their payments.
Because of this – lenders are more willing to make FHA home loans in North Carolina at really low mortgage interest rates. FHA recently increased the loan limits for most of the country. In Cary, NC the maximum FHA loan is $295000. This will buy a home home of about $306,000!
FHA Loan Down Payment
The FHA Home Loan Down Payment requirement is only 3.5%. So on a First Time Home Buyer house of $175,000 the total down payment required would be $6,125. This money can be from a gift (or a combination of several gifts). If you qualify for the NCHFA First Time Home Buyer Grant program – then there’s 3% available for your down payment!
Because FHA Home Loan Guidelines will allow family members to help you buy a home, Single Parents looking for a home, also benefit from this program.
FHA Loan Credit Guidelines
If your credit is less than perfect, the FHA Home Loan Program is more tolerant than most Bank requirements and might be the right program. Fannie Mae and Freddie Mac recently changed their guidelines and folks with a score less than 680 will have a more difficult time purchasing a home! FHA home loans need a minimum score of at least 620.
FHA Home Loan underwriters do not generally require that all medical collections be paid off before closing – so if you have medical collections on your file – call us, and let us peek at your scores and see if this is something you need to pay off (or not!). If you’ve previously gone through a Bankruptcy, Short Sale or Foreclosure – FHA Home Loans offer the shortest waiting periods. After you’ve re-established your credit, a period of at least two years must have elapsed since the discharge date of the borrower and / or spouse’s Chapter 7 Bankruptcy. FHA Home Loan guidelines are clear that it’s the DISCHARGE date – not the filing date.
For Chapter 13 cases, and Short Sales being reported as a Foreclosure, then the FHA Home Loan guidelines require at least 36 months from the date of TRANSFER. This can really suck, because a Bank that is really backed up could take 6 months or more to transfer the title into their name. – which means the borrower is waiting almost four years!
If your credit scores are not quite to the 620 mark (640 for the best pricing), don’t give up! There’s plenty you can do to get a higher credit score! Additionally, FHA Home Loans will work for non-occupying Co-Borrowers, so adding someone to the loan to make it work is a great option. We do this pretty often when one person has good credit and the other person has the income.
First Time Home Buyers
If you qualify for NCHFA, you might be able to get a Mortgage Tax Credit. The North Carolina Home Loan Mortgage Tax Credit gives those you have been renting for the last 3 years a credit of up to $2000 a year. They actually reduce the amount of taxes you pay each year with this MCC, and you bring home more money. It helps folks qualify for a little larger house.
FHA Loans are only for Owner Occupied Property. Maximum FHA Home Loan Limits vary per county in North Carolina – and they generally change each October. If you have more questions about FHA Home Loans North Carolina, contact Steve or Eleanor Thorne, Raleigh, NC, 919-649-5058