New Qualifications For Buying a Home - FHA Loan Limits Revamped For 2009

New Qualifications For Buying a Home - FHA Loan Limits Revamped For 2009

When acting FHA Commissioner Carol Galante announced the price cuts this spring, she noted that nearly 3.5 million U.S. households with FHA loans taken out before 2009 pay more than 5 percent on their mortgage. Given that, officials estimate that doing ... FHA cuts prices to encourage more refinances

www.TheEquityFund.com FHA Guidelines, Rates, Requirements explained. Do you qualify for the lowest rates in 60 years? The answer may surprise you.

http://laregionperdida.com/ FHA Loan Requirements

One of the official duties of the new president was to ensure the FHA loan limits would change. With the fall of Fannie Mae and Freddie Mac it has been essential to try and re-stimulate the economy. The stimulus bill has allowed for Fannie Mae and Freddie Mac to guarantee loans at new limits. It has also changed how the FHA loan program works. Three things have recently changed regarding the FHA loan limits. The first is the loan amount which can be awarded to the borrower. The second change is to the FICO score, and lastly the down payment has been modified.

In 73 counties the Federal Housing Administration is allowing for mortgages of $ 729,000. There are also loans awarded for more than $ 271,050 in more than 600 counties around the United States. The new limits are being assessed state by state. While the limits mentioned here are the new limits, depending on the state you live in you might not find much has changed.

The new limit change occurred to help families in a high cost housing market. The higher cost housing market has been suffering because no one can afford the homes being sold under regular private mortgages.

The government and FHA felt the limits needed to be raised in order to get the economy back on track via these high cost markets. Among the changes to the limit totals is the loan to value. FHA loans through Freddie Mac and Fannie Mae can be 125 percent loan to value in the high cost markets to ensure a sale. This 125 percent loan to value is good for 2009, after which time the current market will be reassessed. Home buyers looking for an FHA loan will need to speak with the available lenders in their area to determine the loan limit they will be awarded.

The loan limit will then help the buyer find a home in their price range.

Added to the monetary limits which have changed on FHA loans are the FICO score changes. Prior to 2009 a borrower needed 580 for their FICO score. In April 2009 this changed to 620. The lenders negotiated with FHA to increase the score due to the risk they felt 580 posed.

The next option FHA modified was the down payment required. To obtain an FHA loan one needs to have at least a 5 percent down payment. Before 2009 the down payment required was 3 percent. The change is not too difficult given the various grant programs available. The down payment requirement is different than the 125 percent loan to value we spoke of above. The 125 loan to value is only available in certain areas, and within special circumstances. For a normal FHA loan 5 percent of the purchase price is needed. This provides a 95 percent loan to value for an FHA loan. Borrowers need to understand the FHA loan limits as well as the qualifications regarding the loans in order to apply successfully for the mortgage.

Recommend New Qualifications For Buying a Home - FHA Loan Limits Revamped For 2009 Issues

Question by Piper: real estate question about FHA loans, purchase agreements, and foreclosed properties HELP!!? I am trying to purchase a home and just ran into a BIG problem. The home is 7 years old and it is a foreclosed property valued on tax record at $ 240,000 but for whatever reason they were only asking $ 169,000. I offered them $ 115,000 and they accepted. The original purchase agreement was signed in early November 2009. I gave them the earnest money of $ 1000.00 and everything seemed normal. We then had to sign an amendment to the PA on 11-28-09 giving the seller/bank till Feb. 2010 to locate a POA (power of attorney) or I could back out after that if I choose to. They apparently located a POA and then we signed another agreement stating we would close on or before Jan. 15 2010. On the first purchase agreement my real estate agent had me sign at the time of the offer it said I would be going with an “in-house loan with a minimum of 5% down”. This was just him speculating given we didn’t know what direction we would go for sure at the time. I had a letter from my banker stating I was approved for financing just not what kind of financing and it gave no dollar amount but it satisfied as a pre-qualification letter. My banker doesn’t have a problem doing this because they are fully aware of my finances and know for a fact I will get approved. After they located the POA my banker and I started moving forward quickly. We decided that an FHA loan would work best given that rules for in-house loans had just changed and now required 20% down. I was approved for financing and the appraisal was scheduled. The seller/bank got word of this and decided not to accept an FHA loan as funding for the sale. They also refuse to extend the agreement to accommodate getting the in-house loan done. My theory is that maybe FHA has issues with “as-is” homes… the home has 2 cracked windows and the carpet isn’t great in a couple spots but acceptable…would that pose a problem that the seller may not want to deal with? Other than that it’s a brand new house. My second thought is that maybe throughout this process they have become more aware of the value of the house and want this to fall through so they can relist it and get more money for it. Should I hire an attorney to fight this??? Or am I just out of luck given the original agreement said I was going with an in-house loan? It does however say in the contract that: “buyer may obtain financing from the lender of buyers choice. Within 72 hrs of execution of this counterproposal by buyer, buyer will either apply for financing or provide evidence satisfactory to the seller that a lender has per approved the buyer for financing”…I did this by giving them the letter from my banker stating I was approved. The letter just didn’t say from what source or an amount but the seller did accepth this letter as proof like they asked. What do you think?? Do I have a shot at fighting this? I REALLY want this home. Thank you for reading all of this information. Best answer for real estate question about FHA loans, purchase agreements, and foreclosed properties HELP!!?:

Answer by loanmasterone
The seller does not want to pay for any necessary repairs that might be found during the course of a FHA appraisal. This is a common thing that prior to closing of a FHA mortgage loan, if there are repairs the seller must have them done or leave sufficient funds in the escrow to have the repairs done. If you had the statement "Borrower may obtain financing from the lender of buyers choice should put you in the drivers seat with the completion of this real estate transaction. You might not need an attorney to succeed. Your real estate agent should be able to get the ball rolling about your right of getting a mortgage loan and financing as it did not leave out the fact that you could secure a FHA or VA mortgage loan. Because the seller assumed that you would apply for and be approved for a government mortgage loan is not a problem of yours. I would contact my real estate agent and tell this person you intend to pursue this purchase based on the fact that you had a choice of lender and mortgage lenders without restriction as to obtaining a government mortgage loan. For legal and tax matters you should always consult your attorney or tax consultant. I hope this has been of some benefit to you, good luck. 'FIGHT ON"

Answer by Mr Placid
OK. Here's the deal, with the caveat that it is necessary to look at the entire contract to have a definitive answer: 1. You can go with any lender you want. 2. However, you still must close by January 15, 2010. 3. Closing requires you to tender $ 115,000 by January 15, 2010. 4. The $ 115,000 can come from anywhere. FHA, your banker, your pocket, whatever. 5. Since I presume there is "time is of the essence" clause in your contract, you have no wiggle room at all on the Jan 15 date, unless seller agrees to extend the date. 6. If you do not tender the $ 115,000 by Jan 15, you will be in breach of contract. 7. If you breach the contract, seller is entitled to breach of contract damages. I'm guessing your contract specifies that damages are the good faith deposit as liquidated damages, which means the seller can legally keep your security deposit. I'm guessing that your real issue is this: You could have easily closed by Jan 15 by going with the "in house" financing. However, you decided to go with FHA, but you can't get funded by Jan 15. So, you want the seller to extend the closing date. And, seller refuses to do so. Is that about right? If so, then you'd better start some extreme brown nosing, or pull out some extra cash, to get the sellers to voluntarily extend that closing date.

Answer by margie k
It's pretty simple. They want the house closed on before or on the date agreed upon. You have chosen financing that cannot do that. They then have the right to cancel the deal. Your job at this point is to get financing to allow for the original closing date. If you can't do so, you lose. It has nothing to do with what kind of financing you chose, it has to do with the date of settlement.

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