California FHA Access Offers a .5% Down Payment Financing Option

The FHA Access Program now can benefit California Homebuyers with the opportunity to purchase an owner occupied primary residence with little (.5%) for down payment. The program combines the traditional FHA 30 Year Fixed 3.5% down loan with a 3% second loan. The second loan is a 15-year fully amortized loan. The lower down payment offers homebuyers the opportunity to get back in the housing market sooner than the traditional FHA loan program.

Program Example

  • Purchase price $300,000
  • 1st loan amount 96.5%
  • 2nd loan 3.5%
  • Total financing 99.5%
  • Down payment .5%

Program Guidelines

  • Eligibility: Borrowers must owner occupy the subject property.  No first time home buyer requirement.  Maximum income requirements apply (120% of HUD Area Medium Income).
  • Property Eligibility: Single Family Residences, PUDs, and FHA approved condos.
  • Credit Score: No minimum credit score required.

Property Flipping – Temporary Waiver Extension

FHA has extended the temporary property flipping waiver announced in 2010 to December 31, 2014. This temporary waiver removes the restriction that prohibits FHA financing of properties being sold within 90 days of seller acquisition.

Through the regulatory waiver, FHA encourages investors that specialize in acquiring and renovating properties to renovate foreclosed and abandoned homes, with the objective of increasing the availability of affordable homes for first-time and other purchasers, helping to stabilize real estate prices and to stabilize neighborhoods and communities where foreclosure activity has been high. The waiver is applicable to all single family properties being resold within the 90- day period after prior acquisition, and is not limited to foreclosed properties. Additionally, the waiver is subject to certain conditions, and mortgages must meet these conditions to be eligible for the waiver. The waiver is not applicable to mortgages insured under HUD’s Home Equity Conversion Mortgage (HECM) Program.

For additional information, refer to the Federal Register Notice .

FHA Bailout? Probably Not

HUD just released its Annual Financial Report to Congress.  The report stated the health of their Mutual Mortgage Insurance (MMI) fund.  In the event that a home owner defaults on their mortgage, the FHA insurance is what pays lenders back.  Per the HUD report, “FHA is expected to sustain significant losses from loans insured prior to 2009, and thus its capital reserve remains below the congressionally mandated threshold of two percent of total insurance-in-force.”  FHA predicts the losses due to this riskier financing grew by $1.8 billion over the past year to $14.1 billion.  Down from $4.7 billion just last year, the FHA fund currently has $2.6 billion in cash reserves.

“It would take very significant home price declines to create a situation in which the portfolio would require any additional support,” said Carol Galante, acting commissioner. “There is no evidence or widespread prediction that home prices are going to decline to the kind of levels requiring a bailout,” she said.

Since 2010, the FHA has:Worked with more than 1.2 million households and insured $218 billion in single-family mortgages.The FHA has assisted more than 585,000 families to become homeowners for the first time. This number is 56 percent of all first-time buyers in the United States.  FHA has Refinanced 440,000 households to lower interest rates, saving an average of $160 per month.

HUD’s report to Congress on the Financial Status of the MMI Fund, and FHA’s Fiscal Year 2011 Financial Status Briefing are available on HUD’s website, www.hud.gov.

Reverse Mortgage loan limit in San Diego for 2012

If you are in need for a Reverse Mortgages in San Diego for 2012, you in are in luck!   The maximum loan limits will not be lowered.  The current FHA Home Equity Conversion Mortgage (HECM) maximum amount of $625,500 will remain the same.  A formula using the borrower’s age and amount of equity in their current home is used to calculate the final loan amount on a Reverse Mortgage.