Spectacular New Financing For FHA Buyers Is Now Available

Have you heard of the National Homebuyers Fund? I hadn’t either until I found out about them offering 100% financing for eligible FHA buyers seeking to purchase homes with loan amounts currently up to $766,550 for a 1-Unit conforming loan. $1,149,825 for a high balance loan amount! In this article Amazing New Financing For FHA Buyers Is Now Available we answer the question of what is an FHA loan while providing you a breakdown of FHA loan key features, and FHA Mortgage Loan Financing, and introduce you to the National Homebuyers Fund Program. If you have been on the sidelines of the real estate market now is your time!

According to a recent report by the Urban Institute, 68 percent of U.S. renters see the inability to save for a down payment as one of the biggest obstacles to homeownership. In addition, only one in five consumers interviewed were even somewhat or not at all familiar with low–-down payment or down payment assistance programs.

One of the largest challenges for homebuyers is coming up with the funds to cover the down payment requirements and/or closing costs associated with a mortgage loan to purchase a home. To bridge that gap, NHF, the National Homebuyers Fund, provides down payment and/or closing cost assistance (known as “DPA” funds), of up to 5% of the total purchase price of a home! National Homebuyers Fund Program with down payment assistance is available in most U.S. states and qualifying guidelines are flexible. The assistance may be forgiven immediately, after a short period of years, or have repayment requirements, depending on the Program. Our preferred lender offers the National Homebuyers Fund Program and can discuss the options available with you.

National Homebuyers Fund Program:

DPA is available up to 5% of the home’s purchase price
Assistance can be used towards down payment and/or closing costs
There is no requirement that a borrower be a first-time homebuyer to qualify
FICO score requirements and allowable debt-to-income ratios are flexible
DPA programs feature generous income limits; higher than might be expected
FHA, VA, USDA, and Conventional Mortgage Loan financing is available
DPA is available for both purchase and refinance of a primary residence
Sponsored by NHF and available nationally through Participating Lenders

National Homebuyers Fund®, Inc. (NHF) is a non-profit public benefit corporation established in 2002 to stimulate and expand homeownership opportunities and strengthen communities nationwide. Their goal is to be recognized as an outstanding provider of innovative, flexible, and fiscally responsible homeownership solutions that respond to the affordable housing challenges of our nation. NHF is a non-profit public benefit corporation.

Research has long supported the many correlating benefits of homeownership to local communities and economies, such as a positive impact on educational achievement, a greater involvement in local communities, a general increase in happiness and health, a stabilizing of neighborhoods, and a reduction in crime.NHF is proud to be at the forefront of creating innovative financial assistance programs to meet the challenges of homebuyers and homeowners. Over the last 21 years, NHF has helped more than 48,300 individuals or families purchase a home and has provided over $417.8 million in down payment assistance.

What is an FHA loan?

An FHA loan is a mortgage loan funded by a bank or mortgage company, not by the government, that is insured by the Federal Housing Administration (FHA), which is a government agency within the U.S. Department of Housing and Urban Development (HUD). The FHA loan program was created to make homeownership more accessible to a larger number of Americans, particularly those who may have difficulty qualifying for a conventional mortgage. Continue reading for more FHA loan key features.

FHA Loan Key Features:

Mortgage Insurance by the FHA: The FHA insures the loan, which means that if the borrower defaults on the mortgage, the FHA will pay the lender a portion of the outstanding loan balance. This insurance makes lenders more willing to approve loans for borrowers with lower credit scores or smaller down payments.

Down Payment: FHA loans typically have more lenient down payment requirements and higher “debt to income” ratios compared to conventional “Fanie Mae” loans. While conventional loans may require a downpayment of 5%-20% or more, FHA loans often allow borrowers to make a down payment as low as 3.5% of the home’s purchase price.

Credit Score: FHA loans may be more accessible to individuals with lower credit scores compared to conventional loans. While the specific credit score requirements can vary, borrowers with credit scores below what is typically required for conventional loans may still qualify for an FHA loan.

Interest Rates: FHA loans may have competitive interest rates, but they can vary depending on the lender. It’s essential for borrowers to shop around and compare rates from different lenders.

Loan Limits: FHA sets limits annually on the amount that can be borrowed. These limits vary by location within each county of the US and are adjusted annually each November.

Mortgage Insurance Premiums (MIP): Borrowers seeking FHA financing are required to pay mortgage insurance premiums, both an upfront premium at the time of closing, which can be financed, meaning added to their loan amount and also an annual premium that is paid with the monthly mortgage payments. This insurance protects the lender in case of borrower default.

Property Requirements:

FHA loans also have specific requirements regarding the condition of the property being financed. The property as well as the borrower must meet specific standards to qualify for FHA financing.

It’s important for potential borrowers to understand the terms and conditions of FHA loans and to work with an FHA-approved lender. While FHA loans can be a good option for some homebuyers, they may be a better fit for some. It’s advisable to explore various loan options and consult with a mortgage professional to determine the most suitable financing solution based on your individual circumstances.

A 100% financing FHA mortgage loan refers to a type of home loan that is insured by the Federal Housing Administration (FHA) and allows borrowers to finance the entire purchase price of a home without the need for a traditional down payment. While the term “100% financing” implies that you can buy a home without putting any money down, in reality, there are still some upfront costs associated with obtaining an FHA mortgage, including closing costs, appraisal fees, and other expenses.

FHA Mortgage Loan Highlights:

Low Down Payment: Although it’s often referred to as 100% financing, an FHA loan typically requires a relatively small down payment compared to conventional loans. As of my last knowledge update in September 2021, the minimum down payment requirement for an FHA loan was 3.5% of the purchase price but can be combined with down payment assistance in the form of a 2nd mortgage which may be forgiven. However, this percentage may vary over time, so it’s essential to check the current requirements.

FHA Insurance: FHA loans are backed by the federal government through the Federal Housing Administration. This insurance mitigates the risk for lenders, making it easier for borrowers to qualify for a loan, even if they have less-than-perfect credit or a lower income.

Mortgage Insurance Premium (MIP): Borrowers who obtain an FHA loan are typically required to pay both an upfront mortgage insurance premium (UFMIP) and an annual mortgage insurance premium (MIP). The MIP helps protect the lender in case the borrower defaults on the loan.

Flexible Qualification Criteria: FHA loans often have more lenient credit scores and debt-to-income ratio requirements compared to conventional mortgages. This makes them accessible to a broader range of borrowers.

Limits on Loan Amounts: FHA loans have maximum loan limits that vary by location and are adjusted annually. These limits determine the maximum amount you can borrow with an FHA loan.

Our preferred lender Joe Tishkoff, is a Senior Mortgage Advisor with Paramount Residential Mortgage Group (PRMG). Joe is proud to bring 100% financing for eligible FHA buyers seeking to purchase homes with loan amounts in 2023 up to $726,200 currently (new loan limits are announced after Thanksgiving by the FHFA).

Program Highlights:

100% Financing
30-year fixed rate FHA first mortgage with down payment assistance of 3.50% included
Down payment assistance options:
30-year soft second forgivable mortgage (no payment required), or
10-year repayable second mortgage (payment required)
Funds are used for down payment and/or closing costs
Minimum 600 credit score
Standard balance loan amounts only (2023 limits apply of $726,200 for L.A. and most surrounding counties)
No income restrictions
Homebuyer education required (a 1-hour online course)

I hope that you enjoyed reading Amazing New Financing For FHA Buyers Is Now Available, and that I provided a valuable introduction to the FHA loan while sharing a breakdown of FHA loan key features, and FHA Mortgage Loan Financing, and introducing you to the National Homebuyers Fund Program. If you have been on the sidelines of the real estate market now is your time!

New Loan Amounts Just Anounced Reach Out!

As a Los Angeles realtor and Angeleno, I have seen the ebbs and flows of several real estate markets. I continue to have my finger on the pulse of the emerging neighborhoods and have a focus on both the preservation of architecturally significant properties while being a steward of green architecture and new modern development to help ease our strain on the lack of housing inventory.

I am a Senior Real Estate Specialist (SRES®) holding certifications in Probate and Trust Sales and Accessory Dwelling Units. My marketing and negotiation skills, combined with community outreach have helped me build a solid reputation with my clients. I continue to empower my clients with this knowledge, helping them get closer to building wealth and financial independence.