The Nation’s financial crisis caused several liberal sources of home financing to disappear in a very short time. Those sources may return some day, but they’re gone, at least for the near future. Loan qualification guidelines are more difficult and complex than ever and down payments required to get the best interest rates on conventional loans are much higher than they were six months ago. Consequently, government loans are becoming a more popular source of mortgage funds. In part 1 of this series, we’ll cover loans provided by the Federal Housing Administration (FHA).
Here are the highlights of an FHA mortgage loan:
- Down payment required is just 3.5% !!
- 100% of the down payment may be a gift
- Owner occupants only (no loans on second homes or investment properties)
- Non-occupying co-borrowers are allowed (example: a parent helping their child buy a home)
- Minimum credit score is 620
- Maximum loan amount is $793,750
- Cash reserves are not required
- Condos require at least 51% owner occupancy and they must be on the FHA Approved Condo List (getting on the list is a lengthy, difficult process)
Please consult your Honolulu mortgage professional if you have questions. Contact Michael Zimmerman if you need a referral to a great mortgage advisor.
