Did you know that...
FHA loans are assumable?
You can assume an FHA-insured loan, or, if you are the one selling, allow a buyer to assume yours. Assuming a loan can be very beneficial, since the process is streamlined and less expensive compared to that for a new loan. Given the current popularity of FHA loans and (near) historic low rates, this feature may be valuable in the event of a future property sale.
FHA 203(k) loans can be use for for mixed use property?
Yes you can. Here are the top level prerequisites:
- The floor space used for commercial purpose cannot exceed 25% for a 1-story building, 49% for a 2-story building, and 33% for a 3-story building; and
- the commercial use will not affect the health and safety of the occupants of the residential property; and
- the rehabilitation funds will only be used for the residential functions of the dwelling and areas used to access the residential part of the property.
FHA has no cash reserve requirements?
With the exception of 3 and 4 unit properties, FHA does not have cash reserve requirements. For those transactions, the borrower must have reserves equivalent to 3 months' PITI after closing on purchase transactions.
Can child support be used as qualifying income?
Yes, and because it is tax-free it even gets grossed up to 125%. Actual receipt of the child support and a 36-month entitlement following the close must be documented.
FHA monthly premiums may be removed after 5 years?
FHA monthly mortgage insurance premiums may be removed when the mortgage reaches 78% of the initial sale price or the appraised value, provided premiums are paid for at least 5 years?
FHA loan donors may borrow gift funds?
Yes, from any acceptable source provided the mortgage borrowers are not obligors to any note to secure money? See acceptable FHA down payment options.
You can rent out your current home and use the income to qualify for a new home using and FHA loan?
Well, maybe. If your current home is FHA financed you need a relocation, the most common one of which is a homebuyer relocating with a new employer, or being transferred by the current employer to an area not within reasonable and locally recognized commuting distance. You also need sufficient equity in the vacated property. Maximum loan-to-value ratio is 75%, as determined by current mortgage balance (you are allowed to pay it down to suit), and an appraisal.
FHA only requires that a home be marketable in the area and have adequate space necessary to assure suitable living, sleeping, cooking, dining accommodations and sanitary facilities. Some lenders have a minimum square footage requirement. Prospect does not.
FHA upfront insurance premiums partially refundable if the loan is repaid within 7 years?
This is particularly useful when using a 203K rehab loan to fix up a property that is worth a lot more when finished. You can refinance to eliminate the monthly mortgage insurance - the partial refund (75% in the first year) will pay for the refinance, and you will have money left over!