bombay girls pics, FHA Mortgage Loans are Back and Just in Time

FHA Mortgage Loans are Back and Just in Time

When I first started in the mortgage business, at least one in four of all of my buyers got an FHA loan. The rates were fantastic, the down payment requirements minimal, and the credit requirements were close to meaningless. Most first - time home buyers got an FHA loan.

In the last three years, over 600 families have trusted me with their home loan needs. Of those 600, I did a total of two FHA loans over that time. One in 300.

I wasn't alone. FHA guaranteed less than 5,000 loans in California last year. In 2003, they did over 100,000. A 95% decrease in demand. Nationally, FHA loans are down 50% from a few years ago.

FHA loans lost their popularity in the past few years for numerous reasons. Loan limits were too low for the fast-appreciating real estate market, income documentation guidelines were too strict, and appraisal restrictions were very difficult.

Subprime lenders, with looser guidelines, capitalized and met this demand.

Home values increased more than FHA lending limits did. The average home in Las Vegas was around $300,000. The FHA loan limit was around $270,000. Subprime lenders would go over $1 million.

FHA requires full documentation of your income and a 3% down payment. Subprime lenders were doing 100% loans with stated income with scores as low as 600.

Although sometimes flexible, FHA guidelines limit your debt-to-income ratio to 41%. Many subprime banks were letting borrowers go to 55%.

With rising sale prices, more borrowers went with stated income loans. FHA wouldn't allow this. Subprime did.

The FHA appraisal requirements were much more strict and this also turned off many sellers. Subprime lenders had no additional requirements.

The FHA loan was, quite frankly, a last resort. Subprime had taken its place.

Today, that has changed. With all of the recent guideline changes, the subprime loan is nearly dead with anything less than 5-20% down. Many subprime banks have gone out of business. Many more will.

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