Mortgage Insurance- a policy that protects lenders against losses that result from defaults on home mortgages. FHA loans require mortgage insurance primarily for borrowers making a down payment of less than 20 percent. Mortgage insurance is charged monthly at an annual rate of .5% along with an upfront fee of 1.5%.

Loan to Value- 97% max LTV for a purchase or rate and term refinance, 95% max LTV for a cash-out refinance.

Credit Score- although FHA does not impose credit score limits, it is difficult to approve a borrower below a 540 credit score. 

Debt Ratio- Typically the debt ratio should not exceed 41% of debt to income, but with compensating factors such as time on job and credit history, it may be possible to gain an approval.

Loan Sizes- Here is a link to FHA loan size limits https://entp.hud.gov/idapp/html/hicostlook.cfm


DOWN PAYMENT ASSISTANCE

These programs allow for borrowers to purchase a home and get assistance with the down payment and closing costs. Through the use of a charitable organization, sellers are able to gift funds to pay for the closing costs and down payment. In a buyer's market, it is very easy to get sellers to agree to make these contributions. The two largest down payment assistance organizations are Nehemiah and Ameridream. In many cases, borrowers have not had to pay any of their fees or down payment costs associated with their purchases.

Link to Nehemiah down payment assistance http://www.nehemiahcorp.org/

Link to Ameridream down payment assistance http://www.ameridream.org/

ADDITIONAL RESOURCES/LINKS

FHA Appraiser List: entp.hud.gov/idapp/html/apprlook.cfm
FHA MIP Calculation: www.hud.gov/offices/hsg/comp/premiums/sfpcalc.cfm
HUD Example Broker Fee Agreement: www.hud.gov/offices/hsg/sfh/res/mbcontr.pdf

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Licensed in AZ (B-0907489), CA, NM