fha

FHA to Assist Former Homeowners with Foreclosures to Buy Again

April 11, 2014 by khproperties Leave a Comment

Foreclosures May Not Affect Ability to Buy with New Program

The Federal Housing Administration has extended a program seeking to help former homeowners that have recently had a foreclosure (as well as bankruptcy, deed in lieu of foreclosure, short sales) get back on the path to home ownership once again. The FHA’s program, “FHA Back to Work Program,” will allow people to buy a new home after having been through foreclosure within as little as twelve months (typical wait times are normally three years). The program has been extended through September 30, 2016.

The program requires quite a bit of documentation to show why you were foreclosed on – a 20% loss of income for at least six consecutive months leading up the the event (also includes deed in lieu of foreclosure and short sales). A simple letter of explanation will not suffice, so homeowners will need to dig deep to show this, as without it, the program will not be applicable. Even divorce or an adjustable rate mortgage reset will not be accepted as reasons for entrance into the program. Along with the proof of loss of income, prospective homeowners will need to demonstrate that they have put the past behind them and worked to rebuild and correct their credit and must have a minimum credit score of 640 or go through a HUD approved counseling agency that focuses on home ownership and mortgages.

You can read more about the program and get started at the Back to Work Program website.

image courtesy of nigelhowe

What is a HUD home and how can I buy one?

January 24, 2013 by khproperties Leave a Comment

Many people ask what is a HUD Home and how it becomes one, so I thought I’d take a few minutes to explain. A “HUD Home” is defined by The Department Of Housing And Urban Development (HUD) as “a 1 to 4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.” Basically, this means someone bought a home using an FHA-insured loan, didn’t pay their mortgage, the bank who issued the mortgage foreclosed on the property (not HUD), and it was acquired by HUD. The property is now owned by HUD and they want to sell it, so they list it as a HUD home.

Who can buy a HUD home?

HUD homes are offered to owner-occupants (person who buys the house must live in the house) and after a period of time, if they are not sold, they are available to investors.

How do I find HUD homes?

You can search for HUD homes the same way you search for any other home. In the past, HUD controlled their inventory through very specific channels and agents had to have special keys to unlock their properties (I think I still have a set hanging around somewhere), but as the housing crisis deepened, they changed the rules and simplified the process in order to help move some of their inventory.

Can anyone make an offer on a HUD home?

All offers must be made through a real estate agent registered with The Department of Housing And Urban Development. Most broker in the San Antonio area are registered (including us). The process of making an offer on a HUD home is a little different than other homes, but in general the items you need to know and pay attention to remain the same. Once you and your agent have identified a HUD home as the one you want to purchase be sure to speak with your agent about your expectations about the process as it can take awhile longer than other transactions.

photo courtesy of teofilo

FHA Limits Restored

November 21, 2011 by khproperties Leave a Comment

This just in from the National Association of REALTORS® News Desk: Congress has restored the loan limits for the FHA for two years.

Back in September we let you know that the loan limits had been reduced in over 40 states. Effective immediately, these limits have returned to the previous levels.

For San Antonio, this means that the limit of an FHA home mortgage is once again:

$337,500

The reinstated FHA loan limit should help to keep mortgages affordable and accessible. FHA morgtgages require one of the the lowest downpayment of any traditional mortgage currently on the market (3.5%) and their presence in the market is critical as we work towards a housing market recovery.

If you have questions about FHA loans, contact a professional REALTOR® or mortgage broker for specifics.

image courtesy of krissen

FHA Loan Limits Drop

October 1, 2011 by khproperties Leave a Comment

Effective October 1, 2011, the loan limit on a FHA (government backed) mortgage on a single family home in Bexar County dropped from $332,500 to $287,500. The numbers, released by HUD and the FHFA have the potential to substantially affect the availability and affordability of mortgage credit.

FHA loans have been one of the most popular loan types in recent years, particularly for first time home buyers, due to their low downpayment requirement (currently 3.5%). The new, lower limit means that buyers will either have to come up with substantially more cash as a downpayment,or that many homes may suddenly be out of reach to many home buyers.

FHA loans have typically required a minimum of 3.5% investment by the buyer (downpayment). This means that anyone seeking to purchase a home with an FHA mortgage in Bexar County can no longer spend more than $297,927.47 on their home purchase with the minimum downpayment. ($10,427.47 downpayment and a loan of $287,500). Previously these same buyers could possibly have financed a loan on a property up to $344,559. That’s over $46,000 difference in home buying power for these types of buyers.

Alternative loan programs (non-conforming or “conventional”) require as much as 5% down before potential buyers could be eligible.

Forty two states contain counties that have been negatively impacted by these limit adjustments. San Antonio is not alone in feeling the pinch from the latest round of lending crackdowns.

What this means to you:

Buying a home: If you were considering an FHA backed mortgage, consult with your lending professional to see how these recent changes impact your specific loan situation. Adjust your home search criteria if necessary to take these new limits into consideration. Look for additional funds for downpayment that may open new finance options to you.

Selling a home: Homes priced in the $300,000-350,000 price range are most substantially affected, as the pool of financing options for potential buyers has been severely limited. Consider your price points and potential buyers. If these limits do make a difference, consider altering some of your marketing strategies to better target your new buyer pool. Be prepared for even strong buyers to struggle with some of the new regulations on the mortgage industry.

image courtesy of matturick