The Great White North

By admin on July 1, 2008

An agreement between the FHA and the Minnesota Housing Finance Agency was annouced today which is the first of its kind. The agreement is to promote affordable government-backed mortgages.

“For many years, people in the industry and in state government have expressed the need for a clear, mutually-agreed upon memorandum of understanding between FHA and states for the financing of single family properties,” said HUD’s Assistant Secretary for Housing-Federal Housing Commissioner Brian D. Montgomery. “This MOU will help people in need right now by harmonizing the work of FHA and the Minnesota Housing Finance Agency (HFA), and by making FHA loans more available to those who qualify for them.”

There is still a significant increase in FHA business throughout Minnesota as in the first quarter of 2008 there was an increase of 126 percent participation.

Visit to learn more about this groundbreaking event.

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So long Nehemiah?

By admin on June 27, 2008

It has been said that certain home loan programs which help in the assistance of down payments may be cut with the new housing bill.

Debates in the Senate going on right now will eliminate these Nonprofit Organizations while the House debates imposing new regulations on these programs. These programs have become very popular and have surged over the past 10 years.

Some question the nonprofit status of these programs and even say that these types of no money down loans could put taxpayers at risk of having to bail out the government backed mortgages.

The programs, which receive no federal subsidy, help borrowers qualify for loans backed by the Federal Housing Administration, a government agency that backs loans made to low-income borrowers or those with poor credit.

Sellers often times inflate the price of the home to offset the down-payment assistant. But on the other side, individuals who use the program would be kept from purchasing a home.

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FHA Mortgage – Best Blog Contest

By admin on April 30, 2008

I have recently entered a contest on FHA Mortgage in which they are trying to find who has the best FHA Loan blog. There is a list of the leaders and the sites that have also entered so be sure to check it out and vote mine up.

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The HUD/FHA Good Neighbor Next Door Program

By admin on April 24, 2008

The FHA and HUD have a special program called the Good Neighbor Next Door Program. This program is designed to help people from certain professions to purchase homes at a lesser cost. Some of the details of this program include:

• Professionals in the fields of teaching, law enforcement, fire fighting, paramedics, and emergency medical care can get discounts on HUD homes. As long as you work in one of these fields, you can get a great deal on homes for sale from the FHA.
• People in these professions can purchase a home from HUD/FHA for a 50% discount. These people pay half of the asking price of the home without the bidding process involved with normal buyers.
• In order to get the huge discount, the person purchasing the home must agree to live in the property for three full years before selling the property or moving.
• The property can not be used as a rental unit, as part of the agreement is owner occupancy.
• If the buyer decides to move before the three years are up, they have to pay the FHA/HUD back the amount of the original discount.

The idea behind the Good Neighbor Next Door Program from HUD is to get responsible role models to move into neighborhoods and help the areas revitalize. Usually people in these particular professions get respect from the community, and the neighborhoods they live in may become safer and more secure just because of their presence. Many neighborhoods and communities have a lack of good role models, and the Good Neighbor Next Door Program from HUD offers this valuable benefit in order to get these areas safe and secure again.

For more information on the Good Neighbor Next Door Program go to

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Funds Required to Close on a FHA Home Loan

By admin on April 17, 2008

FHA requires a down payment of 3% of the sale price be paid; and will allow this to be in the form of a gift from a family member, significant other or grant; however, it cannot be paid by the seller or lender. FHA will also allow a seller to pay up to 6% of the sale price towards closing costs and prepaids. Without any contributions from the seller, you can expect to pay approximately 2% more at closing.

Closing costs are those fees charged for services provided and can be from the lender, title/escrow company or third party vendor such as the credit reporting agency or appraiser.

You will also be required to establish an escrow (prepaids) account when you close. This usually consists of 3 months property taxes and 4 months property insurance.

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A Note on Mortgage Insurance with FHA Loans

By admin on April 10, 2008

FHA requires mortgage insurance (default insurance) on all loans except a 15 year note with 10% down payment. With the requirement of an upfront amount of 1.5% of the sale price, additionally, .50% of the loan amount is collected monthly. The upfront amount is usually financed into the loan.

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Credit Scores and FHA Mortgages

By admin on April 3, 2008

While the term “credit score” has grown in popularity over the past few years, it is a very important role in the credit approval process. There are three major companies, Experian, Equifax and Trans Union; whereas, each one provides a score based on the credit information provided. Mortgage lending uses all three companies called a tri-merge report, and the middle score is usually the one referred to when credit score is mentioned.

A middle score of 620 is the rule of thumb for receiving an AU (automated underwriter) approval; however, FHA financing allows those with lower scores and no credit to be considered for a manual approval. While lower scores or prior derogatory credit may be approved, specific documentation is required in order for a credit decision to be made. In addition, FHA will consider Chapter 7 (after 2 years) and Chapter 13 (after 1 year) bankruptcy as well as previous foreclosures (after 3 years) for approval; however, credit must have been re-established. FHA does not allow delinquency on any federal debt and requires all judgments to be paid.

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FHA Loan Program Description and Qualification

By admin on March 27, 2008

Program Description

FHA’s primary financing program is a fixed rate loan. This means the interest rate you begin with stays the same through the life of the loan, usually 30 or 15 years.


FHA qualifying guidelines include ratios in which a house payment (principal and interest, property taxes, homeowner’s insurance and mortgage insurance) should not to exceed 31% of your gross income and house payment plus all debts (referred to as DTI) should not exceed 43% of gross income. Debts considered in the DTI ratio consist of accounts with balances, credit cards and student loans (including deferred). Small installment loans with less than 10 months remaining are not counted in the DTI. Under certain circumstances, ratios exceeding 31/43 will be considered. (i.e. automated underwriting, purchasing energy efficient home, large down payment)

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FHA Homes for Sale

By admin on March 17, 2008

Have you ever seen an advertisement for a buyer’s guide to purchasing homes that are sold by the government? The commercial or ad usually tells you that there are loads of homes, cars, and other property that is seized by the government all the time, and you can learn how to buy these properties for pennies on the dollar if you purchase their book, subscribe to their website, or pay a one time fee for an ebook.

The truth is that you do not need to pay money to find out how to purchase homes from the FHA, you only need to go to their homes for sale website at Here you will find information including:

• How to purchase a home from the FHA. The homes that the FHA are selling are foreclosures that were guaranteed by the government, and now that the mortgage loan was foreclosed on, the government owns the house and is responsible for the sale. This site also features the homes that are for sale from the Department of Veterans Affairs.
• Once you go to the site you can enter the state you are interested in purchasing a home in, and the city. Then a list will come up that shows the price of the home, square footage, number of bedrooms, number of bathrooms, and more. It will also tell you if there are any buyer incentives or broker incentives for the home.
• The FHA offers discount ts and incentives for owner-occupants. Owner-occupants are people who purchase the home as their primary residence. The FHA and VA offer their homes for sale to people who plan to occupy the home before they offer them for sale to real estate investors.
• You CAN NOT purchase homes from the government for pennies on the dollar. Sometimes there are discounts available to non-profit organizations or other government agencies that are purchasing a home from the FHA, but a normal civilian citizen will pay a reasonable price for the home, but it is usually under the appraised value of the home, which is still a good deal.
• Each home has a specific period of time in which the FHA will accept offers on that particular home. If you are interested in buying a home, you must have a broker make a bid on the home during this allotted time. The FHA accepts the highest bid for the home from a registered FHA broker.

For more information on purchasing homes from HUD, the FHA, or the VA go to

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FHASecure Program

By admin on January 23, 2008

On December 3, 2007 President Bush addressed the concerns of many homeowners facing foreclosure with the news about a government backed refinancing program called FHASecure. FHASecure is a government-insured program designed to avoid foreclosure with sub-prime loan homeowners. In three months the initiative has helped over 33,000 avoid foreclosure with the hopes of helping over 50,000.

“FHASecure is providing tens of thousands of families with a powerful incentive to obtain affordable and safe home loans,” Jackson said during his keynote address to the Office of Thrift Supervision’s National Housing Forum. “Homeowners finally have an opportunity to save their American Dream without risking their financial future, and they’re taking advantage of it everyday.”

The program was established in August of this year and provides individuals who have a history of making their payments on time in accordance with their original loan interest rates but once the rates were increased they became delinquent. These loans are becoming more of a viable option considering FHA Loans are less likely to become foreclosure cases.

For information regarding this program or any other FHA program you can visit the site or you may also visit the Mortgage Loan, an FHA approved lender.

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