There was a time when sellers would shy away from FHA mortgages because of certain restrictions, requirements for seller contributions, and difficult appraisal and underwriting processes. In the last few years however, the Federal Housing Administration reworked their guidelines and made significant changes, making their mortgages more affordable, more flexible and readily available. According to CNNMoney, there were 106,000 more FHA insured loans issued in the first 2 months of 2009 than in all of 2007 and nearly half as many as all of 2008. Why is that? Well, with decreasing home prices and increased loan limits, these loans are very attractive for buyers with good incomes but not enough money saved for a 20% down payment. FHA will finance up to 96.5% of the sales price. Because of the low down payment, competitive rates, and relatively easy credit score issues, these mortgages are now more of a life-saver than a death knell.
If you are seriously thinking about buying a home it can’t be overstated just how great a time it is right now to “pull the trigger”. FHA lending has soared in the last 3 years from 3% to 20% of the dollar volume of all home loans. There’s plenty of money available. If you’re not sure what you qualify for, consult with a Realtor and a Mortgage Lender. Don’t let this opportunity pass you by.