FHA Loans | Franklin Advantage, Inc.

What is the Federal Housing Administration?
The Federal Housing Administration (FHA) was created by the National Housing Act of 1934. Its intent was to regulate the terms of mortgages that it insured and increase the number of people who could afford a down payment and monthly mortgage payments. This also accomplished the goal of increasing the size of the market for homeownership.

About FHA Loans
Today, the FHA serves people who cannot afford a conventional down payment of 20% or who cannot afford Private Mortgage Insurance (PMI) fees, which are generally required by lenders if the applicant is financing more than 80% of their total loan. FHA is an alternative to PMI, protecting lenders and thereby providing more affordable loans for home buyers. Apply Online or Call today to speak to a Franklin Advantage, Inc.

Consultant about FHA Loans
FHA Guidelines
As with conventional loans, to secure an FHA loan you must meet basic income to debt ratio requirements, be able to verify your income and assets, liabilities, and credit history. However, these qualifications are likely to be more flexible with an FHA insured loan than the conventional loans offered today.
Debt to Income Ratios:

31% PITI - Your mortgage payment (Principal, Interest, Property Taxes and Property Insurance) should be no more than 31% of your gross monthly income.
45% Total Debt - Your total monthly debt including the mortgage; credit cards; auto loans; student loans; etc. should be no more than 45% of your monthly income.

Appraisal

The FHA requires a physical home appraisal (except in the case of streamlined refinancing)

FHA Credit History Guidelines
The following general credit guidelines apply:

Home purchase or refinance allowed just two years after a bankruptcy
Home purchase or refinance allowed just three years after a foreclosure

Other General Guidelines

Down payments as low as 3.5% of purchase price
Refinance with as little as 5% equity
More flexibility in calculating household income and payment ratios.

FHA-regulated closing costs

Up to $7,500 Tax Credit (First time home buyers are eligible until 6-30-2009; check with your tax preparer for details.)

FHA New Loan Limits

The Economic Stimulus Act of 2008 (http://www.hud.gov/offices/hsg/sfh/ lender/sfhmolin.cfm) went into effect as of March 6, 2008 and allowed the FHA to increase loan limits for new purchases and refinancing through the FHA.
The FHA loan maximum limit was increased from $362,790 up to $729,750.
New limits vary by the geographic location of the home you are trying to purchase. The maximum of $729,750 applies to large metropolitan areas where the cost of living and homeownership is higher.
Nearly 240,000 more homeowners and potential buyers may be helped by the new loan maximums

Is An FHA Loan Right for Me?
Franklin Advantage, Inc. can put the benefit of an FHA loan to work for you if:
New Home Purchase

You're a first-time homebuyer
You haven't owned a home recently

Refinancing

You would like to get cash out of your home
You need to lower your payment, but don't have a lot of equity
You need to refinance to protect your investment

Qualifying Concerns

You don't have a lot of money for a down payment
Your credit is less than perfect
You're self-employed

New Purchase FHA Benefits

Allowed 2 years after bankruptcy
Down payments as low as 3%
Allowed 3 three years after foreclosure
Up to $7,500 Tax Credit (First time home buyers, those who have not owned a home within the last 3 years, are eligible until 6-30-2009. Consult a tax professional for details.)

FHA-regulated closing costs
FHA LOWER RATE REFINANCING
Lower your payment and reduce the interest rate on your current home loan. We offer low fixed rates, with 15 and 30 year options. Home owners with current FHA loans in good standing may further qualify for streamlined refinancing with less paperwork, and oftentimes without an appraisal.