- FHA loans in Florida
Sometimes people think that FHA is an acronym that means first time homebuyer. The Federal Housing Authority (FHA) loan isn’t just for first time homebuyers. In fact, you can have multiple FHA loans. It is required that you plan to reside in the home as your primary residence though. It’s conceivable under certain conditions that you could rent your current home with an FHA loan already in place and relocate to another home and get another FHA loan, having two FHA loans at the same time. “FHA” does not mean “first time homebuyer”.
The FHA, administered by the Department of Housing and Urban Development (HUD), places limits on the mortgage amounts in various counties. I guess HUD doesn’t want to be financing homes for the rich and famous buying their mega mansion. They want to finance homes for the common folks like me! HUD changes their limits as prices fluctuate. The limit is going down this time which seems bad, but it’s because homes are so much more affordable now, and that’s a good thing!
My primary area of business is Okaloosa County,Florida. The limit in Okaloosa County is reducing from $312,500 to $271,050. To check the loan limit in your area, click the HUD logo above. It’s important to note that this change affects loans registered (not necessarily closed) with FHA on or after Oct 1, 2011. So if you’re working out a purchase agreement in this price range that isn’t going to close for several weeks or months, that’s ok so long as your lender (me, of course) gets it registered with FHA before Oct 1.
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- Rural Housing loans in Florida
I hope you’ve got your Rural Housing loan ready to close by the end of September 2011. The cost of financing a RH loan will go up for any loans approved by Rural Housing on or after the 1st of October. It’s not a huge increase, but you may want to know about it.
The Guaranteed Rural Housing Loan is already similar to the FHA loan, but it offers financing at 0% down, whereas the FHA loan requires at least 3.5% down. The FHA loan has an upfront fee that is rolled into the loan, and an annual fee spread across the 12 payments. A Rural Housing loan has historically only had an upfront fee. Beginning with approvals on or after Oct 1 the RH loans will have a reduced upfront fee but will be adding an annual fee. The difference in payment for loans approved after October 1 will be about $17/month higher per one hundred thousand financed.
It’s interesting to note that the annual fee is calculated every year based on the average unpaid balance for that year. In other words, the calculation is pretty complex, but makes a little bit more sense than the typical mortgage insurance model. The new RH model only charges mortgage insurance (they call it “Annual Fee”) on the unpaid principal each year, so it reduces over time. Typical mortgage insurance is a flat fee calculated upfront and doesn’t reduce regardless of how much you pay down your loan. So while the RH fee is more complicated, it’s fairer, at least in my humble opinion.
Remember the RH loan has household income limits you can access here, and is only available in some areas. To find eligible areas, click here. My primary area of business is Okaloosa County, Florida. The income limit in Okaloosa county is $102,500/year for a household of 5-8 and $77,650 for a household with 4 or less people. If your household earns more money than the household limit (kids included), you can’t get a Rural Housing loan.
The Rural Housing loan is an excellent program if you and your property are eligible!
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Finally, we begin to see recovery (at least in the credit markets!)
I know it’s getting cooler outside (and I love it), but are you feeling the warmth coming from the financial markets? The thaw of the “Credit Freeze” has begun! Sure, the thaw is slow, but certainly the worst already occurred back on Wednesday the 15th. That’s when the FED put the first 250 billion of the rescue plan to work!
The Fed is also buying commercial paper now (“commercial paper” is basically business loans). This will bring the LIBOR down some more. So, if you have an adjustable rate mortgage based on LIBOR, the news is getting better. That reminds me to tell you, if you are at all concerned about an Adjustable Rate Mortgage you have, please give me a call and we’ll go over the particulars. Just a couple of weeks ago, I gave someone the good news that her interest rate is going to go down when it adjusts. I wish all my calls were that much fun to make!