- 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.
How can I help you or your friends?
- 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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Originally published November 4, 2008.
Ok, if you’re thinking that I’m talking about an illegal substance, you’re wrong. In fact, I’m not talking about anything of the sort! Sometimes I worry about the people reading this! J
I’m talking about two things other things that are on their way down, and they’re closely related: Inflation and Mortgage Rates!
As I’ve said in previous newsletters, inflation is what causes mortgage interest rates to go up. Let me try to explain very briefly and simply. If you’re looking to invest some money, and you know high inflation is prevalent, you don’t want to buy a long term security like a CD right? After all, if you’re earning 5% on a CD, and inflation is 4%, then you’re only outpacing inflation by .25%! If you’re thinking about that 1% you’re earning over the pace of inflation, you’re forgetting about the taxes! Take a 15% long term capital gain tax, and you’re only truly earning 4.25%!