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An Overview of FHA
Mortgages
Single Family Mortgages
The
purpose of this program is to provide mortgage insurance for a person
to purchase or refinance a primary residence. The mortgage
loan is funded by a lending institution, mortgage company or savings
and loan and is insured by HUD.
- Borrowers are eligible for 97% financing.
- Borrowers are able to finance closing costs and
the up front mortgage insurance premium into the mortgage.
- Borrower will pay a monthly mortgage insurance
premium that is included in the mortgage payment.
- All 1-4 Family properties are eligible.
- The maximum mortgage amount for a single family
residence is $333,600, with adjustments for certain geographic
locations.
Single
Family Mortgages in Rural Areas
This
program provides mortgage insurance for a person to purchase a residence
in a rural, or outlying area. The mortgage loan is funded
by a lending institution, mortgage company or savings and loan and
is insured by HUD
- The borrower is eligible for approximately 97%
financing. Borrowers are able to finance closing costs
and the up front mortgage insurance premium into the mortgage.
- Borrower will pay a monthly mortgage insurance
premium that is included in the mortgage payment.
- Eligible properties are 1-4 family properties,
including farm housing located on 2 acres or more of loan adjacent
to an all-weather road.
- The maximum mortgage amount for a single family
residence is 75% if the county limit for that area.
Single
Family Rehabilitation Mortgage
This
purpose of this program is for a borrower to purchase or refinance
a primary residence to repair or improve it. This is commonly
called a 203(k) loan. A minimum of $5,000 in qualified repairs
must be down on the property, which can be a variety of repairs.
- The borrower must occupy the property.
- The mortgage insurance premium is paid monthly
and there is no up front premium.
- The borrower can purchase a 1-4 unit property
that was completed at least 1 year ago. The number of
units, if the property is multi-family, must be acceptable to
local zoning provisions.
- Properties that have been demolished or that will
be razed as part of the rehabilitation work are eligible, provided
the existing foundation is not affected and will still be used.
The complete foundation system must remain in place.
Single
Family Cooperative Program
The
purpose of this program is for a borrower to purchase a Corporate
Certificate (stock certificate or membership certificate) and an
Occupancy Certificate in a cooperative. The mortgage loan
is funded by a lending institution, mortgage company or savings
and loan and is insured by HUD
- The borrower is eligible for approximately 97%
financing. Borrowers are able to finance closing costs
and the up front mortgage insurance premium into the mortgage.
- Eligible properties are detached or semi-detached
units, row houses or multi family dwellings.
- The maximum mortgage amount for a single family
residence is $333,600, with adjustments for certain geographic
locations.
Low
and Moderate Income Program
The
purpose of this program is for low to moderate income borrowers
or a borrower displaced by natural disaster or urban renewal to
purchase or refinance a low cost principal residence. The
mortgage loan is funded by a lending institution, mortgage company
or savings and loan and is insured by HUD
- The borrower is eligible for approximately 97%
financing. Borrowers are able to finance closing costs
and the up front mortgage insurance premium into the mortgage.
- A displaced borrower can purchase a home with
only $200 as a cash investment.
- All 1-4 family properties are eligible.
- The maximum mortgage amount for a single family
residence is $56,000.
Single
Family Condominium Units
The
purpose of this program is for a borrower to purchase or refinance
a primary residence in a condominium project. The mortgage
loan is funded by a lending institution, mortgage company or savings
and loan and is insured by HUD
- The borrower is eligible for approximately 97%
financing. Borrowers are able to finance closing costs
and the up front mortgage insurance premium into the mortgage.
- The project must be approved by HUD for it to
be eligible for insurance.
- The maximum mortgage amount for a single family
residence is $333,600, with adjustments for certain geographic
locations.
Single
Family Adjustable Rate Mortgage
The
purpose of this loan program is to allow a borrower to purchase
or refinance a primary resident at a lower initial interest rate.
The mortgage loan is funded by a lending institution, mortgage
company or savings and loan and is insured by HUD
- The borrower is eligible for approximately 97%
financing. Borrowers are able to finance closing costs
and the up front mortgage insurance premium into the mortgage.
- ARM's can only be used with 203(b), 234(c) and
203(k) loan programs.
- The index used to determine the interest rate
is the One Year U.S. Treasury Security.
- The maximum mortgage amount for a single family
residence is $333,600, with adjustments for certain geographic
locations.
Energy
Efficient Mortgages
Energy
Efficient Mortgages provide the borrower to purchase or refinance
a primary residence and incorporate the cost of energy efficient
improvements into the loan amount. The mortgage loan is funded
by a lending institution, mortgage company or savings and loan and
is insured by HUD
- The borrower is eligible for approximately 97%
financing. Borrowers are able to finance closing costs
and the up front mortgage insurance premium into the mortgage.
- Eligible properties are 1-2 unit existing homes
and new construction.
- The cost of the energy efficient improvements
that may be eligible for financing into the mortgage is the
greater of 5% of the property value, but not greater than $8,000,
or $4,000.
- To be eligible for inclusion into the mortgage,
the energy efficient improvements must be cost effective - meaning
that the total cost of the improvements is less than the total
present value of the energy saved over the life of the improvements
made.
- The cost of the energy improvements and estimate
of the energy savings must be determined by a home energy rating
system (HERS). Up to $200 of the cost of the report may
be included in the mortgage.
- The maximum mortgage amount for a single family
residence is $333,600, with adjustments for certain geographic
locations.
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