FHA LOANS

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FHA Loans

Prospect Mortgage is located at 15301 Ventura Blvd., Suite D300, Sherman Oaks, CA 91403. Prospect Mortgage, LLC is a Delaware limited liability company licensed by the CA Dept. of Corps. under CRMLA and operates with the following licenses: AZ Mortgage Banker License #BK0903027, #BK0909362, #BK0908046, #BK0908050, #BK0908056, BK#0908057, #BK0908058, #BK0908731, BK#0903112, BK#0903912, BK#0906650, BK#0906913; To check the license status of your CO mortgage broker, visit www.dora.state.co.us/real-estate/index.htm; GA Residential Mortgage License #16984; IL Residential Mortgage Licensee #6424; MA Mortgage Lender/Broker License #MC2011; MS Licensed Mortgage Co.; MT Residential Mortgage Lender Licensee #120; NV Division of Mortgage Lending Mortgage Banker #1173 and Mortgage Broker #3095; Licensed by the NH Banking Dept.; Licensed Banker-NJ Dept. of Banking and Insurance #9932415; Operates as Metrocities Mortgage, LLC in NY (Licensed Mortgage Banker—NYS Banking Department); OH Mortgage Broker #MB803629; OR Mortgage Lender Licensee #ML-2006; PA Dept. of Banking license #1740; RI Licensed Lender #20021343LL, Broker #20041643LB; licensed by the VA State Corp. Commission as MC-2195. This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. This is not an offer to enter into a rate lock agreement under MN law, or any other applicable law. 0509-48A

FHA LOANS

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What is an FHA loan?

Don’t they have a lot of restrictions?

Aren’t they just for rural areas?

Aren’t they only for first-time buyers?

What about all the paperwork?

Isn’t a “regular” loan better?

FHA Loans

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FHA Loans are an excellent solution in today’s market. Numerous buyers, properties and developments are eligible,

coast to coast Not limited to first-time buyers (although very popular

with first-timers) FHA Loans can take the place of other loan products

that have been eliminated or restricted– Low down payment– Credit issues

FHA Loans

FHA LOANS

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What is an FHA Loan?

A loan insured by the Federal Housing Authority (FHA),formed in 1934

Loan must meet FHA criteria (which are more flexible than other programs in many ways)

An approved lender provides the loan

FHA does not make loans itself

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Easier to qualify - Because FHA insures the mortgage, lenders are more willing to give loans with lower qualifying requirements

Less than perfect credit - Even with credit problems, such as bankruptcy, it’s easier to qualify for an FHA loan than a conventional loan.

Low down payment - Low 3.5% down payment; money can come from a family member, employer, gift, Down Payment Assistance Program or charitable organization.

Help you keep your home - Should you encounter hard times, FHA has many options to help keep you in your home and avoid foreclosure.

Why Ask for an FHA Loan?

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Other FHA Loan Benefits

Non-occupying co-borrowers – Occupying Borrower does NOT have to meet separate ratio guidelines with sufficient credit

2 years after BK, 3 years after foreclosure (if foreclosure is in BK must be 3 years from discharge) OK with good credit

Standard debt ratio 31/43%

Common sense approach toward values in declining market areas

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FHA Loan Amount Limits

Vary by area; check https://entp.hud.gov/idapp/html/hicostlook.cfm

One-unit limits range:

– New temporary limits are set per county

– Equal to 125% of the median home price or $417,000, whichever is greater

– Floor: $271,050

– Upper cap: $729,750

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Eligibility Requirements

All transactions must be owner occupied

Full doc ONLY

1-4 unit properties and FHA approved condominiums

U.S. citizens, permanent resident aliens and non-permanent resident aliens

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Eligible Properties

Single Family 2-4 Units Condos

– For list of approved condos visit website https://entp.hud.gov/idapp/html/condlook.cfm

Planned Unit Developments

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Cash to Close

Borrower must have a minimum of 3.50% down payment investment.

Acceptable sources of 3.50% borrower funds– Savings, checking, stocks

– Gift from an eligible donor (relative or significant interested parties)

– Down payment Assistance Program (DAP)

– Funds can be borrowed – must be fully secured by assets such as auto, real estate, 401k, etc. and must be included in DTI (except 401K)

NOTE: Seller-held second mortgages NOT allowed

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Down Payment Assistance (DAP)

Each state and community has their own programs.

For program availability in your state and community, Google . . .

– “Your State – Down Payment Assistance”

– “Your Community – Down Payment Assistance”

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Gift Programs

Documentation required by lender

Gift Letter

– Tax Exemption Status

– IRS Form 501C

– Copy of Wire Transfer

NOTE: Funds may never be used to pay borrower’s personal debts

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Why FHA Loans Are Good For Sellers (and Real Estate Agents)

Minimal mandatory seller payments (Tax service fee must be paid by seller - $85.00)

Paperwork and processing times similar to conventional loans

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Why FHA Loans Are Important Today

Not a loan product that will “disappear,” unlike:– Subprime

– High LTV

Interested Third Party (Seller, Agent and Lender) may pay up to 6% toward closing costs and prepaids

– Helps close deals in slower markets

More eligible buyers– Low down payment with financial assistance available

– Flexible credit requirements

– Flexible income requirements

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The FHA Game Plan

Focus real estate search

– Properties and areas with values within FHA loan limits

– FHA-approved condo projects or Spot Condo Approval

Work closely with your loan officer

– Assess borrower’s challenges/needs

– Identify and understand local DAPs

– Present sellers with facts and advantages regarding FHA loans

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Questions?

(LOAN OFFICER NAME) Loan OfficerDirect: 000.000.0000Cell: 000.000.0000LoanOfficer@prospectmtg.com

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FHA Loans

Prospect Mortgage is located at 15301 Ventura Blvd., Suite D300, Sherman Oaks, CA 91403. Prospect Mortgage, LLC is a Delaware limited liability company licensed by the CA Dept. of Corps. under CRMLA and operates with the following licenses: AZ Mortgage Banker License #BK0903027, #BK0909362, #BK0908046, #BK0908050, #BK0908056, BK#0908057, #BK0908058, #BK0908731, BK#0903112, BK#0903912, BK#0906650, BK#0906913; To check the license status of your CO mortgage broker, visit www.dora.state.co.us/real-estate/index.htm; GA Residential Mortgage License #16984; IL Residential Mortgage Licensee #6424; MA Mortgage Lender/Broker License #MC2011; MS Licensed Mortgage Co.; MT Residential Mortgage Lender Licensee #120; NV Division of Mortgage Lending Mortgage Banker #1173 and Mortgage Broker #3095; Licensed by the NH Banking Dept.; Licensed Banker-NJ Dept. of Banking and Insurance #9932415; Operates as Metrocities Mortgage, LLC in NY (Licensed Mortgage Banker—NYS Banking Department); OH Mortgage Broker #MB803629; OR Mortgage Lender Licensee #ML-2006; PA Dept. of Banking license #1740; RI Licensed Lender #20021343LL, Broker #20041643LB; licensed by the VA State Corp. Commission as MC-2195. This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. This is not an offer to enter into a rate lock agreement under MN law, or any other applicable law. 0509-48A