FHA Quick Points
FHA maximum loan limits:
(as of 4/6/15)
Single Family Residence: $271,050
2 units: $347,000
3 units: $419,425
4 units: $521,250
- 3.5% minimum down payment
- 640 minimum credit score
- Gift funds allow for 100% of down payment
- Up to 6% allowed in seller credit towards closing cost & pre-paid items
(pre-paid items include upfront insurances and taxes) - Up-front MIP of 1.75%
- Monthly MIP of 1.35%
- (monthly MIP varies based on LTV and loan term)
Loan Amount Calculation Example:
Sales Price = $271,050
96.5% Base Loan Amt = $261,563.25
1.75% up-front MIP = $4,577.36
FHA Property Condition – Tips on what to look out for
Roofing
- Evidence of deterioration (missing tiles, shingles, flashing).
- Signs of leakage observable from the ground.
- Stains on the ceilings.
- *HUD/FHA requires that the roof have at least 2 years remaining life. If the roof has less than 2 years remaining life, then the appraiser must call for re-roofing or repair. The condition must clearly state whether the subject is to be repaired or re-roofed. FHA will accept a maximum of 3 layers of existing roofing. If more than 2 layers exist and repair is necessary, then all old roofing must be removed as part of the re-roofing.
- **All such roofs require inspection. Inspections must estimate life expectancy of the roof to be at least 2 years.
Foundation
- Obvious significant variations that are noticeable visibly (determined by appraiser…there is no specific # to go by).
- Significant cracks or erosion in exposed areas that affect structural soundness
Blocked or inadequate access to crawl space on raised homes (clear obstructions and critters).
Structural conditions
- Significant cracks, evidence of water damage, or spongy/weak/rotted flooring in the floor support systems.
- Significant cracks, visible holes, and significant water damage in the framing/walls/ceiling that could affect the structure.
Mechanical Systems
- Appraiser will check functionality of systems.
- All Utilities must be on at time of appraisal.
- Furnace/Heating System – NO floor furnaces; MUST have a heat source; if space heaters are in use they must be “oxygen depletion”.
- No Air Conditioning is required and window units are allowed. If central air, unit must be functional with cold air and no significant holes or deterioration on the unit.
- No exposed or frayed wiring or presence of sparks or smoke.
- Water pressure will be checked for plumbing to toilets and sinks/baths for no significant drop or limitation in pressure.
- Evidence of damage due to leaks.
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Lead Based Paint Hazard
- No cracking or peeling paint on the exterior or interior.
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Wood Destroying Insects
- Obvious infestation from wood destroying insects. Visible damage?
- *Termite certificate not required unless appraiser requires it. If required then a letter from a contractor is to be provided stating: 1) Damage is minor; 2) No repairs required; 3) Damage doesn’t affect the structural integrity of the home. This must be signed and on letterhead with their license # included.
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Other Health and Safety Deficiencies
- No visible mold.
- Broken window panes or inoperable windows. Also, “all” or “no” window screens.
- Broken or missing stairs.
- Steps without handrails.
- Broken or missing exterior doors.
- Inadequate/blocked entrances or exits.
- No bars on the windows and doors that restrict access in or out of home.
VA Quick Points
Conforming Loan Limits Apply $417,000
Non-conforming Loans over $417,000 allowed with down payment of 25% of the guarantee difference.
- $0 down payment – 100% financing
- 620 minimum credit score
- Gift funds allow for 100% of down payment
- Up to 4% allowed in seller credit towards closing cost & pre-paid items
(pre-paid items include upfront insurances and taxes) - NO monthly mortgage insurance
- Non-Occupant Co-Borrowers not allowed
- Non Veteran Co-Borrower only allowed if the non-veteran is the spouse of the veteran
VA Funding Fees
(Financed into Loan Amount)
First Time Use – Less than 5% down:
Veteran = 2.15%
Reservist / NationalGuard = 2.4%
Subsequent Use – Less than 5% down:
Veteran OR Reservist / National Guard = 3.3%
