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FHA / VA

17 Years of Experience | Uptown | Garden District Real Estate

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.
  • Lead Based Paint Hazard

  • No cracking or peeling paint on the exterior or interior.
  • 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.
  • 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%

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