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The FHA Program Revisited

Posted on April 02 By MLP Lending Guide

The Federal Housing Administration has been helping people become homeowners since the 1930s. In the 1980s the FHA became known for its bureaucratic tendencies and fell out of favor with the public. Instead many borrowers turned to private lenders who reaped the rewards of charging higher interest rates on subprime loans. Recently, however, as subprime lending practices are coming under increased scrutiny, many have turned, once again, back to the FHA for their loans.

There are a number of advantages to obtaining an FHA backed loan. Chief among them are the less stringent credit requirements. By looking at the "total scorecard" the FHA looks at not just an applicants full credit report, but also employment history, and how well one has paid utility and rent bills. Another plus is that the FHA wont automatically disqualify for having filed bankruptcy.

Unfortunately, there currently are a few drawbacks to FHA loans, although legislation has been put into action in Congress to alleviate some of these issues.. The loan limit for an FHA loan is modest to say the least at $363,000, although this might change in the near future. Unlike "no down payment" plans public lenders offer the FHA requires a down payment, typically at least 3 percent of the total loan. The longer application process and heavy bureaucracy is still around, but as more and more borrowers turn to them, the FHA has responded by quickening the process. Legislation has being introduced in the House of Representatives and the Senate to increase the loan limit to $417,000, to revoke the down payment requirement for borrowers and allow for 40-year mortgages.

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3 Responses to "The FHA Program Revisited"
  1. milestone 19, Jun, 2011

    Instead many borrowers turned to private lenders who reaped the rewards of charging higher interest rates on subprime loans. Chief among them are the less stringent credit requirements. Thanks for giving me one sliver of shining ligh IF I file. The other thing to make note when you are looking at a bad credit refinance is that you need to state your case in terms of the bank.The printing market along with the internet have turn out to be so meticulously associated that its success right now mainly depends upon effective online marketing and advertising, and utilization of several web services, to move the printing media on the net, and make its existence additional world-wide. The via the internet publishing business, in light connected with Printplace, continues to sparkle, regardless of the odds against it through recession. The printing and publishing industry as seen with online printing coupons generally came forth unaffected, as it received an on the web profile that made possible it to endure the bigger component of cuts, and be a huge success with global viewers. Though sending the books to international areas seems to have suffered, trading these products on line within the form of e books has risen to be alot more financially permanent and less complicated. However, a large component of the inhabitants nonetheless likes to maintain the ledgers and be connected in its pages, as opposed to scan on-line.

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  2. Gregory Despain 05, Dec, 2009

    So what does that mean? If the underwriters believe that the person with the bad credit can make payments, they may refinance with no closing costs. The other thing to make note when you are looking at a bad credit refinance is that you need to state your case in terms of the bank. Nevada, California, Arizona, and Florida are particularly hit hard. I don't want to come to an abrupt ending and also you know, curiosity killed the cat. Part of the problem that has been created was due to the sub prime crisis that was created when major banks started to issue lots of risky credit, and then insured those loans with credit default swaps.

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  3. Eric 14, Apr, 2007

    My businees just failed and I'm in a position of having to consider bankruptcy. Thanks for giving me one sliver of shining ligh IF I file. I guess SOME time in the future I can still be eligible for a home loan!

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