General information you may not have known about FHA
- FHA mortgages are not government loans. The lenders that issue FHA loans are approved vendors of FHA, government backed, loans.The lowest amount you can put down is 3.5% of the sale price of the home. There are no more seller assisted down-payment programs
- NOTE – There could be additional requirements in addition to FHA (government) your lender. Make sure to ask about “Investor Overlay” to discover what the differences are between FHA and your lenders guidelines before you do business.
- FHA loans are assumable– that means that a home buyer who finances the purchase with an FHA-insured loan and who sells the house later, when interest rates are higher, will be able to offer a potential buyer the right to assume his low-rate FHA loan.
- MIP– Mortgage Insurance Premium(as of April 9, 2012)– when buyers are approved for FHA loans, they are required to carry mortgage insurance. MIP payments go into an escrow account set up by the U.S. Treasury Department and the funds are used to protect the government in case the borrower defaults on the FHA loan.
- Up-front MIP (UFMIP) – The Upfront This is collected in a lump sum when the home is closed and is normally rolled into the mortgage amount (in addition to the mortgage for the sale price of the home) – The current rate is 1.75%
- Annual MIP – is paid monthly, ranges from 0% to 1.6% depending on the mortgage – see how to calculate
The Annual MIP schedule for FHA loans with terms greater than 15 years (e.g.; 20-year fixed FHA, 30-year fixed FHA) is as follows :
- For loans with LTV greater than 95 percent : 1.250% percent annually
- For loans with LTV less than, or equal to, 95 percent : 1.200% percent annually
The Annual MIP schedule for FHA loans with terms less than or equal to 15 years (e.g.; 15-year fixed FHA) is as follows :
- For loans with LTV greater than 90 percent : 0.600% percent annually
- For loans with LTV less than, or equal to, 90 percent : 0.350% percent annually
- For loans with LTV less than, or equal to, 78 percent : No annual MIP required
NOTE: Beginning with FHA Case Numbers assigned on, or after, June 11, 2012, all FHA mortgages for which the loan size exceeds $625,500, an additional 0.250% will be applied to the annual MIP schedule.
- FHA Gift Registry Program – assistance with downpayment – “203B”. This program allows you to collect interest on the donations of family and friends. They can deposit the money directly into the account, or they can provide you with a check to deposit yourself. Per FHA standards, such gift donations can be counted as “cash” for a down payment on a home. All FHA approved lenders are eligible for the program
- FHA Buy & Repair Program- 203K – provides additional funds for repairs after the purchase – more information
Additional Resources for Home Buying Assistance in Austin, TX
Housing counseling agencies – free and/or low-cost counseling services for buying, renting, defaults, foreclosures, credit issues and reverse mortgages
Predatory lending – if you’re buying or refinancing your home; don’t become a victim of unfair lending practices
Other Texas Resources
Link to HUD site for TX