FHA Revisited
The first in a series of commentaries on timely subjects relating to the housing market from EZdigs.com
With the sub-prime meltdown hundreds of popular loan programs have been cancelled virtually overnight. These programs were risky loan programs and Wall Street finally said, “No thanks”. For many borrowers however this was the only way to achieve the American dream of home ownership. Buyers who were self employed and didn’t have perfect credit could obtain zero down stated income loans. Life was good.
The news isn’t all bad however. Remember the FHA loan program? The one where you need to put 3 percent down and some or all of the down payment can be borrowed or gifted? You know; the loan program where you can use the income of a non-occupant co-borrower or co-signer to qualify? The sub-prime shakeout is sure to lead to the rise in popularity of the FHA loan. It’s really the only option left for the buyer with little or nothing to put down on a home.
Here are some of the benefits of the FHA loan:
• Only 3% down payment
• All or some of the 3% down payment can be gifted; gifts can come from non-profit agencies, family members or lifelong friends.
• Relatives or life-long friends can co-sign in which case the lender will use co-signer’s income to qualify even if they live on the other side of the country.
• Lenient debt to income ratios.
• You can use non-traditional credit like your car insurance or water bill for credit.
• No credit score requirements
• Low rates so you qualify for more Home
How can they do it? The same way they have been since 1934. The FHA or Federal Housing Administration is part of HUD which is short for the Department of Housing and Urban Development. According to HUD’s website the FHA insures the loan so the lender can offer homebuyer’s a better deal.
So, is the FHA loan the silver lining to the mortgage market fallout? It may be – especially with the onset of the discount real estate brokerages such as EZdigs, Redfin, Zip Realty and others. Many discount real estate brokerages will credit a portion of their seller paid commission to their buyer’s at closing. This can help offset closing costs. So combine the benefits of FHA financing with an experienced discount buyer’s agent and zero down purchases are once again possible.
Author
Mike Satterlee is president and broker of EZdigs.com. Written with the assistance of Tryg Satterlee, president of West Horizon Financial, an FHA-approved mortgage company.
About EZdigs.com
Headquartered in Kirkland, EZdigs was incorporated as a limited liability company in June of 2006 to address a growing need in the real estate industry: To keep the cost of home ownership affordable and accessible. Mike Satterlee, the company’s president, chief executive officer, and principal broker, founded the company after working in several different sides of the industry, including production homebuilding, development, finance, construction, and real estate. His experience provides a unique knowledge and informs his understanding of the marketplace. The company also provides industry intelligence, monitoring the market daily and providing periodic new construction and resale reports. Additional information may be found at www.ezdigs.com or by calling 425-577-4295.
Note to editor: All or part of this commentary may be excerpted for publication. You may op-out by responding to this e-mail with “no thanks” in the subject line. If someone else in the newsroom should receive this, please feel free to pass it on.
Thank you,
Mike Satterlee
President/Broker
EZdigs.com
Phone: 425-577-4295
Fax: 425-650-6788
E-mail: msatterlee@ezdigs.com
