Yes you heard it correct for FHA 203b and FHA 203k …FHA has increased the area loan limits and now in the Dallas/Ft Worth area we are up to $310,500 for a one unit property. And that is not all … after January 26th FHA is lowering the amount of the monthly mortgage insurance premium. Currently the monthly charge is 1.35% but now will be a much lower .85%.
Let’s dig into the information regarding the monthly mortgage insurance first. FHA has published Mortgagee Letter 2015-01 implementing the reduced annual mortgage insurance premiums effective with FHA case numbers pulled after January 26th
The scoop from that letter is this :
Annual premium is reduced 50 basis points on both purchase and refinance transactions.
Applies to all FHA loans w/ terms greater than 15 years
No change to premium for loan terms of 15 yrs or less
Note : there is no change to the upfront mortgage insurance and the fact that the mortgage insurance will be on the loan for the life of the loan…unless a refinance of course to a conventional product at a later time.
So what can this means for buyers and the actual monthly mortgage payment? Take for instance a home in Texas that a buyer wants to purchase and put the least down that the program allows which is 3.5% of the pruchase price. Currently the monthly mortgage insurance factor would be 1.35% …but after January 26th that amount is going down to .85%. On a $200,000.00 loan amount that is a savings of about $84.00 per month!!
And just to be clear this applies for the traditional FHA 203b loan and the amazing FHA 203k loan as well. So buy a move in ready home and you now have more purchasing power due to the higher area loan limit and the lower monthly mortgage insurance …or buy a home that needs a little or allot of TLC using the FHA 203k loan!
If all of the above is not enough for you to be interested in FHA financing….well I have more information to share. At HomeBridge we are now offering FHA loans to borrowers who have a minimum middle fico score of 600. There will be a few things we will want to see including a couple of months of mortgage payments are set aside and a maximum debt to income limit of 45%. We are offering these loans with the minimum down payment of 3.5%! Typically the minimum credit score we would allow would be 640 but with a few overlays we can now accomidate the lower tierd scores as well.
Call me today to get all of the information for financing your next home!