FHA loan question

R

RSweetman_IHB

New member
Hello:



Wondering if anyone has data that tracks the number of FHA loans at certain price levels in Orange County over the last 12 months. I'm specifically interested in the price ranges of $500K to $700K. I'm assuming that most folks looking to purchase homes in this range are doing so with 10 to 20 percent down vs. the 3.5% allowed on the FHA product. Are there really any homes being bought at $729,000 in Orange County with 3.5% down?



Great board by the way. Keep up the good work.
 
Yes. Believe it or not there are many high priced, highly leveraged properties financed with FHA loans. Almost anything financed with 10% down or less is FHA today. As for statistics, you'd have to go through DataQuick or other resources.



As a side note, I'm curious what the delinquency rate is for 2008 vintage mortgage loans. Wonder if tighter guidelines have ferreted out the bad actors out there. It's doubtful, even after you assume some defaults due to the bad economy.



My .02



Soylent Green Is People.
 
I just learned of this today, maybe this is what is causing the spike in Irvine home sales.

3.5% down on a 600k home with a decent rate, is not a bad deal!
 
I've read about FHA but would like additional info on it. What are the qualifications? 3.5% downpayment sounds low to me. Why would the federal gov't allow this? Seems like the Fed would want to avoid defaults by raising the downpayment minimum. Is there a limit on the loan amount? I know there are others on IHB who have already applied. I would like to know and learn from their personal experience.



TIA
 
I went to the FHA website and did a little bit of research myself. The loan amount is based on household income and liabilities. I am in the market for a entry place preferably 3 bdrm but am willing to settle for 2 bdrm if the price and location is right. Based on all the readings I've done on IHB, I will seriously start looking at housing market either winter '09/'10 or early spring in '10
 
[quote author="Irvinian" date=1247629590]What are the qualifications? 3.5% downpayment sounds low to me. Why would the federal gov't allow this? Seems like the Fed would want to avoid defaults by raising the downpayment minimum.</blockquote>


You have identified one of the major problems with stabilizing the housing market. People with low down payments quickly default when they go underwater, so they (GSEs and FHA) would like to raise downpayment requirements; unfortunately, the more you raise downpayment requirements, the fewer the number of people who qualify. If you do not have enough qualifying people to absorb the supply, prices keep going down, and you get more defaults, so the market does not stabilize.
 
Today, I learned about the FHA 90 day "seasoning" requirement. If a home has changed hands within a 90 day window, a potential buyer cannot get an FHA loan for that property. The intent, as explained to me, is to stop/prevent/slow flips. It was waived until 8 June 2009, so we're clearly outside that window now.



I haven't been able to figure out all the requirements - can someone point me in the right direction about whether or not it's been extended further, or there is a way to legally circumvent this requirement? TIA.
 
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