FHAFHA ... Becoming Popular Way to Finance a HomeFHA financing — used sparingly for home buying 3 years ago — now encompasses 39% of USA home sales.

It used to be that many FHA borrowers were considered on the lower end of the financing spectrum, and FHAwas used primarily by first-time buyers. Not today. Many FHA home loans now are used by repeat buyers, andreach the maximum loan amount (see below). FHA’s popularity is expected to grow even further!

Why the big shift? Simply put, Attractive Loan Terms:

3.5% down payment with FICO score of 580 or higher

(10% down payment for FICO less than 580)

30-year, fixed rate loan

Closing costs range from 2% to 3% of loan value

(Seller may contribute to closing costs)

Often times, it’s easier to qualify for an FHA home mortgage over a conventional loan. That’s because FHA loansare insured by the government, making your application more attractive to lenders.

FHA home mortgages aren’t just for first-time home buyers. They’re also used by move-up buyers. Furthermore,FHA refinance loans can help people get out of debt situations caused by sub-prime mortgages with interest ratesthat have increased. Are you facing default or foreclosure on a conventional loan? FHA home mortgage refinanc-ing is valuable for those who want to keep their homes and prevent damage to their credit ratings.

The FHA also provides cash-out refinancing for those who need financing for things such as college or majorhome improvements. An FHA cash-out refinancing mortgage may offer lower interest rates than traditional homeequity financing loans.

FHA mortgage loans should take up no more than 31% of your gross monthly income. A loan officer willask for verification of your income to make the calculation. While some people were able to get conventional loansusing “stated income,” requirements for FHA purchase mortgage products require copies of your income taxreturns to verify the actual amount of money you report to the government. If your job situation has changed sinceyour last tax filing, you may be able to furnish proof of income through your new employer.

FHA home loans have requirements for income, debt-to-income ratios, maximum loan amounts and other details;each type of FHA loan is unique and must be applied for individually. Have your REALTOR ask your lender forassistance in learning which FHA mortgage is right for you.

Maximum loan amounts vary by each county in the nation. Here are the maximums for single-family homes inselected counties in the Greater Cincinnati region:

—— $337,500 FHA Maximum Mortgage ——

OH counties — Hamilton, Butler, Clermont, Warren & Brown

KY counties — Kenton, Boone &Campbell

IN counties — Dearborn & Franklin Ripley ($271,050)

OH counties — Montgomery ($271,250); Clinton & Highland ($271,050)

For all other counties and 2-4-family units, go to FHA.com.

Amounts are proportionately higher for 2- to 4- family units.__________________________________________________________________________________

FHA.com and HUD.gov are popular web sites that have all kinds of additional information relating to

FHA loans, or call HUD at 800-225-5342.__________________________________________________________________________________

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