Federal Housing Administration (FHA)

[seneca]

How can federal agencies like FHA help in our mortgages? What other roles does it play?

[tiara]

If you cannot come up with the required downpayment for a conventional mortgage, the Federal Housing Administration (FHA) insures mortgages for up to 97% of the appraised value. A big advantage of the FHA mortgage is the small downpayment of 3 to 5% but the FHA rate is adjustable.

[seneca]

I did some research on my own and here are a few ceveats:

Properties owned for less than 90 days are not eligible for FHA financing. Properties owned between 90 to 180 days will be subjected to a mandatory second appraisal if the new sales price exceeds the previous sales price by 100%.

[tiara]

Properties owned less than 1 year will be subject to additional underwriting scrutiny and possibly a second appriasal if the new selling price execeeds the previous one by 5%.

[admin]

Originally Posted by tiara

If you cannot come up with the required downpayment for a conventional mortgage, the Federal Housing Administration (FHA) insures mortgages for up to 97% of the appraised value. A big advantage of the FHA mortgage is the small downpayment of 3 to 5% but the FHA rate is adjustable.

Sorry tiara but your post is inaccurate and needed to be corrected. FHA mortgages have fixed rate options as well as adjustable.

[MichaelG]

I have done FHA and 100% financing before. I prefer 100% financing if you excellent credit score. FHA requires mortgage insurance if your loan to value is greater than 80%. Mortgage insurance is actually quite expensive. More than home owners insurance.