Www.fha.gov FHA Update Florida Association of Mortgage Brokers June 10, 2009 Anthony Britto Sr. Account Liaison FHA - Office of Business Development 305.520.5024

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FHA UpdateFHA Update

Florida Association of Mortgage BrokersJune 10, 2009

Anthony BrittoSr. Account LiaisonFHA - Office of Business [email protected]

FHA - Serving FHA - Serving Homebuyers Since 1934Homebuyers Since 1934

www.fha.gov

Welcome to FHAWelcome to FHA

An FHA-insured mortgage is a viable option for many buyers. A mortgage product tailored to the buyer's needs benefits everyone…

The homeowner can afford the payments The homeowner is happy and satisfied A happy homeowner refers family and friends

to you, their real estate agent

1-800-Call FHA1-800-Call FHA FHA - Serving FHA - Serving Homebuyers Since 1934Homebuyers Since 1934


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FHA OverviewFHA Overview

FHA was established in 1934 and became a part of the U.S. Department of Housing and Urban Development in 1965

FHA is the U.S. Government’s largest insurer of loans - 4.7 million loans

FHA offers mortgage insurance to protect lenders in event of borrower default

The insurance protection allows lenders to originate mortgages to those who may not qualify under conventional guidelines

FHA does not:

Originate, close, fund, or service loans

Set the interest rate

Determine fees and charges

Have income limits


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What About FHA Loans?What About FHA Loans?

Let FHA Loans Help You & Your BuyerFind an FHA-approved Lender- http://www.hud.gov/ll/code/llslcrit.cfmFHA Maximum Mortgage Limits- $423,750- ML 09-07FHA-approved Condominiums-https://entp.hud.gov/idapp/html/condlook.cfm


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Advantages for BuyersAdvantages for Buyers

Smaller Down Payment – 3½%Flexible Down Payment SourcesNo Maximum Income or Sales Price Limits – (Subject to Maximum Loan Limits)Buyer doesn’t need to have perfect creditNo Prepayment PenaltyLoss Mitigation options



www.fha.gov FHA - Serving FHA - Serving Homebuyers Since 1934Homebuyers Since 1934

FHA BenefitsFHA Benefits

Fully Amortizing Loans – Fixed & ARMAutomated and Manual UnderwritingTraditional and non-traditional creditDown Payment – can be Gifted or Borrowed6% Max. Seller Paid Financing Contribution (C-C’s, Prepaids, Points, I/R Buydowns, UFMIP)Assumable loan – credit qualifying after 12/1/1986Ability to Streamline Refinance without Credit QualifyingLoss Mitigation options

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Borrower Borrower CharacteristicsCharacteristics

Owner-Occupant onlyCo-borrowers (occupying and non-occupying)Co-signersCitizenship not required; SSN is requiredNo maximum ageNo income limits


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FHA Modernization Legislation

Housing and Economic Recovery Act of 2008

Changed Down Payment – 3½% (Loan Amount is 96.5% of SP or Appraised Value, whichever is less)Cannot finance Closing CostsPremium Pricing can be used to pay C-C’s and prepaidsEliminated Seller-funded Down Payment AssistanceMoratorium on Implementation of Risk-Based PremiumsNew Upfront MIP – 1.75%Annual Prem. - >15 yr - .5% LTV ≤95%; .55% LTV >95% - ≤15 yr – 0% LTV ≤90%; .25% LTV >90%


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Sample Calculation - Sample Calculation - BasicBasic

Sales Price: $218,000 Appraised Value: $220,000

Max. Mortgage: $218,000 x 96.5% = $210,370 Down Payment: $218,000 – 210,370 = $7,630

Upfront MIP: 1.75% x $210,370 = 3681.48 Total Loan Amount : 210,370 + 3,681 = 214,051

Note: The maximum mortgage shown does not consider any closing costs that must be paid by the borrower.


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Sample Calculation – Sample Calculation – Inducement to PurchaseInducement to Purchase

Sales Price: $218,000 Appraised Value: $220,000 Gift Card: $3,000 Adjust. to SP: $218,000 - $3,0000 Max. Mortgage: $215,000 x 96.5% = $207,475 Downpayment Calc.: $218,000 - $207,475 - $10,525

The gift card value provided by the seller must be subtracted from the Sales Price (SP). Sellers are still permitted to provide seller financing concessions up to 6% of the SP. Other inducements to purchase must be subtracted from the SP or Value when calculating the max. mortgage amount/downpayment.


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Condominiums- Still in processTax Credit- ML 09-15HECM for Purchase- ML 08-33HECM Maximum Loan Limit - $625,500HECM Counseling Requirements- ML 08-28Independence of HECM Mortgage Originators

Prohibition against requirements to purchase additional products as a condition for HECM

eligibility


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Energy Efficient Mortgages Mfg. Housing (Title I)– Raised Maximum Mortgage amounts to: - $25,090 for Repair/improvements - $69,678 Unit - $92,904 Unit and Lot - $23,226 Lot only

Indexed to adjust limits



What This Means for What This Means for YouYou

Larger Loan Amounts, Higher Sales PricesClient and Market Expansion

More opportunities for the IndustryMore business for you!

More Options for More ConsumersMore Sensible Mortgage ProductsSimplification of Lending Process


FHA ProgramsFHA Programs

• Fixed Rate/ARMs

• Purchase• Refinance• Rehabilitation

StandardStreamline

HECM for Purchase (Reverse Mortgage)Energy Efficient MortgageHUD Homes

Good Neighbor Next Door

ManufacturedHousing-ML 09-

16


Rehabilitation Rehabilitation MortgagesMortgages

Standard

Repairs/Improvements must be at least $5000Consultant requiredArchitectural Exhibits required

Borrower can make repairs/improvements if qualified

Streamline

Facilitate uncomplicated repairs/improvementsNo consultant requiredNo architect requiredBorrower can make repairs/improvements if qualifiedInclude up to $35,000


HECM for PurchaseHECM for Purchase

Borrower – seniors age 62 or betterReverse Mortgage counseling requiredProperty – 1-4 family dwellings, existing onlyOwner–Occupied only; within 60 days from closingAt closing, only the HECM 1st & 2nd liens allowedFHA’s Property Flipping prohibitions applyAt closing, buyer must provide monetary investment equal to difference between HECM principal limit and sales price, plus HECM loan related fees not financed or offset by other allowable funding sources


HECM for PurchaseHECM for Purchase

Appraised Value/Max. Claim Amt.* $300,000Sales Price $300,000Principal Limit** $199,500Minus Loan Fees ($15,500)Avail. HECM proceeds $184,000Required cash investment $116,000

*AV/MCA is the MCA used to determine the principal limit which is the lesser of the appraised value or the FHA national mortgage limit. The principal limit is the max. amount available to the HECM mortgagor.

**Assumes the age of the youngest borrower is 67 and a principal limit factor of .665 for a 5% expected average interest rate.

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Energy Efficient Mortgage Program (EEM)

Eligible for new or existing 1-4 family unitsMaximum Loan in Area Can Be Exceeded by the EEM AmountEligible for use with Rehabilitation Mortgages (203K)Available for Condos and Manufactured HomesCost of improvements that may be eligible for financing is either 5% of the property’s value (not to exceed $8,000) or $4,000, whichever is greater.


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Selling HUD HomesSelling HUD Homes

What are HUD Homes?Register to Sell HUD HomesElectronic Internet BiddingCurrent Listings Management & Marketing Contractors (M&M)


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What Are HUD Homes?What Are HUD Homes?

HUD-owned houses are often referred to as “HUD Homes.” HUD Homes are houses that had an FHA-insured mortgage and the homeowner defaulted. The lender then deeded the home to the Secretary of HUD in exchange for an insurance claim payment.


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It’s Easy to Sell HUD It’s Easy to Sell HUD Homes Homes

Brokers can register with HUD’s M&M Contractor for Florida properties, NHMS, through their website, www.nhmsi.comOnce completed, the broker can show, advertise, and submit offers on HUD HomesHUD pays the broker a commission of up to five (5) percent HUD-registered brokers and their agents are able to submit bids 24/7 over the Internet. Electronic bidding is the only method to submit bids for HUD Homes


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Management & Management & Marketing ContractorsMarketing Contractors

• M&M contractors manage and market single-family properties owned by, or in the custody of, the Department

• The geographic service areas covered by each of the M&M contractors, their mailing addresses, telephone numbers, fax numbers, and internet addresses are provided on the HUD website


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Current ListingsCurrent Listings

Listings of HUD Homes are available through:

www.hud.gov/homesMLSM&M Internet siteswww.homesales.gov



Help for Your BuyerHelp for Your Buyer

HUD Home Buying GuideHousing CounselingIncreased FHA Mortgage Loan Limits

Broward, Miami-Dade, Palm Beach1 Unit - $423,7502 Units - $542,4503 Units - $655,7004 Units - $814,900

https://entp.hud.gov/idapp/html/hicostlook.cfm

www.fha.gov1-800-Call FHA1-800-Call FHA FHA - Serving FHA - Serving Homebuyers Since 1934Homebuyers Since 1934

Helpful Resources – Helpful Resources – fha.govfha.gov


www.fha.gov1-800-Call FHA1-800-Call FHA FHA - Serving FHA - Serving Homebuyers Since 1934Homebuyers Since 1934

hud.govhud.gov

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Contacting FHAContacting FHA

Websites FHA Call Center

www.fha.gov 800-Call FHA www.hud.gov Live Web Chatwww.espanol.hud.gov TBAwww.fhaoutreach.gov/fhafaq

Locate a Housing Counselor800-569-4287

To Sign Up on FHA’s List [email protected]

www.fha.gov

FHA’s Commitment to FHA’s Commitment to Our Real Estate Our Real Estate

PartnersPartners

FHA’s goal is to provide Safe and Affordable Mortgage Products that Support Sustainable Homeownership

FHA recognizes the Key Role the Real Estate Professional plays in the Mortgage Finance Industry

Thank you for Your ATTENTION!!!


Documents

Www.fha.gov FHA Update Florida Association of Mortgage Brokers June 10, 2009 Anthony Britto Sr. Account Liaison FHA - Office of Business Development 305.520.5024