With all of the talk lately about the new FHA Secure program, I just thought I would go over some of my favorite points about the pre-FHA Secure FHA Refinancing programs. There are many benefits for the consumer and even a few things that could help a real estate agent sell more properties. This highlights some ways a consumer can pull out equity through a cash-out loan to purchase an investment property with some of FHA's niches:
-A recently listed property does not immediately disqualify a borrower from refinancing their property. Many consumers are now deciding to take their home off the market and some are looking to pull out some equity, only to find out most lender guidelines frown on lending on recently listed properties. An FHA loan could be the answer.
-Cash-Out up to 95% on 1-2 unit properties and 85% on 3-4 unit properties, with no pricing hit! A client who has been a successful landlord with a 2-4 unit owner-occupied property could pull out some equity with an FHA loan to purchase an additional investment property.
-FHA loans have no minimum credit score requirement. A clean 12 month mortgage history is (almost always) required.
My Sitemap has more guidelines and information on how FHA loans work. Happy Selling!
Michael Byrne
Mortgage Specialist
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Vicky- True, the new FHA Secure Program and any other new programs will benefit many consumers. Regular FHA programs offer some great options as well.
Matthew-Very true. Also people (with recently listed properties) should not expect an appraised value higher than the list price for which they could NOT sell their home as well.
Michael, In my neck of the woods, FHA doesn't fit. With FHA limits at 362k, buyers have to move way inland to be able to qualify. This is also true of FHA Secure....Not really a benefit to people in high cost areas. I keep waiting to see what if any they will increase the loan amounts to.
Good post!
A co-worker recently closed an FHA Secure Loan and we have a couple of STreamlined 203k's in process.