Sunday, June 12, 2011

FHA Loans Becoming Popular at Orange County CA

I like the Paul Scheper article "FHA Loans becoming popular in Orange County" in this month's Orange County REALTOR® magazine, which was published by the Orange County Association of REALTORs®.  

FHA logo Paul says in his article that FHA loans have emerged as loan of choice for many Orange County buyers, as much as 38% of the home purchase market.  There are reasons:

Reason 1:  Ease of Qualifying (no Fannie Mae loan delivery adjustments, credit score of 740 not required)

Reason 2:  Higher Loan Limit extended through 2011 ($729,750 in Orange County)

Reason 3:  Lower down payment at required (as low as 3.5% might be moved to 5% minimum down payment)

Reason 4:  Lower minimum credit score  (FHA will consider FICO score down to 620) FHA logo

Reason 5:  Co-signers are OK  (not allowed by Fannie Mae)

Reason 6:  Seller can offer the buyer closing costs credit (up to 6% of buyer closing costs as credit back to buyer)

Reason 7:  FHA is "Back to Basics" loan - (fixed rate loan, nothing fancy, no teaser rates, no gimmicks, no-prepayment penalties)

Paul is probably right when he encourages people to consider FHA loans as possibly suitable and that they should be compared to conventional loans in an "apples to apples" way.

A reader reminded me by comment separately that people who want FHA loans on condo homes or those at planned unit developments will expect challenges with its requirements on number of owner occupied units and HOA delinquencies.


Source is Paul Scheper, licensed professional real estate mortgage broker in Orange County, CA -

Harrison K. Long - solutions for real estate and business - REALTOR® and broker associate, GRI - Coldwell Banker Residential Brokerage - 949-854-7747 (phone) - - CA DRE 01410855 - SFR short sale and foreclosure resource certified by the National Association of REALTORs®

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