FHA loan limits are higher for 2006 in King and Snohomish Counties. The new limits are:

One person family       $356,250

Two person family       $401,250

Three person family    $487,500

Four person family      $562,500

Long ago, the Federal Housing Administration was formed to help Americans with average or below average income enjoy the benefits of home ownership.   Contrary to misconception, the FHA doesn’t lend money. They insure loans made by other lenders. 

Currently, FHA is a niche market.  Sellers usually reject FHA deals because they are slower to close and require more from the seller.  Plus, a buyer with good credit can often get a better deal from the private sector.   The appraisals can be difficult to schedule and hold the homeowner to a higher standard than non-FHA loans.  FHA loans have qualifying ratios of 29% for housing and 41% for total indebtedness on existing construction; 31% for housing and 43% for total indebtedness on new construction.  Non-FHA lenders typically allow qualifying ratios of 40%, 45%, 50% or even 55% for total indebtedness.  Here are advantages. 

ADVANTAGES OF FHA LOANS

·         Lower required down payment

·         FHA loans are assumable* with a qualified borrower

·         More flexible underwriting standards

·         Gift funds for down payment and closing costs are allowed

·         Up-front Mortgage Insurance Premium can be financed

·         Less cash out of pocket required

·         The lowest down payment (as low as 3%, never more than 5%) requirement of any non-subsidized financing program

·         Non-occupant co-borrowers are allowed for qualifying purposes

·         Charges on conventional loans such as tax service fees, underwriting fees, copy & courier fees are not allowed to be charged to the buyer with FHA loans

·         With FHA’s no cost streamlined refinancing you can lower your payment at NO COST to you. Usually, closings can occur within 2-3 weeks.

·         Rehab your house with only one loan using the FHA 203K program

·         The FHA ARM has the best features on the market with a 1% annual interest rate cap and a 5% lifetime cap

Seattle Team Real Estate is associated with qualified mortgage professionals who can give you the latest information of FHA guidelines.  You may want to become familiar with newly proposed guidelines for FHA, which will help manufactured home buyers, zero down buyers, and buyers in high cost areas like the greater Seattle metropolitan area.