FHA (Federal Housing Administration) loans are attractive to home buyers in NH and MA because FHA loans offer flexibility
Limitations
- Because FHA loans are not limited to first time home buyers, more people qualify.
- Since there are no income limits with FHA loans, more buyers are eligible.
- Loan Limits Apply county by county for all States. This link brings you to FHA’s site which shows all loan limits.
- See Chart below for NH loan limits.
Down Payment & Required Cash
- Required down payment is 3.5% of the sales price.
- Seller can pay all closing costs and prepaid expenses associated with a purchase therefore reducing the buyer’s upfront cash outlay
- Seller paid closing costs are called “seller concessions”
- Seller concessions must be negotiated into the contract
- Seller concessions are limited to the lesser of actual expenses or 6% (whichever is less).
Note: typical closing costs run about 4% of the sales price
FHA Mortgage Insurance
- Upfront MIP (Mortgage Insurance Premium) is based on loan term, case assignment date, loan amount and down payment
- for most 30-year fixed rate loans, the Upfront MIP is 1.75% upfront fee (can be financed into the loan)
- restrictions to the mortgage amounts and LTV’s are based on the loan amount prior to the financing of the Upfront MIP
- FHA also has an annual MIP
- for most 30-year fixed rate loans with maximum financing the annual premium is .55%
- the annual premium is paid monthly and calculated as follows:
base loan amount X the premium (55%) divided by 12 = monthly FHA premium
Qualifying for an FHA loan
- Minimum of 500 credit score required for FHA loans
- FHA loans are put through automated underwriting.
- Automated underwriting will either have an “Accept” or “Refer” finding.
- If the loan is approved “Accept” then the automated findings will dictate underwriting requirements
- For loans that are Refer through automated underwriting, a manual underwrite is required and you can expect more/additional requirements
- Borrowers without a credit score can be approved through a manual underwriting process if the borrowers meet non-traditional credit requirements
- FHA can be combined with NH Housing and down payment assistance
- FHA loans are available for 1 – 4 unit owner occupied properties
- Complete FHA Guidelines Available via this link
FHA loans for condominiums
- FHA loans can be used to purchase FHA approved condos
- If your condo is not FHA approved, Renee Duval can assist you in submitting your condo to FHA for approval
FHA renovation and using FHA for new construction
- renovation funds are available thru the FHA 203K standard programs.
- All required docs and more details can be obtained by contacting Renee Duval
- click here for more info on FHA renovation/203K loans.
- FHA new construction with less than 10% down requires the builder to provide additional documentation
Contact us today for more information about FHA loan programs
Bookend Lending is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency.
FHA Loan Limits in NH
Most Counties in NH the max FHA loan for a single family home is $498,257
For Strafford and Rockingham Counties the max FHA loan is $862,500
Note: 2, 3 and 4-family homes have higher sales price limits