A few notes from our FHA panel

Thanks to everyone who came out to our FHA panel discussion last week. For those of you who couldn't make it, here are a few quick bullet points that might interest you (in no particular order):

• Despite rumors to the contrary, the down payment for an FHA contract is not currently expected to increase.


• As a rule of thumb, allow between 30 and 45 days to process an FHA loan.


• There aren't FHA-specific appraisers, but conventional appraisers typically know when they're dealing with an FHA loan as opposed to a conventional loan.


• You may have heard of "Rapid Resolve" changes to credit scores for potential borrowers -- while some agencies use these, most lenders won't look at Rapid Resolve because it's not always accurate.


• Seller-paid closing costs can sometimes adversely affect FHA loans because the FHA requires the buyer to have a certain level of investment in the property. If the seller covers too much, the loan won't go through because the buyer doesn't have enough invested in the property.


• The FHA loan to value percentage is 96.5% based on sale price.


• How lenders generally use the terms "pre-approved," "pre-qualified" and "approved":
  
  
  
  • Pre-qualified: Lender has run a credit check and conversed with the buyer, but no paperwork has been completed
  
  
  • Pre-approved: Buyer has submitted W-2 forms, pay stubs, etc.
  
  
  • Approved: Loan has been successfully submitted to underwriter.
  
  
  
  


• To ensure enough time has been allowed, FHA loan packages should typically go to attorneys 72 hours in advance of closing.


• As a general rule, communication is key -- lenders differ in their standards, and just because the FHA doesn't require it doesn't mean the lender won't want to see it. Keep the lines of communication open to ensure that you're providing everything to the lender that his or her company requires.


• Finally, be sure to notify the lender of any changes in the contract. It could affect your closing.

Thanks to Kelly Krants of Wells Fargo Mortgage, Barbara Stewart of Forman, Rossabi & Black Attorneys at Law, Christie Caldwell and Chris Coffin of Elm Street Mortgage, Rai Alexander of Taylor Pope and Herring Inc.,  and Patrick Burns of Re/Max of Greensboro for helping make this a great panel.