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| Home / Info for Realtors / FHA Loans |
FHA Loans  
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Maximum FHA Sales Price w/ Minimum Down PaymentBecause FHA has loan amount restrictions, the following are maximum sales prices with minimum down payments for Pima County. These are general guidelines meant to help you as you search for homes to fit within the FHA guidelines. Please call Lance for specific scenarios. 1 Unit Owner Occupied: $186,200 2 Unit Owner Occupied: $220,992 3 Unit Owner Occupied: $267,120 4 Unit Owner Occupied: $331,968
Up Front Mortgage Insurance Premium (UFMIP)An UFMIP is charged on all FHA loans and is a flat 1.5% of the loan amount after down payment. This is generally financed into the new FHA loan, but may be paid at closing. The UFMIP is used by FHA in order to lower the monthly mortgage insurance that is charged. In the event of a refinance or early payoff of the FHA loan, a pro-rated refund to the borrower of the UFMIP may apply. Call Lance for details. Example: Sales price: $100,000 Minimum Down Payment: $3,000 Loan Amount After Down Payment: $97,000 UFMIP: 1.5% of $97,000 = $1,455 Total New Loan Amount: $97,000 + $1,455 = $98,455 Please note, certain circumstances may allow the borrower a smaller down payment, please call Lance for details and specific scenarios.
Monthly Mortgage InsuranceMonthly MI is also charged and added to the total Principal, Interest, Taxes and Insurance (PITI) payment. It is calculated using a .5% factor. The monthly mortgage insurance is determined by using the following formula. (.5% x Total Loan Amount) ¸ 12 = $41.02 per month Example: Sales Price: $100,000 Down Payment: $3,000 Loan Amount After Down Payment: $97,000 UFMIP financed into loan: $1,455 Total Loan Amount: $98,455 Step 1: $98,455 x .5% = $492.28 (Annual MI) Step 2: $492.28 / 12 = $41.02 (Monthly MI)
Maximum Seller Finance ConcessionSeller Finance Concession is defined as the seller agreeing to pay any of the buyer's closing costs and/or pre-paid items. The maximum amount allowed on FHA loans is a flat 6% of the purchase price. Example: Final negotiated purchase price: $100,000, maximum amount seller can pay towards Buyer's Closing Costs and/or Pre-Paid Items is $6,000.
Down Payment Assistance ProgramsFHA Loans allow for particular Down Payment Assistance Programs such as the Ameridream program. This program allows for the seller to "donate" a set amount to one of these non-profit organizations. The organization then gifts back to the buyer a set amount. Ameridream programs are as follows:
Since there are many down payment assistance programs now available, please call Lance for details about other available programs.
Buyer's Closing CostsBuyer's Closing Costs are defined as those closing costs FHA allows the Buyer to pay. Closing Costs the Buyer can't pay total approximately $867. These fees are itemized as follows but are subject to slight variation:
This dollar amount is written on Line 80 of the Standard Arizona Real Estate Contract. If any of the Buyer's Closing Costs are to be paid by the seller, these can be added into the Additional Terms and Conditions on Page 8 of the standard Arizona Real Estate Contract form or in an addendum.
Termite ReportsA clear termite report is mandatory on FHA loans. This includes no visible evidence of subterranean termites as well as no wood to earth contact, no faulty grades (unless denoted that it is due to construction), and no excessive moisture. If the report indicates any damage due to subterranean termites, all damage must be repaired prior to the close of escrow. FHA will not allow the Buyer to sign any sort of Hold Harmless statement.
Roof CertificationsIf the entire roof can not be seen from ground, FHA considers this a flat roof and a licensed roofer must certify that the roof has at least 2 years of remaining life. If the roof requires repairs to be done to give it at least 2 years of remaining life, the repairs must be done prior to the close of escrow. However, the licensed roofer can be paid at the closing of escrow.
Maximum Allowable Seller LeasebackA Seller Leaseback consists of anytime the Buyers are not taking immediate possession of the property and the seller will be paying the Buyers for additional time spent in the house (also known as "renting back"). A maximum Seller Leaseback for FHA loans is 30 days.
FHA Eligible PropertiesExisting homes, 1-4 Units, manufactured homes with FHA groundset, New Construction, FHA approved Planned Unit Developments (PUDs), and Condominiums. Please call Lance to check if specific PUDs and/or condominiums are FHA approved. Investment and 2nd homes are not allowed.
Escrow HoldbacksThere are no Escrow Holdbacks allowed for repairs. Any repairs that either the Buyer requests or is required by the FHA appraisal must be completed and verified prior to the close of escrow. Any sub-contractor needed can be paid through the close of escrow.
Home InspectionsHome Inspections are not required but are encouraged on all FHA loans. |
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