What is an FHA Loan?
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Homebuyers in the Minneapolis, St Paul, Madison, Milwaukee area, and throughout all of Minnesota and Wisconsin have heard the name before, but did you know that FHA financing is one of the most popular ways to become a homeowner or refinance an existing mortgage. FHA's mortgage insurance programs help low- and moderate-income families become homeowners by lowering some of the costs of their mortgage loans. FHA mortgage insurance also encourages mortgage companies to make loans to otherwise creditworthy borrowers and projects that might not be able to meet conventional underwriting requirements, by protecting the mortgage company against loan default on mortgages for properties that meet certain minimum requirements--including manufactured homes, single-family and multifamily properties. We are a top FHA Home Loans Lender in Minnesota and Wisconsin.

FHA LOANS vs. Conventional Financing

Find out why more and more people are turning back to FHA!
Although there are similarities between FHA and Conventional mortgage loans there are also some big differences. While FHA mortgage rates are similar, credit guidelines are different. FHA allows for borrowers with less than perfect credit to receive the same interest rate as a borrower with unblemished credit. Low down payment conventional financing, like FLEX 97, are much harder to qualify for these days. Minimum credit scores are much higher, and private mortgage insurance is usually more expensive that FHA home loans..

FHA was created by the Federal Government to provide affordable housing financing for qualified borrowers. FHA doesn't actually lend, they just insure the loan, eliminating the lender's risk. The borrower pays a small upfront insurance premium, called MIP, which is added to the loan amount. The borrower also pays a small monthly mortgage insurance premium. These funds go into a default pool, while covers any foreclosures, and all FHA borrowers have to pay into this fund.

FHA Home Loan Down payment requirements can be low. In contrast to conventional mortgage products, which frequently require down payments of 5-10 percent or more of the purchase price of the home, single-family mortgages insured by FHA make it possible to have small down payments. FHA RULES HAVE CHANGED. I won't repeat the old rules to avoid confusion, but currently FHA REQUIRES only a 3.5% down payment. This money can be your own money, a gift from a blood relative, or a gift or grant from a true community, state, or city program.

There are also Closing costs which need to be paid, but almost 100% of the time, these closing costs can be financed into the loan amount by having the seller pay them. Seller paid closing costs really is simply a fancy term by which you are allowed to "roll" your closing costs into the loan, and pay them over the life of the loan, versus having to come up with the money today out of pocket.

FHA closing costs can be financed, up to 6% of the purchase price. With most conventional loans, the maximum is just 3%. Typically borrower must pay, at the time of purchase, closing costs (the many fees and charges associated with buying a home). This program allows the borrower to finance many of these charges, thus reducing the up-front cost of buying a home. FHA mortgage insurance is not free: borrowers pay an up-front insurance premium (which may be financed) at the time of purchase, as well as monthly premiums that are not financed, but instead are added to the regular mortgage payment.

Just like all loans, FHA home loans require borrowers to provide proof of sufficient income to pay the mortgage. While FHA guidelines are generally more relaxed, FHA is NOT, and does not do sub-prime loans. FHA interest rates are extremely competitive with conventional rates.

Buy a HUD home! Call to learn about the HUD / FHA REPO Purchase Loan

Some fees are limited. FHA rules impose limits on some of the fees that mortgage companies may charge in making a loan. For example, the loan origination fee charged by the mortgage company for the administrative cost of processing the loan may not exceed one percent of the amount of the mortgage.

Maximum FHA Loan Amounts Vary By County and State. Find out your limit with our FREE FHA LOAN LIMIT Lookup Tool

HUD FHA Loan Limits. Limits on the loan amount. To make sure that its programs serve low and moderate-income people, FHA sets limits on the dollar value of the mortgage loan. It is always changing, and does vary depending on which county the property is located. Use our FREE Loan Limit Lookup Tool to find out the limits in your area.

Fannie Mae & Freddie Mac loans are conventional loans made at the risk of the lender without benefit of any government guarantee or government insurance. A conventional loan with an LTV (loan to value ratio) of greater than 80% requires primary mortgage insurance, which can be paid monthly. The borrower must (usually) have 5% of his/her own funds for the down payment.

Requirements of a conventional loan applicant include excellent credit, job stability with sufficient income, a sizable down payment, and low debt to income ratios. Borrowers who meet Fannie Mae or Freddie Mac conventional guidelines are rewarded with an interest rate only slightly lower than an FHA interest rate.

FHA Mortgage Insurance. Mortgage insurance is required under all programs where the borrower does not put at least 20% down payment. Under the OLD FHA rules, mortgage insurance was required for the entire loan period. Conventional loans are able to eliminate mortgage insurance when you reach 80% loan-to-value (20% equity). A BIG advantage over FHA. NOT ANYMORE! FHA mortgage insurance is eliminated when you get to 78% loan-to-value (22% equity) by making payments, just like conventional loans!

Non-conforming Bad Credit, Sub-prime, Alt-A Loans Gone
Lenders, and the crazy lender days from 2000 - 2006 are long gone. Bad credit, sub-prime, stated income, no doc, Alt-A, and everything else crazy is no longer available. FHA is your best option if you are a weak credit risk, but it is NOT a bad credit loan. You have to qualify, it has to make sense, and you have to have a little skin in the game (down payment).

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The FHA Streamline Refinance
If you currently have an FHA mortgage you are eligible for one of the simplest money saving refinances available today. The FHA Streamline Refinance allows existing FHA borrowers to reduce their interest rate without having to jump through hoops. Basically, if you have made on time payments on your current FHA loan for the past 12 months. You get (almost) an automatic approval for the streamline refinance! No qualifying, and no appraisal. Closing costs are rolled into the new loan, so you have no out of pocket costs.

How easy is that? Apply online right now to explore your FHA Streamline Refinance options

| 203(k) & 203(k) Streamline | Streamline Refinance | Buy a HUD Home | HOPE for Homeowners | FHA LOAN LIMIT Lookup Tool |

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| 203(k) & 203(k) Streamline | Streamline Refinance | Buy a HUD Home | HOPE for Homeowners | FHA LOAN LIMIT Lookup Tool |

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Buy a HUD Home, Home Loan Program in MN and WI
Can you really buy a HUD home? Absolutely!

If you're a qualified buyer, you can use an FHA loan to buy one of HUD's specifically designated foreclosed homes for sale.

This is a national program, and there are qualifying homes in every state.  We lend on this program for homes ONLY in Minnesota and Wisconsin, so please do NOT contact us about other states.

• How Does It Work? Simple Just qualify for a traditional FHA loan, then you MUST select a home to buy from the list of available HUD foreclosed properties.
• Where can I see the list of available houses? Easy. Fill out this short form to receive the list of Minnesota and Wisconsin HUD foreclosures
• What about closing costs? Closing costs can be rolled into the transaction, up to 6% of the loan amount.
• How do I get started? It all starts with a no obligation online loan application or a call to (651) 552-3681, where one of our specially trained Loan Officers will assist you.

| 203(k) & 203(k) Streamline | Streamline Refinance | Buy a HUD Home | HOPE for Homeowners | FHA LOAN LIMIT Lookup Tool |

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