FHA loans are issued by federally qualified lenders certified by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development. If you are looking for FHA Loans in Chula Vista or surrounding areas of San Diego such as National City, contact Andre Enriques Mortgage Banker - VA Loan Expert today!
What are FHA Loans?
FHA loans are an attractive option, especially for first-time homeowners:
- Generally easier to qualify for than Conventional loans (Fico score as low as 580).
- Lower down payment requirements.
- Cannot exceed statutory loan limits
- FHA generally will not insure more than one mortgage for any borrowers where there is an existing FHA mortgage that is not paid off (transactions with paid off FHA mortgages are acceptable).
Benefits of FHA Loans
There are many benefits to FHA Loans beyond just lower down payments:
*Higher loan to values
*More overall credit qualifying flexibility
*Gift for down payment and closing costs permitted
*No payment reserve requirements
*Past BK, late payments, or Foreclosure, no problem
*Lower interest rates than Conventional financing
FHA Loan Limits
There are different limits on how much you can borrow for a FHA Loan depending on where you live.
FHA Loans Eligibility
Any person individually or jointly owning a home covered by a mortgage insured by FHA in which ownership is maintained may not purchase another principal residence with FHA mortgage insurance except under the situations described below.
Properties previously acquired as investment properties are not subject to these restrictions.
FHA will not insure a mortgage if FHA concludes that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the property to be encumbered will be the only one owned using FHA mortgage insurance.
We do not object to home buyers using FHA mortgage insurance more than once if compatible with the home buyer’s needs and resources as follows:
A. Relocations. If the borrower is relocating and re-establishing residency in another area not within reasonable commuting distance from the current principal residence, the borrower may obtain another mortgage using FHA insured financing and is not required to sell the existing property covered by an FHA insured mortgage. The relocation need not be employer mandated to qualify for this exception. Further, if the borrower returns to an area where he or she owns a property with an FHA insured mortgage, it is not required that the borrower re-establish primary residency in that property in order to be eligible for another FHA insured mortgage.
B. Increase in Family Size. The borrower may be permitted to obtain another home with an FHA insured mortgage if the number of legal dependents increases to the point that the present house no longer meets the family’s needs. The borrower must provide satisfactory evidence of the increase in dependents and the property’s failure to meet the family’s needs. The borrower also must pay down the outstanding FHA mortgage (secondary liens do not need to be paid off or paid down) on the present property to a 75 percent or lower loan to value (LTV) ratio. A current residential appraisal must be used to determine LTV compliance. Tax assessments, market analyses by real estate brokers, etc., are not acceptable as proof of LTV compliance.
C. Vacating a Jointly Owned Property.If the borrower is vacating a residence that will remain occupied by a co-borrower, the borrower is permitted to obtain another FHA insured mortgage. Acceptable situations include instances of divorce, after which the vacating ex-spouse will purchase a new home, or one of the co-borrowers will vacate the existing property.
D. Non-Occupying Co-Borrower. A non-occupying co-borrower on property being purchased with an FHA insured mortgage as a principal residence by other family members may have a joint interest in that property as well as in a principal residence of their own with an FHA insured mortgage. (See HUD Handbook 4155.1 for additional information). Under no circumstances may investors use the exceptions described above to circumvent FHA’s ban on loans to private investors and acquire rental properties through purportedly purchasing “principal residences”.
Considerations in determining the eligibility of a borrower for one of these exceptions are the length of time the previous property was owned by the borrower and the circumstances that compel the borrower to purchase another residence with an FHA insured mortgage.
In all other cases, the purchasing borrower either must pay off the FHA insured mortgage on the previous residence or terminate ownership of that property before acquiring another FHA insured mortgage.
Get Pre-Approved for an FHA Loan Today!
Located in Chula Vista, Andre Enriques Mortgage Banker - VA Loan Expert works with clients around the county, including San Diego, National City and surrounding areas.