REAL Exclusive Magazine

Double Your Sales with Today’s FHA

By C. J. Coury

Over the last 2 years, loans insured by the Federal Housing Administration (FHA) have increased by over 265%! The year-to-date period ending June 30, 2008, when compared to the same period ending June 30, 2006, showed an average increase in FHA insured purchase money mortgages from 149 to 398 units in Sarasota and Manatee Counties. With the tightening, if not elimination, of the Alt-A market, the time has come to embrace these excellent loan programs.

Not only has the FHA made it more affordable to purchase a home with their insured loan products, they have continually improved their process and requirements to make obtaining approval far less cumbersome. One of the most widely impactful changes was to their appraisal requirements. Most real estate professionals remember the FHA as being extremely critical on appraisals, often requiring numerous repairs prior to the closing of the loan. Needless to say, this created a negotiation nightmare for all parties to the transaction and often resulted in a lost opportunity to bring a seller and buyer together. Well, all of that changed when the FHA recognized that the market would no longer support this type of scrutiny on property condition. The FHA appraisal guidelines now follow the conventional requirements with only one small exception – the appraiser must be approved by the FHA. So many professional appraisers have obtained this designation that selecting one is a rather simple process and does not present any delay or hardship for the lender.

One area of ongoing concern with FHA loans is their strict requirements for the financing of condominiums. This can be somewhat overcome by enlisting the help of a Loan Officer from a strong FHA lender. They can provide you with the list of FHA approved condominium projects in your area. In addition, they may have obtained spot approval on a unit in non-approved projects that are eligible for FHA financing. With the tightening of conventional financing on Florida condominiums this may be the best alternative for your buyers as they can still obtain financing with only 3% down, even less in some instances, as opposed to the 20% down-payment now being required by the conventional secondary market.

Another outdated concern is that the FHA loan limit is too low to be useful in the marketplace – that is no longer true. The new allowable limit in Sarasota and Manatee Counties is $442,500.00 – well above the average purchase price, let alone mortgage amount.

To double your sales, partner with an experienced provider of FHA loans and begin reaping the benefits!!

C. J. Coury is a Senior Vice President with Bank of America and oversees their residential mortgage division serving Sarasota, Manatee and Charlotte Counties. Prior to joining Bank of America in 1995, C. J. was President of Mortgage Brokers of America in Birmingham, MI for 7 years. His has been an active mortgage finance professional since 1983. C. J. may be reached at (941) 952-2888 or by email at Charles.j.coury@bankofamerica.com.