Sacramento - Importance of FHA in this market

I am still surprised every day how many people are clueless as to what's going on in the lending industry. Let me put it this way, anyone that's selling or financing real estate in the residential market, if you don't have a solid FHA connection you are WAY behind the curve (especially California).

Let me tell you why.

Unless you go FHA, regardless of how close to 850 your credit score is, the most you can finance is 95% on a purchase in a declining market. With FHA, you can do a 97% loan and do a grant program behind it for 100% financing down to low 500 credit scores. I think we can all see the benefit in that.

Also, CA being a high cost area, has loan limits up to $729k depending on the county (Sacramento $580k). Now, unless you are dealing with a direct lender who banks, the best you'll be able to do is in the 620 credit score range with a broker.

So, to summarize, get yourself on board with a direct lender that's been doing FHA for a while and can get your borrowers approved for 100% financing. If you get lucky, you might come across someone who knows how to do FHA rehab loans. Feel free to contact me with any questions and good luck!