Sell More Homes Using FHA Loans

FHA, A Change Did You Good

In the old days FHA loans had a stigma. A stigma of a hard to close loan where the seller had to help pay for alot of the buyers closing costs, make unnecessary cosmetic repairs, and just be a real pain to deal with. Well those days are gone.

Effective 1/27/06 (Mortgagee Letter 2006-04), it is no longer necessary for the seller to pay for any of the buyers closing costs. A 6% seller assist is still allowed but not necessary if the seller chooses to do so. This fact alone makes FHA financing more attractive to the seller.

Effective 1/1/2006 (Mortgagee Letter 2005-48), FHA appraisal rules were overhauled. Termite, well, septic, and flat roof inspections are no longer automatically required to get an FHA mortgage. The only time they are required is when it appears there is an existing problem.

Unessessary Cosmetic Repairs Are A Thing Of The Past

Here are some instances of conditions that do not automatically require repair: cracked windows, cracked plaster, minor leaks, worn/soiled carpeting, bare floors, no handrails, and more. HUD is still enforcing the chipped/peeling paint requirement due to lead paint concerns and still wants the mechanical systems to be in working order.

Take advantage of an FHA loan for your next client, the time couldn't be better.