[quote=HLS]. . . FHA is the ONLY game in town with a crappy credit score. With only 5% down you need 700+ with F/F.
FHA will allow much lower scores but you will also pay 2.25% funding fee up fron with FHA.
The funding fee can be added to the 96.50% loan.
The MI will be paid over the life of the loan. On any FHA loan MI is currently mandatory for 5 years, regardless of equity . . .
The purpose ? To sell homes to foolish people who don’t realize that they are overpaying because this idiotic financing is available.
The govt relies on uneducated, financially illiterate homebuyers to keep the Ponzi scheme going.
Why else would they limit loan mods to 31% of income BUT approve new buyers at up to 50% of their income? Only to stretch out the fall in prices, expecting a large % to default in the future.
F/F are losing billions, FHA cannot be far behind. Most FHA losses are being covered up like cat poop in a litter box. 100% of the losses are on loans originated in the last 5 years, but an easy modification avoids booking the loss. Extend and pretend. Perpetuate the myth.
The American dream has turned into a nightmare for many. George Carlin said it best, “You’d have to be asleep to believe it”
If FHA didn’t exist, housing prices would be lower.[/quote]
Thanks, HLS, I didn’t realize FHA accepted low credit scores. I guess since there’s no “subprime” market anymore and FHA’s loan limit is so high, these bad risks can now use FHA.
I still don’t understand how borrowers think paying the MMI (and “funding fee,” if applic.) is a good deal.
Why would ANYONE want to buy property with only 3.5% down?? Why not just RENT and save more $$ and later obtain a loan with better TERMS??
The FHA program rules are defeating the apparent “movement” to get solvent borrowers in properties who will not be “underwater” again a minute and a half after escrow closes.
