[quote=HLS] . . . There was no need for FHA loans prior to 2007 when 100% financing, stated income and 2nds were available. They were a tiny part of the financing market. Less than 5% (?) Recently I think that FHA is around 35%.[/quote]
HLS, I don’t recall putting ANYONE into an FHA in the late eighties to early nineties or early 2000’s or even a seller having an existing FHA loan in SD.
At some point since 2000, the FHA loan limit must have SOARED because the limits set by FHA were always too low to be of any use in this area.
I DO remember builder Lane Kuhn selling the entry-level “cottages” around Eastlake Shores in 1987/88 with FHA loans. The prices were $88K to 97K and some of my co-workers bought them and asked me to review their Reg-Z’s when they first went into escrow. At that time, the FHA loan limit was probably around 97,500 to 103,500 and FHA charged ALL the MMI up front which was about 4 pts. of a 93,600 loan. or $3744. the lump-sum MMI was wrapped into the loan, causing the 96.5% loan to be 100.5%. There were no monthly MMI payments. Most of these co-workers got rid of their MMI in the nineties by getting the property reappraised and received a portion of their up-front prem. back in the form of a rebate.
The “cottages” were the ONLY SFR built out there that qualified for “FHA” financing. Don’t know about the condo complexes but I think Villa Capri and Camelot did also, when they were new.
HLS, what is the purpose of obtaining an FHA loan if the MMI is so exorbitant that it adds several hundred dollars a month onto the mtg. payment without loaning any more money? In my mind, this is just a extra non-deductible expense like HOA or MR.
What happened to paying the MMI premium up front?? I haven’t been following FHA developments over the years.
