Tuesday, May 21, 2024

FHA Mortgages to Save America's Homeowners
by Minh Nguyen
Minh Nguyen helped established FHA Mortgage Direct, 1-800-723-1880, a branch of Excel Funding, to start the FHA mortgage process online. Minh has been a licensed loan officer and mortgage broker since 2000 and specializes in FHA mortgage programs.

FHA mortgage programs are giving American homeowners an opportunity to refinance to low, 30-year fixed-rate mortgages amidst heavy guideline restrictions and worldwide credit tightening. The truth is, FHA programs have been in existence since 1934, but profit-hungry mortgage companies preferred placing customers into higher margin, conventional mortgages.

On average, homeowners can expect a 30-year, fixed-rate mortgage at 6.25% and 15 yr. fixed-rate mortgages at 5.75% with FHA mortgage products.

Borrowers with the following list of challenges are currently being helped with FHA mortgages:

  • Low credit scores
  • Little or no equity in the property
  • In foreclosure
  • Late payments after an ARM mortgage went adjustable
  • High monthly adjustable-rate mortgage payments
  • Meeting Debt-to-income ratio requirements

Background on FHA
When the FHA was created, the housing industry was flat on its back after two million construction workers lost their jobs and borrowers could not qualify for reasonable mortgages--a very similar situation America faces today.

Congress created the Federal Housing Administration (FHA) in 1934. The FHA became a part of the Department of Housing and Urban Development's (HUD) Office of Housing in 1965.

The FHA does not actually provide the funds for mortgages. It insures the mortgages that lenders make to help them against potential losses. The cost of that insurance is passed on to the homeowners in the form of mortgage insurance that is generally 1.5% of the loan amount upfront at closing (can be wrapped into new loan on refinance) and 0.5% paid monthly if LTV is greater than 78% LTV. At the end of 5 years or when loan-to-value drops below 78%, the homeowner does not have to pay mortgage insurance.

FHA is the only government agency that operates entirely from its self-generated income without utilizing taxpayers money. FHA provides a huge economic stimulation to the country in the form of home and community development, which trickles down to local communities in the form of jobs, building suppliers, tax bases, schools, and other forms of revenue.

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