FHA Secure Loans - Qualifying
How to Qualify for FHASecure Loans
Because the FHA Secure Loan program has just been announced, it is difficult to determine exactly what the
specific qualifications may be. However, we know that the program has been designed to help individual homeowners and families,
not investors.
FHASecure Loans and Good Credit
President Bush stated in his Speech on August 31, 2007 that the FHA Secure program will help homeowners
who have good credit. In the past, the FHA have not required borrowers to have a minimum credit score, rather they have focused
on one's overall credit history. Therefore, it may be possible to qualify even though you may have a low credit score, perhaps
500 (or less). According to President Bush, potential candidates for the FHASecure Loan program must have made their payments on
time for at least six months prior to their ARM loan's change date to a higher rate. In addition, their
ARM loan's rate change date(s) must be between 2005 and 2009. To date no mention of a particular credit score has been
mentioned.
To qualify for FHA Secure, eligible homeowners must meet the following five criteria:
-
A history of on-time mortgage
payments before the borrower's teaser
rates expired and loans reset;
-
Interest rates must have or will reset between June 2005 and December 2009;
-
Three percent cash or equity in the home;
-
A sustained history of employment; and
-
Sufficient income to make the mortgage payment.
It seems that the FHA's focus will remain on looking to the good credit profile of applicants rather than a
credit score, And, until now the FHA has not permitted delinquent borrowers to qualify for their loan program.
FHA is not a Lender
However, it is important to understand that the FHA is not a lender; rather they insure loans made by lenders.
Despite the well needed changes, FHA Secure will not change in this respect. So, while still may be able to explain away
credit problems due to reasonable circumstances, the FHA Secure loan program will not assist deadbeats.
FHA Refinance Lender
As with any business, certain expertise is something that develops over time and, more importantly,
experience. This is particularly true in the field of FHA Refinancing. Finding an experienced FHA lender or broker will
likely save you a lot of time and wasted expense. They are familiar with the agency's application process and qualification
standards. While the FHASecure loan program is new, it will not be too different from the agency's current
programs so having an FHA expert on you side is a wise thing to do.
And, only FHA approved
lenders can process FHA Secure Loans -- so be sure you 're not wasting your time with unauthorized loan officers and
brokers who may just try to steer you back to the same old mortgage vehicle that got you in trouble in the first
place.
How to qualify for FHASecure Loans
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