Debunking FHA Financing Myths

There are many great Boca Raton and Palm Beach County homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call us at (561) 395-8418 for a FREE home buying or selling consultation to answer any of your real estate questions.

Debunking FHA Financing Myths

Today we are joined once again by Matt Weaver of PMAC lending to talk about some common misconceptions people have about FHA loans. Matt is an expert in the field and we want to take this opportunity to have him debunk some of the rumors you may have heard about this type of financing. 

FHA financing is one of the most favorable kind of loan you can get. Credit score requirements aren't very high, and the debt to income ration allowances are greater. One myth about FHA financing is that properties fail inspections at a higher rate than other types of financing. This is simply not true. The only property challenges that FHA won't allow vs conventional financing are a missing A/C unit, water being turned off, or visible roofing issues. Anything else wrong with the property would also fail for conventional financing as well. 

Here are a couple frequent questions that Matt gets asked about FHA financing that he wanted to help clear up. 

Does the appraisal still attach to the house?
 Yes they do, but only if the new buyer is going for FHA financing. If a buyer couldn't purchase a home because they weren't qualified, that FHA appraisal is transferable to the next buyer, but only if they are also doing FHA financing. 

 Are there any hidden pitfalls for FHA financing?
 Absolutely not. It's a very liberal loan product. Conventional financing does have a few advantages, but in reality it is a lot more difficult to qualify for. Over 30% of home buyers with a lower down payment have debt ratios in excess of 45%, which FHA will allow but conventional financing will not. Currently for conventional loans with a 5% down payment, it tops out at 45%. FHA loans can top our as high as 56%.


If you are interested in financing or have any questions on the topic, give us a call. We will put you in contact with Matt to make sure you are in the best hands possible.

Special Financing Programs for Short Sales

There are many great Boca Raton and Palm Beach County homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call us at (561) 395-8418 for a FREE home buying or selling consultation to answer any of your real estate questions.

Special Financing Programs for Short Sales

 Welcome back to our blog. Today we talked with Matt Weaver from PMAC Lending about the short sale process from a financier's standpoint. The rules have changed a little bit and in some cases, buyers don't have to wait as long to purchase another home after their short sale.

The amount of wait time between a short sale and buying another home depends on the loan product. With FHA financing, it's wait period is 3 years. However, they have implemented a new product called the "Going Back to Work" program that allows you to qualify to purchase a new home after only 1 year. To qualify, you need to be able to prove that your income dipped by at least 20% during the onset of the financial crisis and that you are back up to your original income now. 

With conventional financing, things are a little different. The wait time is 4 years, but with a 20% down payment, you can qualify in just 2. Extenuating circumstances such as divorce, illness, or death can also trigger a 2 year wait period. 

If you have any questions, please feel free to give us a call. We would be more than happy to help.