FHA Mortgage Loans – Arizona
Update 4/9/2012: New FHA Mortgage Insurance premiums. Arizona FHA borrowers see below…
As of April 9th 2012 here are the following changes
Annual Mortgage Insurance premiums
- 15-Year Fixed w/ down payment more than 10% , the MIP will be .35%
- 15-Year Fixed w/ down payment less than 10% , the MIP will be .60%
- 30-Year Fixed w/ down payment more than 5% , the MIP will be 1.20%
- 30-Year Fixed w/ down payment less than 5% , the MIP will be 1.25%
Upfront Mortgage Insurance premiums for all FHA transactions increased from 1% to 1.75%
Your “Crash Course” in the Federal Housing Administration and its Financial 
Programs
The Federal Housing Administration (FHA) was established back in 1934 with a simple goal, to help more Americans purchase new homes. As with any governmental agency, the FHA Mortgage Loan options available and the rules to apply can be very complicated. Arizona FHA Mortgage Loan programs can also be challenging to comprehend.
So let’s take a minute to give you a crash course in FHA Mortgage Programs, and more specifically, the details surrounding Arizona FHA Mortgages.
First, let’s answer the most common questions about FHA Mortgage Loans:
What is the credit score I’ll need to apply ?
- In the state of Arizona, most institutions will be looking for a credit score of 620 or better.
What is the maximum amount I can apply for?
- Right now, until you present an Arizona Mortgage Broker with the necessary documents to analyze your situation, the answer is “it depends”. Only after an analysis of your current financial status can a maximum amount be determined.
How do I know if the house I’m looking to buy allows me to apply for an Arizona FHA Mortgage?
- Easy! Properties such as single family residences, townhomes, duplexs, tri-plexs, and four-plexs are all eligible for FHA financing. Condo properties do have some additional rules and restrictions so you will have to follow this link to see if your condo is eligible for an Arizona FHA Mortgage Loan.
FHA Mortgage Loan Types:
Your Arizona mortgage broker will be familiar with the types of loans available, but you will also want to be familiar with your options before you begin.
- First – you must be aware that FHA mortgage loans have an up-front mortgage insurance premium and an annual mortgage insurance premium. The insurance costs and annual percentages will vary based on the length of the loan and the amount of your down payment so be sure to ask your mortgage advisor! Do not be surprised by this.
- It’s also important that you understand “why” this is required. Very simply, FHA Mortgage Programs provide an option for those that may not be able to qualify for a conventional loan. But this means that financial institutions are taking a little more risk so the insurance is designed to act as a form of protection for the banks and lenders.
When discussing the available Arizona FHA Mortgage Programs with your advisor, you will want to work to determine which of the four Single Family Housing programs will be right for you:
Section 203(b) Most Arizona FHA mortgage loans fall under this section. It can be used to finance from ONE to FOUR housing units. Mortgage terms can be ADJUSTED to accommodate the needs of the applicant. LOW DOWN PAYMENT: only 3.5% is required. There are also various GIFT OPTIONS for down payments that are acceptable.
Section 234(c) This FHA Mortgage Loan is used for CONDOMINIUMS. The same credit requirements for a Section 203(b) apply to this as well. New 2010 rules require that this type of application be submitted via HRAP/DELRAP. Your mortgage advisor will be aware of this, but you can look for Arizona approved condos by clicking on this link.
Section 203(k) This program allows a borrower to finance the cost to REPAIR/REMODEL their home. One mortgage loan will be used for the acquisition AND upgrade of units. Up to FOUR housing units are eligible, but consult your preferred bank on other criteria. FHA Mortgage Consultants may be required on certain 203(k) loans.
HECM – Reverse Mortgages This type provides applicants access to the equity in their housing units. Several PAYMENT METHODS are available such as; lump sum, installments, line of credit or a mix of those three options. Only applicants of AGE 62 or above can qualify.
In addition to this list, FHA has developed new options such as the Streamlined Refinance and the “Make Home Affordable Program” that are meant to help alter and refinance current mortgages. Again, your mortgage advisor will have the details, but this “Crash Course” has now prepared you to ask the right questions!
