If you're looking to buy a home and don't have 10 or 20 percent down, FHA is a great way to go. A government subsidized program, FHA doesn't lend money. Rather, it insures mortgages offered by private lenders who use FHA guidelines. No, it's not one of those government programs that ranting radio folks say brought down our economy. FHA has been around for a long, long time, and it has always had tough requirements.
One is the buyer's debt to income ratio, which must meet strict criteria to insure that the buyer isn't getting in too deep with mortgage payments. Another is the loan limit, designed so the loans continue to reach the target group of less-advantaged homeowners. Sample loan limits for single family homes in Alaska:
Anchorage: $290,950
Fairbanks: $271,051
Juneau: $349,600
Homes financed under FHA must meet criteria certified by FHA appraisers. Buyers must occupy the home and must bring 3% downpayment to the table. In other words, with an FHA mortgage, the lender typically finances 97%. And FHA allows buyers to use gift money toward the 3%, as long as it's documented and doesn't come from the seller.
For more on FHA loans, contact your lender or visit the FHA website.
Tuesday, January 13, 2009
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Corrections...I am a licensed mortgage banker and I just happened to stumble across your article. Just an FYI as of January 1st 2009 they reduced loan limits throughout the country. Anchroage for instance went down to $290,050. In addittion the minimum requirement to obtain an FHA loan went up to 3.5%. Just some helpful information. Mike Bankowski, Nations Lending Corp. Cleveland Ohio
ReplyDeleteThanks for reading, Mike. You're absolutely right about the amounts of the loan limits - I figures for other than single family residences in the original post and have made the correction. But despite changes in the rest of the country, in Alaska FHA limits did go up for 2009; see http://www.adn.com/money/story/649683.html.
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