Guest Post: Take another look at FHA loans

Is your mortgage broker approved to provide FHA mortgages? Even in a town like San Francisco, that question is one that more real estate agents should be asking. FHA lenders go through a rigorous audit. They have their own credit history checked along with the business itself. They must establish and file a quality control plan, and even provide pictures of the "brick and mortar" facilities. FHA lenders have jumped through a lot of hoops to become approved, even though they really didn't need to over the last few years. In a similar fashion to a real estate agent becoming a Realtor, FHA-approved brokers and bankers have gone above and beyond the minimum standards of the industry.

With the so many divergent options offered through subprime channels, it's been easy for brokers to eschew FHA approval. Not any more. As subprime and Alt-A programs disappear, those who can still deliver through FHA are in a great position to help real estate agents' clients.

What are FHA loans best suited for? They allow for high loan-to-value ratio loans with no prepayment penalties. They allow for high qualifying ratios, and less-than-perfect credit. In fact, they don't require an established credit score at all. They are also fully assumable and offer assistance programs to help borrowers avoid default.

In the entire city of San Francisco, only about 40 properties listed on Realtor.com would actually meet the maximum loan level requirement. Okay, they're not for everyone, but it's worth asking about. In the near future, FHA loans are more viable than ever. Wouldn't it be appropriate to know if your broker has that tool in their belt?

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