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Today homeowners and Home buyers in Rhode Island, have many options under the Federal Housing Authority (FHA) program. Below are just a few of the many programs available.

First Time Home Buyers:

Available on 1-4 family properties, FHA allows you to put a minimum down payment of 3.5% of the sales price. This down payment can come from your own funds, a gift from a family member or a grant. To find out eligible grants, check out http://www.grants.gov. Closing cost expenses may be paid by the seller, not to exceed 6% of the sales price.

Mortgage help for seniors:

If you own a house, have reached the age of 62 1/2 years, and have a small mortgage, you can apply for a reverse mortgage through FHA. A reverse mortgage is a home loan that lets you turn a portion of the equity in your home into cash. The equity that built up over years can be paid to you. (Several ways of payment are available) Unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower no longer uses the home as their principal residence .

203k streamline (fixer up loan):

FHA offers a loan that allows you to purchase a 1-4 family property that needs repairs. The borrower is required to put down 3.5% of the sales price as a down payment. The borrower will have to arrange for a detailed proposal showing the work to be done, including a detailed cost estimate on each repair or improvement of the project by a licensed contractor. The total cost of the repairs cannot exceed $35,000 under the 203k steamline program. The amount of the loan will also include a contingency reserve of 10% to 20% of the total remodeling costs and is used to cover any extra work not included in the original proposal.
An appraisal will be done to determine the “after repair” value.

Energy efficient mortgages:

FHA’s Energy Efficient Mortgage (EEM) helps home buyers or homeowners save money on utility bills by enabling them to finance the cost of adding energy efficiency features to new or existing 1-4 family housing as part of their FHA insured home purchase or refinancing mortgage.The cost of the energy improvements and estimate of the energy savings must be determined by a home energy rating system (HERS) or an energy consultant.The improvements can be included in a borrower’s mortgage only if their total cost is less than the total dollar value of the energy that will be saved during their useful life. The EEM can be combined with the 203k streamline program.

Streamline refinances:

There are a few basics to the FHA streamline program:

The mortgage to be refinanced must be currently a FHA insured loan.
You must be current on your mortgage with no late payments in the last twelve months.
The FHA streamline refinance must result in the borrower reducing his/her current monthly principle and interest payments.
No additional cash may be taken out on a FHA streamline refinance loan. Maximum allowed amount is $500 cash back to borrower.

You can refinance your Rhode Island FHA mortgage loan without an appraisal and with a minimum 620 credit score. Although FHA does not have a minimum credit score requirement, many lenders have recently required the borrowers meet the 620 credit score minimum.

You will not have to submit any type of documentation evidencing your income such as W2s, tax returns or pay stubs. Instead, your current employer and income will be listed on the mortgage application. You lender is going to call your current employer to verify that you do work there. Simple as that.

• FHA also has programs to finance mobile and manufactured homes.

If interested in any of the programs listed above, please apply on line at http://www.guaranteedrate.com/lyndamckenzie or call me today for more information.

Lynda Mckenzie
RI license#137627/NMLS#137627
Direct:  401-524-9796
E-mail: lmckenzie@guaranteedrate.com
Web:  http://www.guaranteedrate.com/lyndamckenzie
RI Licensed- 20102682LL