Wednesday, May 25, 2011

Louisville Ky FHA

Louisville Ky FHA Single Family Mortgage Insurance Program


Kentucky's FHA's mortgage programs help low and moderate Kentucky Home buyers and owners with income families become homeowners by lowering some of the costs of their mortgage loans. Kentucky FHA mortgage insurance also encourages mortgage companies to make loans to otherwise creditworthy borrowers and projects that might not be able to meet conventional underwriting requirements, by protecting   lenders against loan default on mortgages for properties that meet certain minimum requirements. This includes manufactured homes, single-family and multifamily properties,.



Section 203(b) is the centerpiece of Kentucky  FHA's single family insurance programs. It is the successor of the program that helped save homeowners from default in the 1930s, helped open the suburbs for returning veterans in the 1940s and 1950s, and helped shape the modern mortgage finance system.



Today, FHA One to Four Family Mortgage Insurance is still an important tool through which the federal government expands home ownership opportunities for first time homebuyers and other borrowers who would not otherwise qualify for conventional loans on affordable terms, as well as for those who live in under served areas where mortgages may be harder to get. FHA currently insures a total of about 7 million loans valued at nearly $400 billion. These obligations are protected by FHA's Mutual Mortgage Insurance Fund, which is sustained entirely by borrower premiums.



Section 203(b) has several important features:



Downpayment requirements can be low. In contrast to conventional mortgage products, which frequently require down payments of 10 percent or more of the purchase price of the home, single family mortgages insured by FHA under Section 203(b) make it possible to reduce down payments to as little as 3.5 percent. This is because FHA insurance allows borrowers to finance approximately 96.5 percent of the value of their home purchase through their mortgage, in some cases.



Many closing costs can be financed. With most conventional loans, the borrower must pay, at the time of purchase, closing costs (the many fees and charges associated with buying a home) equivalent to 2-3 percent of the price of the home. This program allows the borrower to finance many of these charges, thus reducing the up front cost of buying a home. Louisville Kentucyk FHA mortgage insurance is not free: borrowers pay an up front insurance premium (which may be financed) at the time of purchase, as well as monthly premiums that are not financed, but instead are added to the regular mortgage payment.



Some fees are limited. FHA in Kentucky  rules impose limits on some of the fees that mortgage companies may charge in making a loan. For example, the loan origination fee charged by the mortgage company for the administrative cost of processing the loan may not exceed one percent of the amount of the mortgage.



HUD sets limits on the amount that may be insured. To ensure that its programs serve low and moderate income people, FHA sets limits in Ky  on the dollar value of the mortgage loan.




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