Texas FHA Loans: Texas Apartment Renters Buying Homes with FHA Loans!!!

The 1st time home buyer tax credit up to $8000 created in January of ’09 was extended late last year to roll over into 2010.  Home buyers have until April 30th, 2010 to be under contract to purchase their 1st home and must close on the property by June 30th, 2010 to take advantage of this amazing opportunity!  ALNsystems.com reports that the number of apartments rented statewide dropped 2.4% between December ’08 and December ’09.  It is my belief that renters have been making that all important step towards living the American dream of home ownership. 

     As a mortgage professional and financial advisor I find that the most widely utilized program for the 1st time home buyer is a FHA loan (Federal Housing Administration).  This program is geared specifically towards the credit challenged and individuals that are not prepared to make a large down payment.  But this program can be used by anyone purchasing a primary residence.  FHA loans offer low fixed rates and requires escrow accounts for taxes and insurance.  My clients enjoy these options as it guarantees stability in their budget and a “forced savings account” in their payment for future taxes and insurance.   

As most of the public has heard HUD (Housing & Urban Development) has announced major changes to the way FHA lending is conducted.  It has been proposed that the monthly cost of mortgage insurance will be increased along with the upfront mortgage insurance premium that is charged for utilizing this program.  Additionally the amount of money sellers can contribute towards a buyer closing costs will been slashed in half from 6% to 3% of the purchase price.  Finally, they are wanting to create a tiered down payment structure based on credit risk.  Investors will require larger down payment for lower credit score borrowers.  These changes have not been chiseled in stone….yet.  It is important that if you are wanting to purchase a home in the near future that you jump off that fence and go find one soon!  Between the tax credit ending and the impending changes to FHA guidelines you have little time to spare.