Monday, December 1, 2008

FHA and VA Classes

Government loans (FHA and VA) now account for more than 40% of all loans nationwide, up from less than 10% a year ago. The number is growing every month and is expected to be greater than 50% in the next month or two.

That means about half the deals that are closing right now are unavailable to buyers, real estate agents, and mortgage brokers who don't use government financing. The primary reason for not using government financing is a lack of understanding about how the programs work.

We are approved by the state to offer continuing education units (CEUs) to Colorado real estate agents for FHA and VA loan classes we have developed. Here's a quick little quiz to see if you should take the classes:

A -- Are FHA loans for first-time homebuyers only?
B -- Can the seller pay 6% towards the buyer's closing costs with an FHA loan? How much for a VA loan?
C -- Do FHA and VA consider declining markets when calculating the maximum loan-to-value (LTV) ratio?
D -- Is the loan limit $368,000 in the Metro-Denver area for FHA loans? What is it for VA?
E -- Do collection accounts have to be paid off to get an FHA loan?
F -- What are the income limitations for FHA and VA loans?
G -- Can a borrower's relative lend money to the borrower for the down payment on an FHA loan? Can they just give it to them?
H -- How many years out of bankruptcy does a borrower have to be to get an FHA or VA loan? How many years since a foreclosure?

Here are the answers:

A -- FHA loans are for anyone, not just first-time homebuyers.
B -- The seller concessions limit is 6% for FHA and it is unlimited for VA.
C -- Neither FHA nor VA consider declining markets.
D -- Loan limit is $368,000 for FHA in the Metro-Denver area (higher in Boulder) - beginning January 1, 2009. The limit for VA is $417,000.
E -- There's no need to pay off collections.
F -- There are no income limitations.
G -- A relative can either give or lend the down payment to the borrower.
H -- Chapter 7 BK is 2 years for FHA and VA. Foreclosure is 3 years for FHA and 2 years for VA.

Did you get them all correct? If not, call us to set up a class because you need to know these things and much more to close 40% of the deals that will come your way.

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