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     Alpha Mortgage & Financial Services, Inc. are FHA APPROVED!

Federal Housing Administration (FHA) Loans

FHA loans are insured by the Department of Housing and Urban Development (HUD) and designed to make housing more affordable for first-time homebuyers and buyers with low to moderate incomes. Both fixed and adjustable rate FHA loans are available, and, in most states, FHA loans can also be used to refinance your current home.

FHA was established in 1934 to improve the construction and financing of housing and helped to reform the lending industry by spearheading changes in the way lenders structured loans. Some of those changes include the creation of low down payment, low interest rate loans that are fully amortized and include the mandatory collection of property taxes and fire insurance premiums. The FHA also created standards for qualifying buyers and the properties they would agree to insure loans against.

The FHA is not a direct lender--it does not actually make loans--it insures the lender against loss. The FHA appraises and approves the property, as well as the qualification of the borrower, and we loan the funds. The loan is then insured by the FHA. The FHA charges the borrower a Mortgage Insurance Premium (MIP) which we collect and pay to the FHA. The borrower has the option of paying the MIP in a lump sum up front at a discount, or in payments added to the mortgage over the term of the loan.

ADVANTAGES OF FHA LOANS:

    1. Low down payment: With FHA insurance, eligible buyers can purchase a home with a down payment of little as 3% of the FHA appraisal value or the purchase price, whichever is lower.
    2. 100% of the down payment can be a gift: FHA and VA loans allow the borrower to use 100% gift moneys for the down payment.
    3. Non-occupant co-borrowers are allowed to assist in qualifying for the loan: FHA loans do not place restrictions on the occupant borrowers' ability to utilize a co-signer should they need help in qualifying.
    4. Credit history does not have to be spotless to obtain financing through the FHA. Most conventional lenders require nearly perfect credit histories when borrowers make down payments less than 20%.
    5. FHA loans are assumable under certain conditions. (Conventional fixed rate loans seldom are, however.)
    6. The Seller is required to pay the Processing fee, the Document Prep Fee, and the Tax Service Fee in an FHA loan, defraying some costs for the borrower.
FHA Loan Limits
Department of Housing and Urban Development FHA Maximum Mortgage Limits Does Hud Owe You A refund? All FHA insured mortgages are required to pay Mortgage Insurance Premium (MIP). The cost of MIP is based on the amount of the unpaid principal balance on a mortgage. If you paid MIP in a lump sum at the time you originated the loan then paid the mortgage off before its full term, you may be entitled to a refund. For information on MIP refunds, please write U.S. Department of Housing and Urban Development, ATTN: HFMSDR, 451 Seventh Street, S.W., Washington, D.C. 20410 or call (202) 708-0246. Please include your FHA Case Number with all inquiries What are the rules for bankrupcy?
Generally, a bankruptcy will not necessarily disqualify a potential borrower. Guidelines are as follows: Chapter 7: Two years must have passed since the bankruptcy was discharged; the borrow must have reestablished good credit without delinquencies for two years (or has chosen not to incur new credit obligations), and has demonstrated an ability to manage financial affairs. Chapter 13: A borrower currently paying off debts through this process may qualify if a minimum of one year of the payout period has elapsed and payment performance has been satisfactory with no new derogatory credit and the borrower must receive court approval to enter into the mortgage transaction

Can we use a gift fund as a down payment?
The down payment can be 100% gift funds. This is one of the key benefits to the FHA program. Verification of the source of gift money is not required. However, it is necessary that the gift funds be deposited in the borrower's bank or savings account, or in an escrow account, prior to underwriting approval. Proof of deposit is required. Gift donors are restricted primarily to a relative of the borrower. They can also be certain organizations, such as a labor union or charitable organization. Contact your local branch for complete information.   

  Veterans Administration (VA) Loans

In 1944 Congress passed the G.I. Bill of Rights, which created the Veterans Administration and provided many benefits for veterans, including provisions for real estate loans. VA loans are fixed rate loans with very competitive interest rates. Eligible buyers can purchase a home with no down payment, no cash reserve, no application fee and lower closing costs. In most states, VA loans are available to refinance your current residence. Not everyone who has served in the armed forces is eligible for a loan through the VA. The veteran must have served during specific times and for a minimum length of time. (Ask us for details.) Those who served less than the required amount of time, but were released for discharge due to a service-related disability, may also be eligible. Some members of the Reserves and National Guard may be eligible, and unmarried spouses of veterans who died as a result of service-connected injuries may be eligible. In addition to service requirements, the VA also requires that the discharge or release was not dishonorable. WHY CHOOSE A VA LOAN? 1.      No down payment. VA lenders do not require a down payment on loans up to $203,000. This feature is unmatched by any other conventional or government loan program. 2.      No closing costs. Closing costs can be paid by the seller, or gift funds may be used. The veteran can literally move in without any of their own funds! 3.      Easier qualifying standards. The VA is more liberal than conventional investors when determining how much a borrower will be allowed to spend on housing and other monthly obligations. The VA is also more lenient when reviewing a borrower's credit history. 4.      No prepayment penalties. The VA does not allow prepayment penalties to be applied to a loan. 5.      VA loans are assumable under certain conditions. (Conventional fixed-rate loans are rarely assumable.) The most notable difference between VA and FHA loans is that the VA guarantees a portion of the loan and the FHA insures the entire amount of the loan. The difference between a guarantee and insurance is made apparent only when foreclosure is imminent, in which case the VA has two options: It can either pay the lender the balance of the loan amount and take back the property, or it can give the lender rights to the property and pay the amount of the loss, up to the maximum amount of the guarantee.