Massachusetts Real Estate

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Massachusetts FHA Mortgage Loans

Federal Housing Administration loans (FHA) have been helping people finance homes since 1934. The Federal Housing Administration (FHA) which is part of HUD insures the loan so the lender can offer the buyer a better deal.

 

FHA loans in Massachusetts have become very popular and rightfully so. There are a number of reasons why the FHA loan program is being utilized by many borrowers as the preferred home loan choice.

 

 

 

Here is a summary of the reasons this may a good loan choice for you:

Anyone can apply and there are no income limits.

The FHA loan can be used for single or multi-family homes up to 4 units, condominiums, or manufactured homes.                                                                                                                                                                                                                                                                         

As of this writing (November 2008) the FHA minimum down payment is 3% although this will be changing in January of 2009 to 3.5%. The FHA is a perfect program for those that do not have tons of money squirreled away.

The borrowers credit score can be much lower in order to get the loan. At the moment credit scores can be as low as 580 with very few credit adjustments compared to conforming loans.                                              

Mortgage insurance is readily available and is cheaper than conventional loan programs. FHA also has a moratorium on their mortgage insurance costs which has reduced the cost for many home buyers.

The seller of a home can pay up to 6% in closing or buy down costs for a buyer.

The declining values policy is much more liberal and does not effect the mortgage unless the mortgage is utilizing the new temporary loan limits. The chart below summarizes the Massachusetts temporary loan limits.

 

 

 

 

 

One word of caution...The FHA program does not cover financing on a 2-4 unit condominium. So if you are looking at buying a duplex style townhome the FHA loan program would not be suitable for you.

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The above information on Massachusetts FHA Mortgage Loans was provided by Bill Gassett, the team RE/MAX Executive Realty Hopkinton MAleader for the #4 RE/MAX Team in Massachusetts in 2007. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 22+ Years. Bill's office is conveniently located in the center of Hopkinton MA at 77 Main Street.

I have a passion for Real Estate and love to share my marketing expertise! I would welcome the opportunity to earn your business.

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Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Comment balloon 22 commentsBill Gassett • November 06 2008 06:59AM

Comments

Over the years, the FHA loan has been a wonderful mortgage for our buyers.  Unfortunately, during the "Boom", sellers were advised by their agents to reject offers with FHA financing in favor of conventional financing offering fewer appraisal risks. 

Times they are a changin'.

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 11 years ago

Lenn they sure are! This FHA is a terrific product well suited for those that don't have stellar credit and have not saved a bundle of cash.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 11 years ago

Bill, good valid info for the FHA program and new home buyers. Would have liked to see FHA keep the 3% instead of heading up but it is still the best program out there for the home buyers. Was very glad to see the limits raised so help more home buyers.

Posted by Gena Riede, Real Estate Broker - Sacramento CA Real Estate (916) 417-2699 (Riede Real Estate, Lic. 01310792) almost 11 years ago

Bill - FHA loans are certainly growing in popularity, for good reasons as oyu have outlined above. The loan limits are especially helpful in higher priced areas such as ours.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) almost 11 years ago

Jeff they are one of the few products left that will enable a buyer who has not saved a large amount of money and has maybe a few credit blips. The FHA loan has become quite popular in Massachusetts.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 11 years ago

I find that during the boom, loan officers deterred buyers from FHA products due to the difficulty with these loans for mortgage brokers. Is there validity to that ?

Posted by James Wexler (wexzilla.com) almost 11 years ago

Bill - it is truly amazing how FHA loans have such a bad rap!! I was just talking to a friend and he was convinced FHA loans are hazadous to your health! He said if you cannot get a convetional loan forget it! Some people are just set in their ways I guess.

Posted by Terrie Leighton, Reno Real Estate Agent ~ Selling Homes in Reno (Ferrari-Lund Real Estate ) almost 11 years ago

James I had not heard that although nothing would surprise me.

Terrie - I am not sure why that opinion is floating out there. FHA loans are an excellent mortgage product.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 11 years ago

Bill, thanks for the well laid out explanation.  FHA Loans are now very successful in our area, and we expect the upper limit (before going to Jumbo status) to be going up for us which will really help us re-energize the move-up home segment!  John

Posted by Alexander- Slocum, Realty Team- Vancouver WA Real Estate (Premiere Property Group, LLC - Vancouver Washington) almost 11 years ago

Alex you are quite welcome. It is good news they are going raise the loan limits on in your area. That should stimulate some sales like you mentioned!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 11 years ago

Good advice for consumers.  I find they believe the media that there is no mortgage money available, no matter how many times we tell them differently.

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) almost 11 years ago

The FHA program is a great loan.  Fortunately, in Virginia, we also have VHDA to supplement the FHA downpayment requirement so if buyers qualify, they don't need a downpayment.  Also, there are some great FHA programs that are now surfacing with the end to the DPA's such as the "sweat equity" and "bridal registry" programs.

Tina in Virginia

Posted by Tina Merritt, Virginia Real Estate (Nest Realty) almost 11 years ago

Great info for potential buyers. With so many changes over the past year in financing, it's nice to be able to pass on info about a strong product.

Posted by Samantha Nichols, Massachusetts Real Estate Specialist (ERA Belsito and Associates) almost 11 years ago

What a ton of good news here for Prospective buyers! It helps to have this explained so well, especially about the FHA options. Nice job with the post!

Posted by Mara Hawks, Inactive-2012 REALTOR - Homes for Sale Auburn Real Estate, AL (First Realty Auburn ) almost 11 years ago

Margaret it is really strange that the perception is there is no money available. With poor credit the money is difficult to get but not otherwise.

Tina - It sounds like Virginia has ab excellent supplemental mortgage program in place.

Samantha - You must be seeing buyers taking advantage of the FHA program down on the Cape?

Mara - Thanks . The FHA program is a terrific option for a 1st time buyer who does not have a ton of cash to put down.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 11 years ago

Bill - I am a huge fan of FHA loans and direct all my buyers to the program.

Posted by Julie Dumaine-Russell (RE/MAX Alliance) almost 11 years ago

Bill... what's an FHA loan? lol  Seriously, some good info. Just a fyi.. the current downpayment is not 3%, but 3% of their own money is needed.  But it won't matter much in a few months.  And we can go down as low as 500 for a credit score....

jeff belonger

Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 11 years ago

Donna - The FHA loan truly is a great program.

Jeff - I did not realize they were dropping the credit score down to 500. That should help some borrowers who are teetering on the fence with their credit scores. I understand the 3% needs to be their own money.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 11 years ago

Bill,

This is nice, clear explanation of the benefits of an FHA loan.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) almost 11 years ago

Bill - This is an excellent, clear explanation of the advantages of using an FHA loan.

Posted by Pam Dent, REALTORĀ® - Charlottesville Virginia Homes / Horse (Gayle Harvey Real Estate, Inc.) almost 11 years ago

Bill,

This is great stuff. There are some changes being put in place with FHA. I have found that many mortgage brokers are NOT set up with FHA that is why they stear clients away. Also with the ever changing rules most do not keep up with the rules. One that should be in place soon is the following. If client A is married but their wife will not be on the loan they will still need to take into consideration all of her debts in qualifying for the mortgage. This is a huge change since many would not have the spouse on the loan or deed to avoid there credit or debts but the reality is that risk to the loan holder and FHA was high since the marriage allowed for ownership for both. Again this changes the game a bit. Also they are changing the rules as it relates to owning more then one property and how much rental income they will allow for qualification will be effected by the loan to value of that rental property. Again a great product but one that the mortgage professionals must be ontop of. If you ever have a question that you need reviewed let me know. Again great job on being the king of blogging for MA active rain. Also thanks for your advise to me over the past few months

Posted by Edward moloney, Loan Officer Providing 5 STAR SERVICE (Edward Moloney Loan Officer GMH Mortgage Services) almost 11 years ago

Christine & Pam - Thanks for the compliments. There are a lot of misconceptions about a very good program.

Ed thanks for taking the time to post these upcoming updates to the FHA program. It really is a great program for those with limited funds.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 11 years ago

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