Los Angeles County FHA loan limits allow for a total loan amount of $742,520 with the up front mortgage insurance premium financed into the loan. I closed a $950,000 purchase last week with this loan amount for a first-time buyer. The FHA rates were lower than the High Balance Conforming rates and the buyer was allowed to get FHA gift money from his brother.
Throughout California, and particularly in high cost areas, like Claremont, Glendora, Arcadia and in Orange County, homebuyers are realizing that the flexibility of FHA loans is paramount to taking advantage of this current market, especially with the extension of the Homebuyer Tax Credit. While gift money is just that, and not a loan, the tax credit will allow for many buyers to “repay” the family members that may have helped them buy when they take the tax credit in 2010.
FAQ
- Why would someone do an FHA loan with mandatory mortgage insurance if they can put 20% down, as in the case above?
The rate was lower so it just about compensated for the monthly mortgage insurance payment. FHA also has the Streamline Refinance feature which allows for the borrower to drop their rate easily and cheaply in the future. FHA allowed the borrower’s brother to “invest” in the property with his gift donation. Real estate is an investment and in this case it was much easier to use FHA and not have to get his brother approved for any part of the loan at all.
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Top Articles / Links / Questions:
- FHA Loan Limits – Upland, CA
- FHA Seller Paid Closing Costs – Upland, CA
- California Investment Property With an FHA Loan
- What Is FHA Gift Money?
- The Trouble With FHA Loans in California
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Brian WiesnerCalifornia FHA Mortgage Expert |
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