FHA for Lenders
FHA insured mortgages offer many unique benefits and protections for lenders: (Top)
![[Photo: A woman smiling]](../../fha/images/photos/2007-06-01l.jpg)
- More security: FHA insures the mortgage, lowering your risk
- More qualified borrowers due to:
- Lower down payments: FHA loans have a low 3% down payment and that money can be a gift (Lower down payments mean higher loan amounts)
- Lower costs: FHA loans have competitive interest rates because the Federal government insures the loans
- Less likely foreclosure: The FHA has been around since 1934 and will continue to be here to protect borrowers. Should borrowers encounter hard times after buying, FHA has many options to help keep them in their homes and avoid foreclosures
Why Choose FHA? (Top)
- Get to closing faster - easier to qualify:
- No minimum credit score is required
- Non-traditional credit is acceptable
- Low down payment
- Non-occupant co-borrower is permitted
- Expanded qualifying ratios
- Protections and advantages:
- No prepayment penalties
- Fully assumable
- Default assistance
- Lower premiums
- Non-credit qualifying streamlines refinances
- Competitive interest rates and lower premiums
- Compatible with industry requirements on:
- Appraisal and repair
- Closing costs
- Lender insurance
- Automated Underwriting Systems (AUS) using FHA's TOTAL Scorecard
- Similar documentation for comparable products
- FHA's loan products meet your borrowers' needs:
- Flexible buy and repair with Streamlined 203(k) mortgage
- Reverse mortgage (HECM)
- 95% cash-out refinances
- Manufactured homes
- Construction - permanent mortgage
- Works well with state and local agency products
- Myth: Takes more time processing
Truth:
- Takes no more time than a conventional loan
- Adds no additional or special requirements
- Uses TOTAL Scorecard/AUS approval allowing you to complete a loan in the amount of time it takes to get the appraisal
- Myth: More paperwork
Truth:
- Requires only one additional document signed by the borrower
- Myth: Higher costs
Truth:
- Rates competitive with the best in the industry
- Lender insurance programs eliminate shipping and reshipping costs
- Streamlined loan process
- Myth: The borrower can't pay certain loan costs or fees
Truth:
- FHA eliminated non-allowable closing cost fee schedule (ML 06-04, 06-07)
- The borrower, or any interested party to the loan, may pay all reasonable and customary charges
- Myth: FHA is too restrictive
Truth:
- FHA provides guidelines for underwriting - same as industry investors
- FHA allows for manual underwriting for all loan programs - some in the industry will not approve a mortgage loan without an automated approval
- Automated Underwriting Systems approval is not required - allows for hands-on, common sense judgments
FHA's primary mortgage program (Top)
Mortgage Insurance for One-to-Four Family Homes [Section 203(b)] is the centerpiece of FHA's single-family mortgage insurance programs and the most commonly used program. It has these advantages:
- Availability: in all areas of the country, provided a market exists for the property and the home meets HUD's minimum property standards
- Versatility: may be used to purchase or refinance a new or existing one-to-four family home in both urban and rural areas, including manufactured homes on permanent foundations
- Adaptability: lenders typically offer terms at 15 or 30 years
- Negotiability: interest rates are negotiated between the borrower and lender
How to Become an FHA-approved lender (Top)
Get started with FHA-insured mortgage products as a new FHA-approved lender or recertify your current approved status. The FHA lender approval requirements vary for different levels and types of lender participation. The first step is to obtain an application package. Select one of the following:
Title II Lender Application Package
You will need all these items to submit a Title II mortgagee application:
Be very careful to follow the instructions that follow for mailing in your application and fee. The fee goes to the lockbox and the application goes to FHA headquarters. The lockbox address is different for each type of application.
Mail the application fee with a copy of the application to the following payment lockbox:
HUD
P. O. Box 198619
Atlanta, GA 30384
Mail the completed application and attachments to:
U.S. Department of Housing and Urban Development
Attn: Lender Approval and Recertification Division
451 7th Street, SW
Room B-133/P-3214
Washington, DC 20410
For overnight delivery of the application:
U.S. Department of Housing and Urban Development
Attn: Lender Approval and Recertification Division
490 L'Enfant Plaza East, SW Suite 3214
Washington, DC 20024
Phone: (202) 708-3976
FAX: (202) 755-0303
How long will it take to become an FHA approved lender?
The total processing time is typically 30 to 45 days from receipt of the application package.
See Chapter 3 of the Title II Mortgagee Approval Handbook 4060.1 for an explanation of application processing and detailed explanations on each required document.
Can I check the status of my application?
Please wait at least 30 days after we receive your application before you email fhalender@hud.gov or call (202) 708-3976 to check the status. Give us your applicant TAX ID number with your inquiry.
Title I Lender Application Package (Top)
You will need all these items to submit a Title Imortgagee application:
Be very careful to follow the instructions that follow for mailing in your application and fee. The fee goes to the lockbox and the application goes to FHA headquarters. The lockbox address is different for each type of application.
Mail the application fee with a copy of the application to the following payment lockbox:
HUD
P. O. Box 198608
Atlanta, GA 30384
Mail the completed application and attachments to:
U.S. Department of Housing and Urban Development
Attn: Lender Approval and Recertification Division
451 7th Street, SW
Room B-133/P-3214
Washington, DC 20410
For overnight delivery of the application:
U.S. Department of Housing and Urban Development
Attn: Lender Approval and Recertification Division
490 L'Enfant Plaza East, SW Suite 3214
Washington, DC 20024
Phone: (202) 708-3976
FAX: (202) 755-0303
How long will it take to become an FHA approved lender?
The total processing time is typically 30 to 45 days from receipt of the application package.
Can I check the status of my application? (Top)
Please wait at least 30 days after we receive your application before you email fhalender@hud.gov or call (202) 708-3976 to check the status. Give us your applicant TAX ID number with your inquiry.
