FHA Loan Info For Aurora IL
Federal Housing Administration's History
Communities like Aurora IL benefit from The Federal Housing Administration's many home ownership programs. FHA was formed in 1934 as part of the Roosevelt administration's 'New Deal' program. The FHA's purpose and mission has remained consistent for almost 75 years. They wants to contribute to creating and preserving strong neighborhoods and communities. The FHA also intends to continue and expand homeownership. Additionally, they seek to help stabilize credit markets in times of economic disruption. The Federal Housing Administration has been and continues to be a major force in home ownership in the Chicagoland area. In Aurora IL many homes are purchased and refinanced using FHA financing.
FHA Home Loan Programs
The FHA now offers a large variety of loan programs for properties in the Aurora area. FHA mortgages can have the fixed type or can be adjustable rate type mortgages. Many prospective borrowers find these loans attractive because they usually require very small down payments. Usually as low as 3% down with allowed seller assist closing costs. Plus, gifts can be used for down payments and even closing costs. FHA loans also have more lenient qualifications so they are easier to meet than traditional mortgages. In todays market, a particular benefit is that FHA does not require a minimum FICO score. These FHA loan programs allow a home purchase only two years after a bankruptcy filing. It's the combination of all these relaxed standards that help to make Federal Housing Administration loans so attractive to Aurora, Illinois buyers.
Rehabilitation Mortgage Insurance
Section 203(k) insurance provides a way for homebuyers to finance both, the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage. The Rehabilitation Mortgage also allows for financing the the rehabilitation of an owners's existing home. FHA approved lending institutions such as approved banks, savings and loans, and mortgage companies are allowed to make loans covered by Section 203(k) insurance.
In the Fox River Valley, where Aurora is located, many Rehabilitation Mortgages have been used to improve properties and save money.
Reverse Mortgages
As the population of the U.S. ages reverse mortgages are becoming popular. Basically, a reverse mortgage is a special type of home loan that lets the owner convert the equity in his/her home into cash. These Reverse Mortgages can give older Americans greater financial security. These loans can be used to supplement social security, make home improvements, meet unexpected medical expenses and much more.
Energy Efficient Mortgages
Energy Efficient Mortgages, (EEMs), recognize that reduced utility expenses allow a homeowner to pay higher mortgage costs to cover the investment of energy improvements on top of the mortgage.
FHA Energy Efficient Mortgages provide mortgage insurance so a buyer can purchase or refinance a primary residence and build the cost of energy-efficient improvements into the mortgage. This program can be particularly useful for some of the older properties in Aurora, IL. The borrower does not actually have to qualify for the additional funds and is not required to make a down payment on it. This mortgage loan is funded by lending institutions, such as mortgage companys, banks, or savings and loans. In this case, the mortgage is insured by HUD not the FHA.
FHA Refinance Requirements
The FHA has allowed streamline refinances on insured mortgages since the early 1980's. The term "streamline" refers to the amount of documentation and underwriting that needs to be performed by the lender. The current basic requirements of a "streamline" refinance are:
· The mortgage to be refinanced should be current on payments (no delinquent payments).
· The mortgage that's to be refinanced must already be FHA insured
· The refinance must result in a lowering of the borrower's monthly principal and interest payments.
· Cash may NOT be taken out on mortgages refinanced using the streamline refinance process.
FHA financing in Aurora IL has been popular for all the reasons mentioned above. Fortunately the prices in Aurora help to make FHA home loans an attractive alternative for many purchasers. While conventional loans are still widely available, FHA Home loan use is expected to grow considerably over the next few years.
If you would like more information about FHA loan programs for Aurora IL area homes, please call me today. I'm Ida Hand, Century 21 Pro-Team Realtor, and I can be reached at 630-806-2816 direct line.
