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© National Association of Mortgage Processors (NAMP) 2007

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    Major Points

    Would eliminate the 3% down payment minimum
    and would lengthen loan terms to 40 years in order to lower monthly costs to borrowers
    Would create a risk-based insurance structure to
    match premiums with credit profile of the borrower
    Would increase and simplify FHA’s loan limits

    Additional Points

    Permits FHA to put condos into the regular set of SF
    products instead of being a specialized product which
    is burdensome to maintain.
    Modernizes the manufactured housing program,
    eliminating "portfolio" insurance and reduces
    risk-based costs, and increases the loan limits to reflect the real cost
    Eliminates cap on number of HECMs that FHA insures

    Borrower Benefits

    Low- to moderate-income homebuyers would be prime beneficiaries
    FHA financing would be less costly for lower-income homebuyers
    Safer mortgage at a fair price
    Lower rates to credit-impaired borrowers
    Less chance of borrowers going “sub-prime” w/substantially higher interest rates
    Lower than market-rate with expensive private mortgage insurance

    FHA Benefits

    Allows FHA to remain relevant in today’s lending market
    Would return FHA to its traditional role as an important financing option in today’s housing market
    Would remove the barriers of outdated legislation and increase homeownership opportunities for millions of Americans
    Supports a society of ownership
    Still protects the soundness of the MMI Fund
    FHA expands the borrower pool, resulting in more business for everyone
    Increases homeownership opportunities for millions of Americans

    FHA was created in 1934 to give homebuyers access to reasonably priced mortgages under fair terms. Over the years, it has helped more than 36 million families become homeowners, and now it needs to be able to adapt to today’s marketplace. This legislation will bring FHA into the 21st century and offer hard-working Americans a variety of safe homeownership options at a fair price. HUD is the nation’s housing agency committed to increasing homeownership, particularly among minorities.

    The U.S. House of Representatives passed The Expanding American Homeownership Act (H.R. 5121) on July 25 by overwhelming vote of 415 to 7. The measure is now being considered in the Senate (S. 3535)

    Source: http://www.hud.gov/offices/hsg/fhareform/keypoints.cfm
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      CommentAuthornancy_m
    • CommentTimeJan 10th 2007
     
    wow.. that was very helpful.. thank you!
  2.  
    Thank you for the information. I used to do FHA loans all the time and have found myself doing less and less now that we have 100% sub-prime and My Community options. I can see it will be helpful to get myself familar with FHA again. Thanks
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