Home Access May Be Closer Than You Think! New FHA loan Programs.
Sun American Mortgage Company (SAM) is one of the only lenders in the State of Arizona with the new FHA .5 % Down Payment Assistance Program, also called the Access program. Though used primarily by first-time home buyers, there is not a first-time home buyer requirement for this program. Buyers who have owned a home within the last three years are eligible for the program.
The FHA Access program combines FHA financing with an affordable second trust deed for 3% of the sales price. The Access second is a low, fixed-rate, fully amortizing second trust deed. Because FHA generally only requires a 3.5% down payment, the Access program makes it possible to finance up to 99.5% of the purchase price.
Eligibility is based on income, and credit qualifying is the same as the accompanying FHA purchase loan. The program is available for single-family homes, FHA eligible manufactured homes on a permanent foundation, condominiums, and two-unit properties. Properties that were recently acquired by the seller (referred to a flip-sales) are also allowed subject to FHA guidance on flip-sales in many cases.
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The income limit is 115% of Area Median Income as determined by HUD. This is regardless of family size. Only the income used to qualify for the FHA mortgage is considered in the income limit for the Access program. Income from non-purchasing spouses and other family members not on the loan are not counted toward the income limits. Additionally, non-stable income sources that are not used to qualify are also excluded.
Unlike many down payment assistance programs, there is not a credit score requirement. Homebuyers with no credit history or credit score may also qualify. However, if there is a credit score, FHA requires a minimum 580 to qualify for maximum FHA financing. Because the credit guidelines are the same as FHA, it makes it easier for borrowers with less than perfect credit to qualify. Another great benefit of the Access program is that there is no potential Federal Recapture tax or early sale penalty.
Because the FHA Access program was designed to help low-to-moderate income earners, assistance is only available to purchase owner-occupied primary residences. Non-occupant co-signers are not allowed. Additionally, the percentage of gross income that can be allocated to housing expense and debt payments (debt-to-income ratio) must meet FHA and the program’s requirements. The total allowable debt-to-income ratio ranges between 43-48% depending on credit score and compensating factors.
Homebuyer education and completion certificate is required for all borrowers obligated on the loan. Homebuyer education can be completed at no cost through an acceptable source or through a HUD Approved Non-Profit agency. This can usually be done online and/or over the phone. For information on housing counseling, or for any addition information on the FHA Access program, please call a Sun American Mortgage professional today.
