Ask the Expert: Why FHA is still an attractive alternative

SOURCE: Mortgage News Feed

I agree that FHA has increased their rates to a point that the program is less attractive. However there are two reasons the program is still an attractive alternative. FHA lending standards can be less restrictive than conventional alternatives. It is interesting that the guidelines may not read much differently, but in reality some lenders will offer a lower credit score on FHA vs. conventional. Why? For one thing, FHA loans are 100% insured, which is part of the reason that the insurance costs more as compared to conventional insurance which covers the lender typically down to 75%.

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Each week we post articles on FHA/VA Government news topics, ranging from FHA Direct Endorsement Underwriters, to current FHA underwriting guidelines, to new FHA rules/regulations, FHA compliance, FHA lending requirements and much more! PLEASE NOTE: We are NOT owned, operated or affiliated with HUD, FHA or the Federal Government in any way.

 


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