RE75R12: Federal Housing Administration (FHA) Loans

Approved Feb. 14, 2012

1. The foundations of an FHA loan. Its beginning and evolution to the present day.

A. Information on development of the FHA loan

1. Historical roots and beginnings

2. How the FHA loan has evolved?

3. What are the objectives of the FHA?

4. Who originates & underwrites the loan?

5. Who insures the FHA loan?

2. Who is eligible for an FHA Loan?

A. How a consumer obtains an FHA loan?

1. What is a FHA loan?

2. How it can be used?

3. List of uses for a FHA loan

4. Special Grants available from FHA

3. Eligibility for a FHA loan

A. Credit Requirements

1. Minimum FICO Score & investor requirements

2. Federal Debts and impacts

3. Bankruptcy and Foreclosure

4. Judgments

5. Collection accounts minor & major

4. FHA Loan Income Qualification Ratio’s

A. Income Requirements for a loan

1. No Income Limits for FHA eligibility

2. Low Down payment requirements

3. Qualification ratios for an FHA loan

4. How strong files can affect Qualification ratios

5. Compensating factors used in FHA loans

6. Qualification Ratio example

5. The FHA county limits for buyers

A. Massachusetts County Limits

1. Single Family limits

2. Multiple Family limits

3. How down payments are calculated

4. Reserves needed

6. FHA mortgage Insurance

A. Up Front cost and monthly insurance premium

1. What is the mortgage insurance premium?

2. Who pays it?

3. How much is it?

4. What exceptions are there to the (Mortgage Insurance Premium -MIP)?

5. Mortgage Insurance Example – Upfront Mortgage Insurance Premium


7. Seller Contributions, Closing Costs and Loan Assumptions

A. What can the seller contribute to transaction?

1. What monies can and cannot be contributed by the seller?

2. What are eligible closing costs?

3. FHA loans can be assumed and by whom

8. The FHA Appraisal Process

A. Who conducts the FHA appraisal and what they look for?

1. FHA Appraisers and who selects them?

2. FHA eligible & ineligible properties

3. Red flags-condition, safety and habitable

4. Private road requirements

9. Processing, Underwriting and Closing the FHA loan

A. Who processes, underwrites and approves the FHA loan?

1. Application & processing by FHA approved lenders

2. Verification of all information prior to FHA approval

3. Underwriting requirements needed for an FHA loan

4. FHA appraisal reviews and conditions corrected

5. Title work reviewed

6. Closing and final FHA package requirements


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