We Are The FHA Experts

AMC-America’s Mortgage Company has long been known for its expertise in FHA loans. An FHA loan is an affordable and attractive financing option for first-time home buyers because of its:

• Low down payment requirement (between three and five percent for most programs).

• Assumable (Even fixed rate FHA mortgages are assumable to qualified buyers).

• The closing cost can be paid by the seller (up to 6%).

• Choice of loan programs (FHA has both fixed rate and adjustable rate mortgages).

• Flexible qualifying criteria (making loan approval easier).

• The entire down payment as well as the closing costs can be from gifts.

• No cash reserves are required on one and two family homes.

• Rehabilitation financing available

These same features make the FHA program equally beneficial to move-up and refinance homeowners.

FHA helps make home ownership a reality. Back in 1934, Congress established a federal home loan program to encourage and facilitate home ownership. The Federal Housing Administration (FHA) was created to manage the program. FHA, now part of the Department of Housing and Urban Development (HUD), is not a direct lender. Instead it insures FHA lenders against foreclosure risks making them more willing to offer these loans.

Direct Endorsement speeds loan processing. In 1983, HUD established the Direct Endorsement Program, permitting eligible lenders to process FHA loans (from application through closing) without prior HUD approval. We can process FHA loans quickly and efficiently in-house, while saving FHA customers valuable time.

Mortgage Insurance Premiums allow FHA to work. As dictated by HUD, the Federal Housing Administration collects a Mortgage Insurance Premium (MIP) with each loan it insures. The fee goes directly to FHA and is not retained in any part by the lender. MIP helps to defray costs and allows the FHA program to remain viable.

Historically, mortgage insurance premiums were collected by the lender monthly and remitted to FHA once a year. However, the National Housing Act of 1983 modified this procedure so that the entire premium would be collected one time (at closing) for most FHA programs. In 1990, the structure of the Mortgage Insurance Premium changed again, and now most mortgages are subjected to an up-front MIP (UFMIP) and an annual premium.

Borrowers may pay the up-front MIP charge all cash at closing , or they may finance it by adding it to their

mortgages (according to the factors issued by HUD/FHA). When the borrower chooses to finance the up-front MIP, the loan may exceed the usual FHA loan maximum by the amount of the up-front MIP.

When an FHA loan is paid off before maturity, the mortgage holder may receive a refund (formula issued by HUD/FHA). Mortgages may also receive a share of the MIP's participating reserve account when the loan insurance is terminated in the later years of the mortgage. However, when an FHA insured mortgage is assumed, the insurance continues in force, and there is no refund of unearned premiums or distributed shares.

Presently, loans on condominium units under Section 234 are not included in the one-time MIP payment program. Therefore, monthly mortgage insurance (MI) payments are still collected on condominium loans.

For more information, please contact

AMC-America’s Mortgage Company at 1-888-564-5454.