Posted On: Friday, June 1, 2012 - 2:00pm | Posted By: Kevin Koerner
Topics: Market Statistics | Tags: Bay Area, collections, credit, credit score, FHA, finance, first time home-buyer, good news, high-cost area, HUD, leniency, low down payment, real estate, san francisco
Until July 1, 2012, HUD (the Dept. of Housing & Urban Development) has suspended its requirement that borrowers pay off collections totaling $1,000 or more when qualifying for an FHA home loan. FHA loans have a long history of leniency and understanding when it comes to financing homes for buyers who are starting over or purchasing for the first time. Particularly advantageous is the combination of the FHA minimum credit score of 580 and a 2.5% down payment, compared to a 620 score with more down for conventional financing (Fannie Mae/Freddie Mac). Additionally, HUD recognizes San Francisco and other Bay Area counties as higher cost areas, so loan amounts range as high as & $729,750 on a single-family home (and some condos), $934,200 on a duplex, and $1,403,400 on a quadruplex. Even better, under certain conditions, tenant income may be used to help a buyer qualify.
Sources: SFGate & HUD