Orange County FHA, VA & First Time Buyer Loan Information

My goal is to provide valuable information for home buyers, both First Time Buyers and Move Up Buyers. This information will be about loan programs such as FHA ,VA, Conventional Fannie Mae and Freddie Mac, Reverse Mortgages, and even Portfolio Jumbo programs. I will also touch on tax advantages of homeownership, Rent vs. Own analysis, and any other aspect of loans and home ownership that will be of interest to Orange County home buyers and homeowners.

FHA Will Be the Loan of Choice for First Time Buyers in 2010

Just like in 2009, 2010 will be a big year for the FHA loan program and Orange County First Time Buyers. There are several reasons for this, one of them being that there just aren't many competing loan programs.

4 Reasons FHA will Continue to be Preferred by Orange County First Time Buyers

  1. Only 3.5% down payment requirement. Other Conventional programs require at least 10% down, as long as the borrowers FICO scores are 740. There are a few niche programs, such as the Fannie Mae Homepath program which is for specific Fannie Mae owned properties, or the VA loan program which allows for 100% financing but is only for VA eligible borrowers.
  2. The FHA credit guidelines are more flexible than Conventional financing. Although technically FHA does not require a minimum FICO score, most lenders want the borrower to have at least a 620 FICO. Even if a Conventional buyer has 20% down down payment, they would most likely get a lower interest rate by choosing FHA rather than Fannie Mae/Freddie Mac.
  3. Down payment can be a gift with FHA. Not only is the minimum down payment only 3.5%, but the down payment can be a gift from a relative. It can also come from a 401K loan without needing the count loan payment in the debt to income ratios. With Conventional financing, if the down payment can be gift if there is 20% down. If the down payment will be less than 20%, than at least 5% of the purchase price must come from the buyer.
  4. FHA allows for higher debt to income ratios. the guideline total debt ratio for FHA is 43%, but for borrowers with just "decent" credit, it is not unusual to get an approval with a ratio as high as 55%. Fannie Mae recently lowered the debt to income ratio they will accept to 45%. With solid compensating factors, such as reserves and perfect credit, Fannie Mae may allow the ratio to be 50%, but again we are assuming 20% down, not the 3.5% the FHA is looking for.

First Time Buyer Tax Credit offers Incentive to Act Fast

With the extension of the $8,000 First Time Buyer Tax Credit, Orange County First Time Buyers have until April 30, 2010 to have a signed accepted contract to buy a home, and then until June 30, 2010 to close the transaction. With property values down to affordable levels not seen in many years, first time buyers are finding they can buy a home for a payment similar to their rent payment. This, combined with the $8,000 "gift" from the government, should result in a lot of Orange County first time buyer activity in the first quarter of 2010.

The First Step is FHA PreApproval

Actually, the first step should be to talk to an Orange County Direct Lender who is an FHA expert. Your lender should be able to prepare loan scenarios based on your qualification and goals which will give you a good idea of what it will take to buy a home. It is important to know how much of a payment you are comfortable with, along with how much money you will need to buy a home. The initial prequalification process can be quick, but the search for the perfect home can take some time. Orange County First Time Buyers who want to take advantage of the $8,000 First Time Buyer Tax Credit need to act quickly.

Authored by Tim Storm, an Orange County, CA Loan Officer - Please contact my office at Home Point Financial for more information about an Orange County, CA home loan.  949-829-1846

Contact us for your Orange County FHA Mortgage:

Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.

949-829-1846| tstorm (at)


Find Tim Storm on Google+


Subscribe to my blog Via Email:  Enter your email address:

Delivered by FeedBurner

Comment balloon 1 commentTim Storm • January 11 2010 01:08AM
FHA Will Be the Loan of Choice for First Time Buyers in 2010
Just like in 2009, 2010 will be a big year for the FHA loan program and Orange County First Time Buyers There are several reasons for this, one of them being that there just aren't many competing loan programs. 4 Reasons FHA will Continue to be… more
FHA, Short Sales, and Short Payoff Refi's in Orange County
On December 16 FHA came out with Mortgagee Letter 09-52, which provides guidance to lenders in how to deal with borrowers who have had a Short Sale and borrowers who are refinancing a "short payoff". This has been occuring quite a bit in… more
HO-6 Condo Insurance Rules that Orange County Home Buyers Need to Know
When buying a condo in Orange County, it is important to understand the insurance requirements. Whether the loan will be FHA, VA USDA, Fannie Mae or Freddie Mac, the lender will need to make sure the property is insured beyond the typical "… more
Orange County Home Buyers will Benefit from Extended and Expanded…
Its official! Orange County, CA homebuyers will have more time to purchase a home and take advantage of the First Time Home Buyer Tax Credit Set to expire on November 30, 2009, the tax credit was just extended through June 30, 2010, and includes… more
Extension on First Time Buyer $8, 000 Tax Credit is on Horizon for…
On November 4 the Senate voted to extend to First Time Buyer Tax Credit which would be a big boost for Orange County home buyers. The current tax credit program is set to expire on November 30, 2009. Deals that are currently in escrow are "… more
Orange County FHA Condo List and Spot Approval Program Get Another…
Orange County, CA condo buyers using FHA financing just got an extra month added to the upcoming deadline of the end of the Spot Approval program. Back on June 12, 2009, FHA Mortgagee Letter 2009-19 was released, detailing new FHA Condo project… more
The #1 Way An Orange County, CA Mortgage PreQual Becomes a Denial
Too often, Orange County real estate transactions fall out of escrow just when they are supposed to be closing. Why? While there are no specific statistics to back an answer to this question, 2106 expenses would seem to be good answer to that… more
Need to Know Information Regarding FHA Financing on a Non Approved…
The FHA Spot Approval program for unapproved condominium projects is going away on October 1, 2009. But realistically, it's already gone. Most lenders are not about to begin the Spot Approval process when only a few weeks remain. According to the… more
Learn How the FHA 203K Streamline Loan Can Help Orange County First…
The FHA 203K Rehab loan program is a great loan for Orange County First Time Buyers Currently there is a very tight supply of homes available in southern California, especially in the $250, 000 to $500, 000 price, which is a sweet spot for Orange… more
VA Loan Information for Orange County Home Buyers
The VA loan program is being heavily utilized by Orange County residents for the first time in several years. There are several reasons for this. The increase in the Orange County, CA VA loan limit for $0 Down financing to $593, 750 in 2010. The… more