Answering Your Questions About FHA Loan Limits

How can you have a loan amount that’s higher than the FHA limit in Lake County? Can a seller hold a small note for an FHA, like a second mortgage? Today we’ll answer both of these questions.

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In the final installment of our series where we answer agents' questions, today we’re fielding a two-parter from Allison Wheatley of First Realty.

First, she asks, “Someone said that the FHA loan limit in Lake County is $274,850; however, one of my buyers has a loan amount of $285,000. How does that work?”
Secondly, she asks, “Can the seller hold a small note for an FHA, like a second mortgage?”
To answer her first question, the FHA does set loan limits per county, and they’ll change based on what county you live in. The FHA loan limit in Lake County is $274,850, but that’s not the purchase price limit. People can purchase homes for however much they want, but the FHA has stated that they will not lend any more than the $274,850 limit in that county.

FHA loan limits change based on what county you live in.

For example, if somebody wants to buy a house that costs $300,000, that’s perfectly OK; however, they’re going to have to put down the extra $25,150 to bring the base loan amount down to the FHA loan limit in our county.

To answer her second question, the FHA doesn’t allow interested party contributions such as seller-held second mortgages into the transaction. The only thing the sellers can do, per FHA guidelines, is help pay up to 6% in closing costs into the transaction.
If you or your buyers have any other questions in regard to FHA loans or their requirements, please don’t hesitate to give us a call. We’d be happy to help!

What Credit Scores Are Needed for Loans?

Today we’re answering a question about credit score requirements for different types of home loans and how you can get your score up if you don’t qualify.

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Today we’re answering more questions from real estate agents about home loans. The question we’ll address today is, “What credit score is necessary for each type of loan?”

At Success Mortgage Partners, our credit score requirements might be a little different than other places, but we do have very liberal credit score requirements for each particular loan type. These are the scores we will lend for by type:

• FHA: 600
• VA: 600
• USDA: 620 (if we are generating a credit score)
• Conventional: 620

There are things we can do for buyers on the borderline with credit score.

There are things we can do for buyers on the borderline with their credit score, such as helping people have a higher balance on one of their credit cards. We can coach them on paying that balance down and working on credit rescore to get them to the point of qualifying.

If someone is way out of the realm of qualifying, we don’t just turn our backs. We make referrals to credit repair companies that we’ve worked with who we know do a good job and care about their clients. Just like lenders, not all credit repair companies are created equal, so we’ve done a lot of research in this area.
If someone you know has a score that’s below our requirements, don’t hesitate to reach out to us to start a conversation. If you have any other questions about lending guidelines or how we can help, give me a call or send us an email. We’d love to help!