Are FHA Loans Assumable? You Bet!
A great financing option that real estate agents need to know about ,if they are listing a home for sale, is if the home has an FHA mortgage that was originated after December 15, 1989. Why? Because the loan is assumable! More Info and Mortgage Talking Points(tm) “FHA Assumptions=More Sales” can be found at www.MortgageCurrentcy.com
Here are some of the rules:
Buyer must qualify based on credit–(Servicer may be more lenient about the score)
Loan Fees are lower–(Servicer will charge for processing–usually a flat fee)
Seller may pay buyer’s closing costs
Secondary financing and borrowed funds may be used by buyer (Must qualify for all payments)
Sellers will be released of liability
What’s prohibited: If buyer purchasing to use as investment property or 2nd home (some exceptions heres), loan is NOT assumable
At the time the home is listed for sale, real estate agents should order an “FHA Assumption Package” from the company servicing the loan. They will also be the ones processing the paperwork. Great info to share with real estate agents–especially on Face Book!