FHA Access–A Safe Way to 103% Financing

A couple of weeks ago I wrote an article called Qualifying For a Home Loan: 6 Reasons to Consider FHA.  Not all lenders have been around long enough to remember FHA loans.  Those who have remember the extra requirements that made FHA loans unpopular with sellers.  But it’s a buyer’s market today, and all that has changed.

Last week I originated my first FHA Access loan in 7 years, and I was reminded what a great program it is.  FHA Access is a 2nd loan that pairs with a traditional FHA 1st and covers the 3% down payment and all of the buyer’s closing costs.  The Access loan is an 8%, 20–year fixed rate mortgage for up to 6% of the purchase price.

While FHA loans have no income limits, Access does.  The borrower’s income may not exceed 120% of the median income for the area. For most of the Sacramento region, the limit is $78,480.  That’s pretty generous and shouldn’t be a problem for most people.  FHA loans are no longer subject to strict debt to income ratios—instead we submit them through automated underwriting—Access debt to income ratios cannot exceed 43%. 

With all the exploding 100% loans out there, FHA Access offers a path to sustainable home ownership without a big down payment.

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