In 1934, the government created the FHA (Federal Housing Administration) to create opportunities for the creation of more housing for Americans. Today, in the 21st century, the FHA mortgage program is still a crucial and unique part of the home mortgage landscape. The FHA mortgage program allows unsupervised Direct Endorsement FHA lenders to make their own approval decisions on FHA mortgages – without being restricted by FICO scores. FHA Unsupervised Direct Endorsement Lenders have the authority to originate, underwrite, approve and close FHA mortgage loans for one to four family owner occupied properties without prior oversight or prior approval from the FHA. The FHA lending program carries insurance that conditionally insures the lender against loss, as long as the FHA review of a defaulted loan results in the FHA approving the original underwriting decision of the Direct Endorsement lender. Should the FHA disagree with the underwriting decision of the originating lender, they have the right to demand that the lender indemnify HUD against any losses The FHA mortgage loan programs do have certain statutory limits, such as maximum loan amounts for each county within a state, based the median home price and income levels of the MSA contained therein. For single family homes, the lower priced areas have loan limits that start at $200,160 to a high of $362,790. Two family limits range from $256,248 to a high of $464,449. Three family limits range from $309,744 to $561,411. Four family limits range from $384,936 to $697,696. Loan to values for rate and term refinances are limited to 97%. Loan to values for cash out refinances are limited to 85%, except for single family homes owned for more than 12 months without mortgage lateness in the last 12 months, when a 95% loan to value is allowed. Only FHA mortgage lending allows the underwriter to make a prudent credit decision without being constrained by the borrower’s FICO scores, inflexible debt to income ratio benchmarks, or other restrictive metrics. The ability to apply prudent, common sense underwriting and extensive experience to a consumer’s mortgage application empowers approved FHA mortgage lenders to offer sub prime lending victims who seek relief from the significant payment increase that they face when the fixed period ends and the loan rate re-sets, resulting in payment increases of 30% and more within one year of the re-set. FHA mortgage loans do not carry prepayment penalties. FHA refinance mortgage loans afford borrowers the ability to refinance any kind of mortgage loan that they now have with an FHA refinance. FHA mortgages are available for owner occupied one to four family residences. FHA mortgage loans do not have any maximum income limits or maximum property values – any American citizen or legally registered alien can take advantage of the benefits and advantages that FHA refinances offer.

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