Can You Afford to Say No to FHA 203K Borrowers?
This is for all the Real Estate Agents out there!
Today I came across yet another great post encouraging Real Estate Agents to consider those buyers who want to use FHA financing. As a 203K Mortgage Lender I am trying to do my part in spreading the word that FHA Loans have a lot of benefits that the standard Conventional loans don’t. So read on…you may be pleasantly surprised on how far FHA has come.
This article comes from a blog posted on Realtor.org
Here is an excerpt :
By Robert Freedman, Senior Editor, REALTOR® magazine
Hopefully you don’t consider it a mark against buyers if they want to use FHA financing. It’s true it typically takes longer to process FHA-backed financing than it does conventional loan applications, but with the challenging credit environment, for a big chunk of your potential clientele the only financing available to them is FHA. What’s more, these days it’s taking longer to get conventional financing applications processed, so the time gap between the two has narrowed considerably.
Yet here in NAR we continue to hear that sellers—and some sales associates—are discouraging FHA borrowers from making offers on homes in the outdated belief that FHA is significantly slower and more paper-intensive than conventional financing.
Not true, says NAR Senior Policy Analyst Megan Booth. While it’s the case FHA still requires borrowers to jump through some hoops that don’t apply to conventional borrowers, the agency has undergone a sea-change in the last several years in the way it does business.
The agency is far more flexible and far more quick in its processing than it ever was in the past. Even its appraisal requirements are very much like those in the conventional market.
What’s more, FHA has just made some rule changes that increase the attraction of its financing for condos, including site condos. If you’re not familiar with site condos, they’re units in developments that look and feel like single-family communities but are structured as condos. We’re seeing more of these types of communities and FHA has moved out front by changing its rules to accommodate them.
To be sure, the agency faces challenges, but it remains that rare federal agency that is growing (35 percent of residential loans today) and making money for the federal government.
If you have FHA borrowers interested in a listing, can you afford to discourage them from making an offer? FHA is not the agency it was 10 years ago; you might be surprised at how the Depression-era mortgage insurer is moving into the Twenty-first Century.
This is very encouraging to Home buyers who are having trouble getting their offers accepted. I hope all Agents will be more open to FHA financing and reconsider the benefits that this type of financing provides.