Kenny Leather, Loan Consultant Extraordinaire

Now that the dust has settled a bit regarding what kinds of real estate purchase loans are available these days, I thought I'd check back in with Kenny Leather of Princeton Capital and find out what the buzz is all about regarding new FHA loans...

Bobbie: Can you give us the lowdown on the new FHA loans? Why would someone want to use this product?

Kenny: Well, it's one of the few games in town for a 3% down payment and less than perfect credit.

Bobbie: So, does that mean there are still other 3% down products for people with better credit?

Kenny: No... well, there are Cal HFA loans that do mostly the same thing...

Bobbie: But for people with less than perfect credit, FHA is the way to go?

Kenny: Yes. This is really taking the place of the subprime market products (that are no longer available).

Bobbie: I've heard compliance requirements for sellers are less strict than the old guidelines, in terms of the property including certain features like screens on windows and special floor furnace vents?

Kenny: Yes, that is true compared to the old FHA guidelines, but compared to non FHA loans, the properties have to be in slightly better shape. For example, when an appraiser appraises a house with a non-FHA loan, they are just making sure the house is there and the value holds up; when they visit an FHA house, they additionally have to make sure the furnace is working, the water is running, etc.

Bobbie: How else is it different?

Kenny: For starters, until the end of December, we can go up to a loan amount of
$729,750. Other advantages include no income limitations, and we can go a little bit higher on the debt to income ratios.

Bobbie: Can you explain debt to income ratios, for our readers?

Kenny: It's when you take your debt divided by your income and you get a ratio. The lower the ratio the better.

Bobbie: Ok, we've reached information overload.

Kenny: I know and I agree!


So readers, let this sink in, and I'll continue the interview in a part two later! There's always more to learn...

Oh by the way, Kenny works in the San Francisco East Bay Area and would be happy to talk with you if you need his financial expertise. Call him at (510)409-7232 and interview him yourself!