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FHA Advantage | DAVIS-PENN MORTGAGE CO., Houston, TX

FHA Advantage

What is the FHA Advantage?

Using FHA Mortgage Insurance has distinct advantages to the borrower:

  • Fully amortizing, fixed rate loans for up to 40 years allowing borrowers to amortize larger loans.
  • Only federally insured loans may be securitized through Ginnie Mae, the least expensive way to achieve a "AAA" credit rating.
  • Reduced interest rate risk on new construction/rehab projects, locking both construction and permanent interest at loan closing.
  • Loans are non-recourse during construction and permanent financing.
  • Loans of up to 85% loan to cost on new construction/rehab projects for market rate communities, increased to 87% or 90% for affordable communities.
  • Refinances or Purchases of up to 90% of value for affordable communities and up to 85% of value for market rate communities.
  • Affordable communities may use up to 90% of net operating income to amortize an FHA loan, resulting in debt coverage ratios as low as 1.11 and market rate communities may use up to 85% of net operating income.