I've seen a significant increase in FHA loan activity in the Chicago market over the past 12 months and with the announced enhancements from FHA coming on February 1st, I expect that activity to increase further. There have been regulations/guidelines that have kept clients from being able to use FHA on some developments which include; right of first refusal, new construction pre-sale, minimum number of units in a building of 4, FHA loan exposure of 30%, etc.
Below are some of the enhancements coming on February 1st.
-New Construction pre-sale lowered to 30%
-Right of first refusal allowed
-Projects may have as few as 2 units
-FHA loan exposure increases to 50% for new construction projects and 100% for established projects
With the low down payment minimum of 3 1/2%, flexible debt to income ratios, and more lenient credit score requirements, the enhancements for FHA loans will open doors for buyers and sellers alike. If you are interested in finding out more in regard to FHA loans feel free to contact me at any time.