GENERAL INFORMATION FOR FHA LOANS

1. ACQUISITION COST:

Loan amount are based on acquisition Cost, of appraised value if less. Acquisition Cost is not always the same as the sales price, however:

1. If the Seller is paying all closing cost, Acquisition Cost is the same as the contract sales price.

2. If the Seller is paying none of the closing cost, the total amount of the allowed closing cost is added to the contract sales price to give the Acquisition Cost.

3. If the Seller is paying part of the closing cost, the amount the Seller is not paying is added to the contract sales price to give Acquisition Cost.

2. MAXIMUM LOAN AMOUNT - Depends on who is paying (how much) closing cost as to how much the maximum loan will be:

1. Acquisition Cost up to $50,000.00: 97%

2. Acquisition Cost over $ 50.000.00: 97% of the first $25,000.00, plus 95% oi the remainder.

3. MAXIMUM LOAN AMOUNTS PER COUNTIES - Greenville, Spartanburg, Pickens, and Anderson Counties the maximum loan is $100,700.

4. MORTGAGE INSURANCE

FHA requires Mortgage Insurance on all FHA loans

regardless of the LTV. The Mortgage Insurance is typically added to the loan and financed for the life of the loan. There is also a monthly mortgage insurance premium in addition to the "up front 11 premium. 5 0 % of @-the base loan amount divided by 12).

MIP for 30, 25, 20 Year Term is 2.25% of loan amount MIP for 15 Year Term is 2.0% of loan amount

5. CLOSING COST

A portion of the non-recurring costs may be financed. The amount is figured according to the Sales Contract (which states how much either the Seller or the Borrower is paying towards the closing cost).

6. POINTS

Points are figured on the total loan amount (including the financed MIP).

7. SELLER CONTRIBUTIONS

The Seller can pay discount points and non-recurring -closing cost, not to exceed 6% of the financed loan amount.

8. GIFT FOR DOWN PAYMENT

FHA does allow a gift for the down payment; however, the source of gift must be verified and the donor has to be a relative. Must furnish a copy of the donor's cancelled check, and the deposit slip showing funds in account. FHA will also allow "mattress money" but borrower has to be able to show that he was truly capable of saving the money and give good, strong, valid reason for not having put the money in a bank account.

9. QUALIFYING RATIOS

Always use 29% and 41%. (Always quote payment .625% higher, ie: if interest rate is 8.0%, then quote 8.625% to compute the 'principal and interest. This will take care of the FHA insurance which is added back to the loan amount and you will not have to, do the extensive ---calculations.

10. FHA will not allow the Borrower to certain customary closing cost such as "Tax Service Fee", "Underwriting Fee", or "Document Preparation Fee".

11. No Second Home Financing

12. No Investor Home Financing

13. New Homes or Home less than one year old, that have not been built under FHA specifications or under the 210 warranty program, borrower must make down payment of 10%.

14. FHA does require hook-up to sewer and public water, if it is available.

15. If home is on well, the water will have to be tested.