FHA assumptions - Posted by Darryl

Posted by John on April 24, 2006 at 15:03:24:

We were discussing Non Qualifing assumable Mortgages which are no more. Yes current FHA/VA mortgages are assumable after 24 months. But a buyer has to qualify and be approved to assume one. They also need to pay an assumption fee as well I believe it is $395. but sure on this.

FHA assumptions - Posted by Darryl

Posted by Darryl on April 20, 2006 at 22:06:30:

I’d like to “buy” a home to live in. In the St. Louis, Mo area, we’ve had a Ford Plant shut down. And I’ve heard rumors of lay offs at the Chrysler Plant as well. I know there are people who used to work for these companies, who have non-qualifying, fully assumable, FHA mortgages that are 2 years old(er), with little to no equity. My plan is to find one of these homes and offer to assume the loan, thereby saving the present owners from possible foreclosure. I have a good income, but my credit is non-existent. Is this a good idea?

Re: FHA assumptions - Posted by John

Posted by John on April 21, 2006 at 07:01:15:

"non-qualifying, fully assumable, FHA mortgages"
These mortgages are almost non existant, 1978 was the last they were used. Since then mortgages are qualifing assumable and have a due on sale clause.

Re: FHA assumptions - Posted by John Corey

Posted by John Corey on April 21, 2006 at 06:58:40:


You covered a lot of ground.

If you can find a fully assumable mortgage that is one test.

If the deal makes sense is another test.

Why is the credit non-existent? You do not borrow or are you gently claiming that you do not pay your bills on time?

It could be that you do qualify for a loan or that there are other ways besides an assumption to buy.

Assuming a loan (if you can find one that is fully assumable without qualification) is one tool in the toolbox. Use that tool when it makes sense for a particular situation.

If the employment picture is negative will something change in the future to turn this around? If not you might own a property that is worth less in the future than what appears to be a good deal now. If things do turn around it could be a great buying opportunity. Just find a motivated seller and drive a fair but hard bargain. You get them out of a jam and they make you a great deal. If they refuse go to the next person on the same street as plant closures impact a lot of people.

John Corey

Re: FHA assumptions - Posted by Darryl

Posted by Darryl on April 24, 2006 at 13:57:49:

Well…that’s partially correct. Those mortgages were phased out in the late 1970’s, however, the Federal Housing Authority (FHA) still does make fully assumable loans. The new twist is they are fully assumable after 2 years from their origination date. A lot of real estate agents, and shockingly, even some loan officers are not aware of this.