21 FHA, VA, Conventional Loans-Arizona Real Estate License Exam Prep

Arizona Real Estate License Test Prep: FHA, VA & Conventional loans

FHA (FEDERAL HOUSING ADMINISTRATION) INSURED LOANS

Lender is insured from loss by FHA. This insurance protection allows the borrower to obtain a loan with a higher loan-to-value ratio (LTV) and smaller down payment as compared to uninsured conventional loans.

A. An FHA approved lender makes the loan. FHA does not make loans.

B. FHA is regulated by the Department of Housing & Urban Development (HUD).

C. Borrower pays MIP (Mortgage Insurance Premium) Mortgage insurance protects the lender in the event of a foreclosure.

D. Appraisal required (Conditional Commitment)

E. Escape Clause (FHA Amendatory Clause): The appraisal value must be equal to or greater than the purchase price and the buyer must see appraisal or may back out of the contract.

F. Insures loans for one-to-four family units which are owner occupied.

G. No prepayment penalties.

II. VA LOANS (DEPARTMENT OF VETERANS AFFAIRS LOANS)

VA guarantees the lender against loss on loans to veterans.

A. Loan made through an approved VA lender.

B. Certificate of Eligibility:
1. The certificate issued by the VA to veterans stating the veteran is eligible and the amount of guarantee (entitlement)
2. When a VA loan is paid off the veteran’s eligibility is restored

C. No MIP but a VA funding fee is charged.

D. Appraisal Required (Certificate of Reasonable Value - CRV)

E. No down payment required (100% LTV) unless price exceeds appraisal.



F. Guarantees loans on owner occupied 1-4 family units.

G. No prepayment penalties.

III. CONVENTIONAL LOANS
The loan is made solely on the basis of the security and the borrower's ability to repay. No government insurance or guarantee.

A. Compared to FHA or VA loans, uninsured conventional loans require a minimum 20% as a down payment.

B. Insured Conventional Loans: Conventional Loan in which the lender is insured against loss.
1. MI or PMI (Mortgage Insurance) is required on conventional loans above 80% of value and allow lenders to lend up to 97% of appraised value and more.
2. MGIC (Mortgage Guarantee Insurance Corporation) is the oldest of the private mortgage insurance companies.

Видео 21 FHA, VA, Conventional Loans-Arizona Real Estate License Exam Prep канала Hogan School of Real Estate, Inc.