More Community Banks Offer FHA Home Financing Options

FHA Flexibility Benefits Community Bank Customers

June is National Homeownership Month and the nearly 5,000 members of the Independent Community Bankers of America (ICBA) are calling attention to the range of mortgage products community banks offer, including the Federal Housing Administration’s programs as one practical option for borrowers seeking to finance their house purchase or refinance an existing mortgage.

“ICBA is seeing more and more community banks offering FHA mortgages as part of their mortgage product portfolio,” said Cynthia L. Blankenship, ICBA chairman and vice chairman and chief operating officer of Bank of the West, Irving, Texas. “Less flexibility in the current non-governmental mortgage sector combined with new loan standards and modernized processing options are making FHA more attractive to community bank mortgage lenders and their borrowers alike.”

ICBA Mortgage, ICBA’s mortgage subsidiary which offers mortgage solutions to over 1,000 community banks, reports a 25 percent jump in all mortgages coming through its pipeline during the first five months of this year compared with the same period in 2007. In addition, ICBA Mortgage reports that in early June alone, FHA-insured mortgage loans made up 22 percent of its volume compared with just nine percent in June 2007. “The increase in FHA loans made through community bank lenders is one indication that in the current market FHA offers benefits for community bank customers,” said Blankenship.

Borrowers may have greater flexibility when using FHA financing and there are significant benefits associated with obtaining an FHA mortgage. Among these are:

§ Current and temporary FHA loan limits range from $271,050 to $729,750

§ Lower down payment requirements.

§ More flexible total debt and housing debt to income ratios.

§ No reserve requirements for single unit properties.

§ Lower monthly mortgage insurance premiums compared with the conventional conforming market.

§ Acceptance of limited or non-traditional credit history.

§ No minimum or credit score needed.

§ Third parties can pay for closing costs, prepaids and escrow.

§ Down payment assistance and secondary financing allowed.

§ Non-occupant, co-borrowers permitted.

“For FHA financing, check with your local common sense community bank lender. We’ll work with you to find the mortgage that is right for you,” said Blankenship.

Find out more information about National Homeownership Month at www.icba.org.

About ICBA

The Independent Community Bankers of America, the nation’s voice for community banks, represents nearly 5,000 community banks of all sizes and charter types throughout the United States and is dedicated exclusively to representing the interests of the community banking industry and the communities and customers we serve. For more information, visit www.icba.org