North Carolina FHA Loans

FHA loans in urban areas

The State Housing Credit Program made it possible to reduce interest rates in urban areas. Turnaround time is even a breeze. For applications made before every 15th day of the month, turnaround time is within 24 hours. After the 15th day of each month, turnaround time is within 48 hours.

The state's Trust Fund, a reliable and flexible source of revenue, helps finance FHA loans in the urban areas.

More benefits for low-income individuals and families

Perhaps no other state ensures the availability of FHA loans for lower-income residents, with incomes less than half of the Median Household Income set at an estimate of $40,965, than North Carolina. It is actually possible for rural residents to obtain a loan with 0% interest (for first-time mortgagors) and the lowest possible interest rate (for mortgagors with prior experience with North Carolina FHA loans) of 1% of the entire loan package. It is also possible to exceed the maximum repayment period of 30 years. Above all, there is a guarantee of obtaining newly constructed homes.

Perhaps no other state ensures the availability of FHA loans for lower-income residents, with incomes less than half of the Median Household Income set at an estimate of $40,965, than North Carolina. It is actually possible for rural residents to obtain a loan with 0% interest (for first-time mortgagors) and the lowest possible interest rate (for mortgagors with prior experience with North Carolina FHA loans) of 1% of the entire loan package. It is also possible to exceed the maximum repayment period of 30 years. Above all, there is a guarantee of obtaining newly constructed homes. Aspirants in rural areas need only to apply for the Rural Opportunity Mortgage (ROM) program of the North Carolina Housing Finance Agency to obtain this benefit. The ROM has been able to raise rural mortgages by over 27%. Since this is an additional feature of the state's FHA loan programs, certain qualifications must be met by the home buyer to avail of the program. The individual or the family's gross income must be 50-80% less than the specified median household income of the specific area. Whether applicant is a U.S. citizen or non-citizen does not count as long as the home buyer can prove that he or she is a legal resident of the area. Another consideration that the home buyer must take note of as well is the sales price of the house of his choice. His or her chosen home's value must be at or fall below $160,000.

Benefits for first-time home buyers

The North Carolina network of lenders offers a variance of assistance and financial guidance to first-time home buyers. Customers are given lower than the market's value worth of loans, a down payment assistance that can help them save as much as $20,000, and best of all, a job loss protection feature in case of emergency within the first two years of the mortgage period. With the job loss protection feature, the agency directly gives financial grants to the loan servicer to pay for the client's principal balance for the first four months of the loan period. The home buyer is not obliged to repay the amount until the loan has been paid in full or in the event of a mortgage foreclosure.

Lessened taxes even lower sales prices and rates

Homeowners in North Carolina all have the opportunity to claim tax deductions in their FHA mortgages. It is wise to consult real estate experts or counselors to know more about this feature. In North Carolina, there is such a thing called the MCC or the Mortgage Credit Certificate which targets home buyers who did not qualify for First Home Mortgage Bonds. The MCC allows home buyers to save as much as $2,000 due to reduction in federal income taxes. It also helps home buyers to raise their purchasing power.

Other options

There are other options that the home buyer in North Carolina may employ to get the most out of his or her FHA loan package/s. With adequate knowledge or assistance from reliable counselors, lawyers, or brokers, it is possible to "buy down" loan rates. The 2-1 buy down option can reduce initial FHA rates by 2% in the first year of the mortgage period and 1% in the second year. Another option is the permanent buy-down where the mortgagor must pay discount points in the initial payment period. Of course, the best way to obtain the lowest rates is to maintain good credit scores by paying one's monthly outlays on time and in full.