Tag Archives: FHA
Can I still buy a home with as little as 3.5% down?

describe the imageBefore 2008 there were programs that allowed buyers to finance 100% of their purchase. On the surface those programs sounded pretty good, except they carried high rates, adjustable terms, and pre-payment penalties.  But wait, there are still programs where you can get almost 100%, say 96.5%, a program backed up HUD, called FHA loans.  
FHA loans have been helping people become homeowners since 1934. The Federal Housing Administration (FHA) – which is part of HUD – insures your purchase loan. 

Low down payments, 3.5%
Low closing costs, seller can give up to 6% concession. 
Easy credit qualifying
What does FHA have for you?

Buying your first home?

FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.

Want a fixer-upper?

FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Its called an FHA 203K loan.  Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs – all in one loan.

Financial help for seniors

FHA has a program commonly known as a home equity conversion mortgage, or reverse mortgage.  Are you 62 or older? Do you live in your home? Do you own it outright or have a low loan balance? If you can answer “yes” to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash.

Want to make your home more energy efficient?

You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.

How about manufactured housing and mobile homes?

Yes, FHA has financing for some mobile homes and factory-built housing. To qualify the home must be fee simple; in other words, the mobile home or factory built housing must be on land that the property is situated.  

7 Easy Steps to Get a FHA 203K Loan Completed in Delaware

FHA 203k, refinance

You found a house you would really like to buy.  The house is in a great Delaware neighborhood, it’s perfect for your size family, but it needs some work.  You don’t have tons of cash to make the repairs and upgrade the kitchen or other rooms and still make the down payment. You need a mortgage that works for you.  Good news!

There is a way to make your purchase a reality.  Check out our FHA 203K.

Sometimes when you mention FHA 203K loan program many clients and realtors alike have the idea it is a difficult process.  For some lenders, it might, but those who understand, an FHA 203K is the perfect mortgage product to purchase a not so perfect house in Delaware.

So here are the 7 things you need to do to get your FHA 203K Loan:

1.  Contact a qualified FHA 203K Lender and get pre-approved.

2.  Hire a professional realtor to find you a suitable property. 

3.  Get an appointment with a 203K Consultant.  If the project is less than $35K, you may not need a consultant, but our experience has shown they are well worth retaining.  The consultant creates a ‘job specification and bid request’.  The consultant lists out the repairs and items needed to complete the work needed to repair and get the house ready.

4.  Get contractor bids.  Use the job specification and bid request as your basis for estimates.  We suggest using a general contractor who will co-ordinate all facets of the work.  Each contractor must be licensed and approved by lender.

5.  Choose the contractor.  Most often your loan consultant can provide you a list or you can get your own.  Keep in mind the contractor must be licensed and insured.  As the buyer, you are not allowed to do your own work, unless you are a licensed contractor and approved by lender.

6.  Order the appraisal.  We the lender, will order a FHA approved appraiser.  Once value is completed, we can proceed to close the loan in order for the renovations to begin.

7.  Contractor will begin the renovations.  Once the work begins, there will be several inspections called, draw requests, which will be used as the basis for getting the work completed in a timely manner.

We are ready to assist you in adding the best value to your new home. We are lending experts who specialize in the FHA 203 (k) loan process. Together we have an extremely knowledgeable team of experts who know all of the governmental requirements of the 203 (k) process and we will assist you every step of the way to make sure that you will receive all of the monies you need to complete the job correctly and on time.

Let us know if you would like to see if you qualify: CLICK HERE

To learn more about the program, just click on the button below or give us a call at 302-266-9500 or toll free 877-266-9500.

Contact Sam!

FHA released its annual financial status report to Congress



12-171″>FHA plays a very important role in helping more Americans and Delawareans qualify to become home owners

  FHA  maintains the viability of this important financial resource

   FHA home financing is  important  for continued home purchases and sustained growth to the economy

    As stated, FHA is essential in that FHA accounted for 50 percent of home purchase mortgages for African American borrowers and 49 percent for Hispanic/Latino borrowers, along with thousands of other eligible borrowers use FHA financing

In reporting on findings of the independent actuarial study,



12-171″>HUD, “FHA has weathered the storm of the recent economic and housing crisis by taking the most aggressive and sweeping actions in its history to reform risk management, credit policy, lender enforcement, and consumer protections,” said HUD Secretary Shaun Donovan

 “During this critical period in our nation’s economic history, FHA has provided access to homeownership for millions of American families while helping bring the housing market back from the brink of collapse to a point where the outlook is positive and recovery is underway

FHA Acting Commissioner Carol Galante added, “While the loans made during this Administration remain the strongest in the agency’s history, we take the findings of the independent actuary very seriously

  We will continue to take aggressive steps to protect FHA’s financial health while ensuring that FHA continues to perform its historic role of providing access to homeownership for underserved communities and supporting the housing market during tough economic times

Three factors are driving the change in FHA’s position compared to last year: 

First, the house-price appreciation forecasts used for this actuarial review are significantly lower than those used in last year’s report, as the actual turnaround in the housing market occurred later than was projected last year

  These house-price appreciation estimates do not include improvements to home prices that occurred since June and were depressed by a high level of refinance activity

Second, the continued decline in interest rates, while good for the overall economy, costs the FHA revenue as its borrowers pay off their mortgages to refinance into lower rates

Again, this is clearly a positive, but it impacts the actuary’s estimate of the value of the Fund

  In addition, the actuary predicts that borrowers with higher interest rates who are unable to refinance will default at higher than normal rates, increasing losses from foreclosures for FHA


Third, based on recommendations made by the Government Accountability Office (GAO), HUD’s Inspector General and others, FHA directed the actuary to employ a refined methodology this year to more precisely predict the way losses from defaulted loans and reverse mortgages are reflected in the economic value of the MMI Fund



12-171″>HUD/FHA will take several initiatives


The two more important new initiatives that will affect future  borrowers purchasing  homes into 2013 are listed below:

  • Reverse a policy made in a prior Administration to cancel required premium payments after a certain period that effectively meant that while FHA’s 100% insurance guarantee remained in effect for the 30-year life of a loan, borrowers were only required to pay premiums for less than ten years

     FHA has been left without premiums to cover losses on loans held beyond the period for which it collects premiums

      This change will apply to new loans

  • In 2013, enact an increase of 10 basis points or 0

    1 percent to the annual insurance premium paid by borrowers on new FHA loans

    This premium increase is expect to add $13 per month for the average borrower and will strengthen FHA’s capital position without limiting access to credit for qualified borrowers

If you are live in Delaware and are currently considering making a home purchase using FHA financing, you may want to consider moving forward before the end of 2012

  Entering into a sales contract and being assigned an FHA case number prior to years end (2012) may allow new borrowers from being part of the new planned initiatives, however, if allowed, this may still be lender specific


Why Seniors Apply for a Reverse Mortgage?

reverse mortgageThe Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) developed their mortgage programs to help seniors use their home’s equity to stay financially independent during retirement.Today, seniors apply for reverse mortgages for a wide range of reasons. Although keeping seniors in their homes is the top priority of the program, seniors use reverse mortgages to support many different goals.

Three Ways to Use Your Proceeds

  1. Paying for long term care: One of the terms of a reverse mortgage is that at least one individual named on the loan must use the home as his or her primary residence. If one spouse needs to be placed in a long-term care facility, the reverse mortgage can be used to pay the cost of his or her care. To avoid expensive retirement homes and long-term care facilities, many seniors are now taking advantage of in-home care opportunities. Because seniors will use the home as their primary residence, a reverse mortgage is a great way to pay for in-home medical care.
  2. Paying off other expenses: While medical expenses are a reason to consider a reverse mortgage, other bills can also force seniors to tap into their home’s equity. Social Security benefits are not always enough to cover high interest credit card payments on top of monthly house payments, utility bills and other expenses. Many seniors use their reverse mortgage proceeds to repay high interest debts and increase their cash flow.
  3. Paying off existing mortgage: For seniors who still owe an outstanding balance, the most popular reason to apply for a HECM reverse mortgage is simply to repay their existing balance. Once the balance is paid, seniors can use their remaining proceeds to make home repairs and pay the necessary costs of homeownership, including utilities, taxes and homeowner’s insurance. Taking care of these costs can greatly improve seniors’ financial outlook and make their expenses much more manageable.

To discover how a reverse mortgage might benefit you, contact me at Delaware Financial Capital Corp 302-266-9500 for more information or you simply click on the button below to fill out our online form.



How to get pre approved for home loan?

purchasing your new home is to get an idea of how much house you can afford to purchase

We make it easy!  Pre-Approval is an easy process and assesses your income, assets, current debt structure and credit worthiness

Taking the time to get pre-approved is your best bet when shopping to purchase your home

  Getting a pre-approval shows your Realtor or Selling Agent that you are a serious and qualified buyer

  This process also saves you time, by making sure you are looking for homes you can reasonably afford to purchase

  Our friendly family staff is here to make sure your buying experience is pleasant and seamless as possible

  Your next step –


com/preapproval-form/”> on line Pre-Approval Form,  you will hear from one of our mortgage consultants within 24-hours or less to discuss your submission and your next step to home ownership

After our free over the phone consultation, we will move on to the next step by issuing your pre-approval letter

Along with getting pre-approved, there will be a choice of the programs that will meet your needs and qualifications

  Below is a list of the programs we offer for you to choose from:

Our team here at Delaware Financial Capital Corp

will assist you once you get pre-approved to determine which program is best for you

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How to Buy a Fixer Upper with a FHA 203K Loan

FHA’s 203(k) program lets you buy the house you want now and then provides the money you need to make repairs

With 203(k) financing you can buy an older home and fix it up, or you can purchase a short sale or foreclosure in need of repair with the 203(k)

You can also buy a property which is in good shape but would be better with modernization and more energy efficiency

With the typical mortgage you apply for financing, get an appraisal and go to closing

The mortgage is used to pay for the acquisition of the property

However, if you want to make additional improvements you then need cash or an additional loan

The 203(k) allows the borrower to acquire the property and fund improvements after settlement

It can save time and money

There are three steps to obtain a 203(k) loan:

1) Find a loan

The borrower locates an FHA lender who offers 203(k) financing

Many lenders do not provide such financing because the program requires more follow-up than a typical mortgage

Once a property is located the lender will want to know how the funds will be used

At this point the borrower usually obtains help from an “independent consultant,” a 203(k) expert familiar with the program

The cost of the independent consultant can be financed under the 203(k) mortgage

2) Settlement

The money needed to acquire the property is paid out at closing by the lender

With most loans all the money due to the borrower is paid out at closing

However, with 203(k) financing a portion of the loan amount is retained by the lender and set aside for repairs

3) Disburse funds

Money from the loan is disbursed as approved work is undertaken and completed

This means the lender’s involvement with the property continues after closing


So how does the 203(k) program really work? Let’s look at some particulars

Down payment

The FHA currently requires at least 3

5% upfront as a down payment plus closing costs

The 203(k) down payment is calculated on the total loan amount, including the money needed for improvements


You can use the 203(k) program to refinance an existing loan for a qualified property and for approved repairs and replacements

Type of propertyGenerally the property must have one to four units, including one which will be owner occupied

The dwelling must be at least one year old

The 203(k) can be used with condos but not with cooperative units

HUD states, “Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place

You can also use the 203(k) program to finance what is known as a “mixed use” property

This means some of the floor area can be used for commercial purposes

However, 203(k) funding can only be used to refurbish the residential portions of the property and not the commercial areas

Type of improvements

HUD says “luxury items and improvements” are not eligible for 203(k) financing

However, a wide range of repairs and improvements are okay including painting, plumbing, electrical work, flooring, room additions, energy conservation and decks


The 203(k) would seem to be ideal for investors, however under HUD rules the program is only open to owner occupants


Sam Collins with Delaware Financial Captial Corp can answer 203(k) questions and explain in detail how the program works

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Are you Ready to Purchase a Home? – How much can you afford?

describe the imageIf you rent the home you live in or thinking about upgrading to a larger home or moving to another area, then the right planning can help you to purchase a home.

To discover your homebuying potential,  you will want to calculate your:

  • Income
  • Savings
  • Monthly Expenses
  • Current Debt

These factors determine how much of a loan you can afford and how buying a home will affect your monthly budget, once you compute all your expenses.

What is your Income?First you need to determine all of your sources of income. You will need money for your down payment and for your closing costs.  The FHA, VA and other mortgage programs may require smaller down payments.  In some cases the closing costs may sometimes be rolled into the mortgage or you can get seller assistance.Here are a few questions to help you to estimate your financial position.•    What is your average monthly income?
•    Do you expect your income to remain level in the near future?
•    If not, do you expect it to increase or decrease?


Use the following income categories to estimate your monthly income:

Income Category


Borrower’s Salary


Co-Borrower’s Salary


Taxable Interest


Investment Dividends


Other Income


How much will you need for your Down Payment?Do you have Savings, Investments, Stocks or other Liquid?Add up your savings. Any money saved can help you buy a home. Your savings can be used to pay the down payment and/or closing costs. You know your own saving habits, the more you save the better and the more you put down on your house, the lower will be your monthly payment.

•    What portion of your income are you saving now?
•    Can you afford to put more money into savings?

Use the following savings categories to estimate your monthly savings.

Savings Category


Savings Account


Checking Account


Retirement Fund Contributions


Stocks, Mutual Fund Investments


Other Savings


Monthly Expenses – Do you know where your money is going?How much are you spending each month? You can expect your monthly expenses to go up when you buy a home. Will you have enough money to pay the mortgage, insurance and property tax in addition to your other expenses?

Use the worksheet below to calculate the money you currently spend each month.


Expense Category

Monthly (current)



Car Expenses




Medical Expenses








Child Support


How Much Debt do you Have?Review your current debt obligations.  We examine the ratio of your debt to your income when deciding how much money to lend you.  Consider how additional debt from house payments, added to your existing debt, will affect your lifestyle.

Debt Category


Credit Card


Car Loans


School Loans




Child Support


Other Personal Debt


Wow! There is a lot to consider when buying a home.  Rest assured, if you are on this page right now you are on the right path.  Please feel free to let us know if you have any questions.

Still have questions?   Just give us a call at (302) 266-9500 or simply click the button below to contact Sam.