FHA Program Helps Buyers With Low Credit Scores

“Blueprint For Access” program provides incentives to improve credit score and overall accountability.

Are you “credit shy?” Do you balk when it comes to the idea of speaking to a lender about your…<gulp> credit score? Federal Housing Administration

It’s understandable, especially for those who may have some credit challenges, to be slightly intimidated at the thought of talking to a lender about your credit history, especially when it seems the best loans and rates are reserved for those with “golden” credit. Or ARE they?

The Federal Housing Administration (FHA) recently released a new program designed to help those with lower credit scores obtain mortgage loans while rewarding them for their credit accountability.

The “Blueprint For Access” program was initiated late last year, and has already helped many buyers with less-than-perfect credit obtain home loans at competitive rates. Blueprint For Access helps potential home buyers work through their accountability issues through a counseling program called “Homeowners Armed With Knowledge” (HAWK). HAWK works to educate qualified home buyers about establishing (and keeping) good credit. It also works to establish clear “rules of the road” when it comes to maintaining good credit, and finally, the program rewards borrowers who complete the counseling program with a reduction of 50 basis points off of their up front mortgage insurance premium, and a 10 point reduction in their annual premiums.

Wait…PREMIUMS?

Another facet to this program is the ability to obtain a home mortgage loan with a less than 20% down payment. In fact, the FHA offers loans to qualified buyers with as low as 3% down. However, with lower down payments come higher credit risks, so the FHA does require Private Mortgage Insurance for loans with less than 20% down. The good news is that they have recently reduced the cost of these premiums by about 35%, saving the average homeowner about $900 per year.

Now, think about this: You’re purchasing a property that will increase in value over time with less up front money out of your pocket. So yes, PMI is an added cost, but you may cancel your PMI policy once your home’s value increases over 80% of your loan value, so it shouldn’t be looked at as a permanent payment along with your mortgage.

Back to the Blueprint For Access

This program also allows participants an additional 15 basis point reduction off of their mortgage if they make steady, on time mortgage payments for two years.

So if you’re still “credit shy”, talk to us about this and other loan programs that may allow you to get into the home of your dreams. Contact Team Avalos today for a no obligation consultation.

Team Avalos Real Estate
Keller Williams VIP Properties
25124 Springfield Court, Suite 100
Valencia, CA 91355

Office: (661) 290-3743
Carlos direct: (818) 399-4093
Rose direct: (818) 590-2077

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