News Release from

Enterprise Mortgage Corporation

CONTACT:   Robert Egeland (630-368-9177) - Chuck Silver (630.368.9177)

FHA Mortgages Can Benefit Virtually All Homebuyers

Homebuyers who overlook FHA mortgages may be making a mistake, Robert Egeland says:  FHA-insured loans often have greater borrower benefits than more traditional conventional mortgages.

Egeland should know.  He is president of Oak Brook, IL-based Enterprise Mortgage Corp., Illinois’ largest FHA correspondent.  Among the reasons Egeland likes FHA loans:

• Down payments can be as low as 3%, and home buyers can use outside funds for the down payment.  For example, Egeland says, FHA allows borrowers to use gifted funds – perhaps down payment dollars from a home buyer’s parents or funds from AmeriDream, a qualified down payment gift program – as part of the down payment.
• FHA-insured ARMs (adjustable rate mortgages) have stronger borrower rate protections than many conventional ARMs.  Any rate increases on an FHA-backed ARM are limited to 1% a year, and FHA ARMs have a lifetime 5% rate increase cap.  Rates on non-FHA ARMs generally can rise as much as 2% a year and 6% lifetime.
• Refinancing is easier.  A borrower whose mortgage payments have been on time for the past 12 months typically can refinance his, or her, FHA-insured mortgage without the hassle of new paperwork, credit checks or appraisals.
• The price of the home is not necessarily a factor in determining FHA eligibility.  Loan amounts can be as high as $275,200 on single family homes.

“It’s the size of the loan, not the purchase price of the home” that determines FHA eligibility, Egeland says.  For example, a buyer who purchases a $400,000 home but needs a mortgage of just $250,000 meets the loan amount criteria for an FHA-insured loan.

• There is no income ceiling for FHA-approved borrowers.
• Home buyers who have less than perfect credit often can qualify for an FHA-backed loan, Egeland says.

Many home buyers mistakenly assume that most homes are too expensive to be covered by an FHA loan.  However, Egeland says that home prices in many Chicago suburbs, for example – from Elgin and Streamwood to Round Lake, and from Bolingbrook and Plainfield to the fast-growing Joliet-Shorewood-Romeoville-Lockport sector – meet FHA loan ceilings.

Aside from their better borrower benefits, FHA loans are similar to traditional home mortgages except that they are insured by the Federal Housing Administration.  The loans are written by FHA-approved mortgage brokers, such as Enterprise Mortgage, and other lenders that are FHA approved.  Both fixed- and adjustable rate mortgages are available.

Although Enterprise Mortgage Corp. is a major FHA loan correspondent – #1 in Illinois and 10th nationally – the mortgage broker also provides a full range of conventional mortgage loans.