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What is the Percentage of FHA loans that fall thru after a firm commitment has been issued?

I am currently in the process of purchasing a new construction home and am concerned about paying for options upfront (50%) and having the mortgage fall thru.  Am I fairly safe to finalize and pay for options once I receive my firm mortgage commitment?
  • July 06 2009 - Greenbelt
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Answers (3)

The bggest problem with fallout with FHA loans is for New construction and condos.  The FHA has very strict guidelines as to the percentage of homes that must be owner occupied (51%) in a new development and if a condo development, the percentage that are allowed to be insured by the FHA. in relatively low. 10% to 20% depending upon the number built. Aditionally each lender has overlays of their conditions on top of the HUD conditions. The larger the lender the closer they are to exact FHA requirements. However, you may need a specialty smaller lender that will accept your score etc.

I suggest you get on the HUD website and speak to a counselor. 
  • July 07 2009
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Profile picture for Justin Kennedy
BCW136,
good day, new construction with FHA does have property requirments. have you and your broker examined those items needed by FHA. Make sure you have full loan approval - credit, income, assets and FHA new construction property criteria met (termite, inspections (if needed)).
  • July 06 2009
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In my option mortgage commitments are just half of the process. If your loan is locked and your file is underwritten, I would say most lenders will honor that commitment even if their programs change before your home is complete. If your loan is not fully underwritten and your loan is not locked, then anything can happen. You should be looking at a "one time close" type of construction loan. That type of loan will at least guarantee you something.  P.S. if the "options" you are talking about is the extra's for your home...I would be very sure the mortgage is in place....lenders change their programs all the time and if the deal is not locked in you have very little guarantee.
  • July 06 2009
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