FHA Loans in California – Reduce your Mortgage Insurance


fha loans California
If you have an FHA Home Loan and you haven’t refinanced, take a look at the top 5 questions regarding the new LOWER Mortgage Insurance Premium (MIP) for loans after January 26th 2015.

So how much can I save?

You have questions? We have answers….

1. What will the impact of FHA’s new premiums be on my monthly mortgage costs?  Borrowers who qualify for FHA’s new reduced annual premiums will enjoy the benefits of a more affordable FHA loan and lower costs. HUD estimates these lower premiums will save California FHA Home Owners, on average, $1500 annually! They also expect this new change will spur 25,000 new California homebuyers to purchase their first home over the next three years.

2. When will the FHA’s new annual premium rates in CA take effect? The reduction is effective as of January 26, 2015. Borrowers with case numbers assigned on and after January 26, 2015 will be eligible for reduced annual mortgage insurance premiums.

3. What steps do I need to take to take advantage of these new lower premiums? Contact an FHA-approved lender in California, for information regarding FHA’s new annual mortgage insurance premiums for FHA Loans in California.

4. I’ve had a FHA mortgage for years. Can I take advantage of these new lower premiums? The change does not affect loans that have already closed. You may wish to contact an FHA approved lender like Jackie with Right Choice Mortgage, to determine if refinancing your existing loan makes sense for you.

5. I intend to apply for an FHA-insured mortgage with a 15-year term. Are FHA’s new reduced annual premium rates available for me? No. FHA’s new premiums only apply for mortgages with loan terms of greater than 15 years. Annual premiums for FHA-insured mortgages with terms of 15 years or less stay unchanged.

If you need more information regarding the new FHA reduced MIP and how it can save you on your California FHA Home Loan, Call Jackie 949.600.0944 www.mylenderjackie.com

Jackie Barikhan

Jackie and her Team at Right Choice Mortgage has been closing FHA loans since 1996 and we have the answers to all your FHA Home Loan Questions.

More FAQS about FHA Home Loans in California

FHA Loans California

FHA’s mission is to encourage home ownership. By providing loans with very low down payments and flexible credit requirements they put home ownership in reach for many who may not have qualified otherwise.

FACT: Nearly 30% of Home loans in 2010 were FHA Loans.

In 2009, FHA programs insured nearly 2 million loans, which included 750,000 first-time home buyers.

The Federal Housing Administration (FHA) was created from the National Housing Act of 1934, and was established to increase home construction, reduce unemployment and insure government loan programs.

FHA loans were created to allow lower income Americans to borrow money for the purchase of a home that generally they would not otherwise be able to afford. The program originated during the Great Depression of the 1930s, when the rates of foreclosures and defaults rose sharply.

Some FHA programs were subsidized by the government, but the goal was to make it self-supporting, based on insurance premiums paid by borrowers.

While most people believe that the FHA lends money directly to borrowers , they actually just insure a certain type of loan that is financed by traditional banks and mortgage lenders, such as Right Choice Mortgage.

Four of the most visible single family housing programs that FHA offers are, Section 203(b), Section 234(c), Section 203(k) and Home Equity Conversion Mortgages (HECM) – Reverse Mortgages.


FHA Loan California Highlights:

Section 203(b)

  • largest of FHA’s single family programs
  • 1-4 unit properties are eligible
  • flexible credit requirements
  • 3.5% down payment allowed
  • down payment may be a gift from specific sources

Section 234(c)

  • provides mortgage insurance for individual condominium units
  • credit, down payment and limits of 203(b) apply
  • in 2010, condominium complexes must be approved through HRAP/DELRAP to be eligible for FHA insurance

Section 203(k)

  • primary program for property rehabilitation
  • encourages community and neighborhood revitalization
  • only 1 mortgage loan is used for both the acquisition and the renovation
  • 1-4 unit properties including condominiums are eligible; check with your lender for manufactured housing eligibility
  • required improvements include cost effective energy conservation standards and smoke detectors
  • consultancy may be required

HECM – Reverse Mortgages

  • FHA was the first to promote reverse mortgages nationally
  • allows access to equity in property with flexible terms
  • lump sum, monthly payments, line of credit or a combination available
  • limited to homeowners 62 years of age and older

FHA programs also offer a Streamline Refinance.

FHA loans have favorable loan terms, generally lower rates than conventional loans, 30 year fixed repayment terms and flexible down payment options.  FHA continues to encourage home ownership, provide liquidity and stability to the mortgage market.

Right Choice Mortgage has numerous FHA loan program with FICO score requirements as low as 550.  

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