FHA Loans Hottest in the Inland Empire

FHA loans, which are home loans insured by the Federal Housing Authority, now account for approximately 30% of all home loans in the United States. FHA loans in California can be hard to come by in some cities because of high property values – but according to one local mortgage expert, the Inland Empire is not one of those areas.

“San Bernardino and Riverside counties are both very FHA-friendly areas,” said Ed Hoffman, president of Wholesale Capital Corporation in Moreno Valley. “That’s because we have lower median home prices compared to the rest of Southern California.” He points to the median home value in San Bernardino County, which Zillow currently lists as $285,600, and Riverside County, where the median home value is $324,300.

“Homes in those price ranges are perfect for FHA loans,” Hoffman said, “Because the FHA loan limit is $356,500 in both Inland Empire counties.”

An FHA home loan requires the borrower to make a 3.5% down payment (as opposed to conventional loans, where down payment requirements range from 5% to 20%). Although an FHA loan is often touted as a “first time homebuyer” loan, that is a misconception; FHA borrowers are no longer required to be first time home buyers.

Although mortgage lenders vary their minimum credit score requirements for FHA loans, Wholesale Capital Corporation has more flexible credit terms for its FHA borrowers. “We require a minimum credit score of 580 for an FHA loan, and in fact can go as low as 540 if the borrower is able to make a higher down payment of 10%” Hoffman said. “Those are the lowest credit score requirements you’ll find in all of Southern California.” He also lists debt-to-income ratio and documented income as factors used to qualify FHA applicants.

“As the lender, we need to see proof that the borrower can repay the loan,” Hoffman said. “We need to see proof of steady employment for the previous two years, for example. Borrowers also need to demonstrate that their wages have remained the same or increased over that period of time. If we see a decrease in income, it becomes a problem.”

Core Logic reported that there were 2,642 sales in San Bernardino County in May 2016, which was a year-over-year increase of 6%. There were 3,825 sales in Riverside County in the same time period, which was a year-over-year increase of 2.4%.

“The opportunities are there for people who qualify for FHA loans in California,” Hoffman said, “especially in the Inland Empire.”

He encourages people who are interested in applying to call Wholesale Capital Corporation at (844) 571- 2777. “Tell us you read about our FHA loan opportunities,” Hoffman said, “and that you’re interested in applying. We’ll put you on the phone with one of our loan officers who specializes in FHA.”