by Xavier Thomas/Pierpoint, LLC

Daily we have read the news of mortgage foreclosure, declining property value, bank failure, government financial institution bailout and litigation against lenders for unfair lending practices. The crashing housing market and the availability of credit are some of the concerns of people who want to be in a home. Far too many are staying in rental opportunities longer now than they would have just a few years ago.

We are in the largest house buying time of the year: spring and summer. People move much more often in the summer months mainly because the weather is nice and the children are out of school. If you are considering purchasing a home, you may be consumed with worry about your less than perfect credit. FHA is able to help those with less than stellar credit scores to get into a home. Mortgages are offered that do help consumers working on improving their credit, with proven income and employment.

One of the key elements of the FHA mortgage is mortgage insurance premium. Mortgage insurance premium is the amount paid by the borrower for HUD to provide insurance on the loan. Similar to private mortgage insurance, there is an upfront premium, which can be financed and an annual premium. One to four unit homes purchased with a FHA mortgage have varying mortgage insurance premiums based on the term of the loan , thirty or fifteen years, loan to value ratio and credit scores. One of the features of the FHA mortgage is that upon reducing the borrower's principle balance down to seventy eight percent the borrower can notify the lender, no longer have to pay annual mortgage insurance premiums and receives a reduced monthly mortgage payment as long as the borrower has been paying the premium for the last five years. Additional benefits the borrower may realize is reduced mortgage insurance. Borrower's credit scores and the loan to value ratios directly impact the cost of mortgage insurance premium.

The need to include your non-profit home counseling service has never been greater. Helpful tools and services that home counseling services, lenders and select service providers have to assist you with correcting your credit report and improving your credit score coupled with grants and forgivable loans make this an opportunity for the individuals who have planned to build wealth through home ownership.

FHA has a variety of mortgage products. One particular product that has been underutilized and represents an extreme opportunity for wealth building is the FHA mortgage called the 203k. This product allows the borrower to purchase a home and obtain the moneys to pay a license contractor to make repair and retrofit on a given property. The benefit of this mortgage can be realized with the purchase of a foreclosed home that is selling below market value and is in need repair. A realtor can locate property that fills the needs of the property, a license contractor can provide estimates as to what repairs need to be done and the cost. The sale price, repair cost and appraised value become part of the underwriting process along with employment history and credit history. House values are right-sizing, the price of homes have been driven down, interest rates are low and this is an opportunity to purchase your dream home with a safe mortgage.

The good news for current homeowners there is a product to serve you as well. It is called the FHA Secure program. If you are one of the many struggling homeowners with a sub-prime mortgage allow me to encourage you to reach out to the FHA representatives who have it in their ability to help many in struggling positions. The program was designed to help those who are were delinquent in their sub-prime mortgages and were struggling with the adjustment and/or reset of those loans. In the event you have a sub-prime mortgage or any type of mortgage, and you are wondering if you could benefit from the variety of the mortgages FHA has to offer contact an FHA representative right away. (This column is sponsored in part by Residential Home Loans Centers, info@rhlcusa.com.)