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What is an FHA Loan? FHA loans in MN, WI, SD
| FHA after a Short Sale | FHA after a foreclosure | 203(k) Fix Up Loan | Streamline Refinance  | FHA LOAN LIMIT Lookup Tool |

Homebuyers in the Minneapolis, St Paul, Madison, Milwaukee, Pierre, and throughout all of Minnesota, Wisconsin, and South Dakota have heard the name before, but did you know that FHA financing is one of the most popular ways to We provide FHA loans. We are FHA Experts - Click to APPLY at www.JoeMetzler.combecome a homeowner or refinance an existing mortgage?

FHA (HUD) doesn't provide loans directly, rather FHA provides insurance on the loan for lenders. This help low and moderate income families to become homeowners by encouraging mortgage companies to make loans to borrowers who might not be able to meet the stricter conventional mortgage underwriting requirements. By protecting the mortgage company against large loan defaults, more people can buy a home.

We are a top FHA home loan lender in Minnesota, South Dakota, and Wisconsin.

FHA LOAN Details

FHA versus Conventional Loans - Differences in Loan Guidelines

Although there are similarities between all mortgage loans in general, there are also some big differences. While FHA mortgage rates are similar to other mortgage loans, credit guidelines are less restrictive. For example, FHA allows for borrowers with less just OK credit to receive the same interest rate as a borrower with great credit.  On a conventional loan, for ever 20 point lower score, starting at 740, the interest rate start to rise on conventional loans. FHA is also more forgiving on past major credit issues. FHA allows someone with a bankruptcy to potentially get a new loan in as little as two-years after the bankruptcy.  For those with a previous foreclosure, FHA loans are possible just three-years after the Sheriff sale date.

FHA Mortgage Insurance

FHA was created by the Federal Government to provide affordable housing financing for qualified borrowers. FHA doesn't actually lend, they just insure part of the loan, reducing the lender's risk. To cover the cost of the program, the new home owner pays into the program with Mortgage Insurance.

There are two aspects to FHA mortgage insurance. The first is an upfront insurance premium, called MIP, which can be paid in cash at closing, or added to the loan amount. Almost everyone elects to roll it into the new loan amount, so it is not an out-of-pocket expense. The borrower also pays monthly mortgage insurance. These funds go into a default pool, while covers any foreclosures, and all FHA borrowers have to pay into this fund.

FHA mortgage insurance has changed over the year, the most current change took effect January 27, 2017. FHA mortgage insurance is required on all FHA loans, regardless of down payment size.

FHA Up front mortgage insurance premium (UFMIP)

FHA monthly mortgage insurance costs: (current as of 4/1/2017

FHA monthly mortgage insurance varies depending on the loan type, and loan-to-value.

FHA loan mortgage insurance chart 2017

How To Calculate FHA Mortgage Insurance:

Take loan amount times mortgage insurance factor, then divide by 12 to get amount monthly. For example, a $100,000 loan, with a .60% factor ($100,000 x .0060 = $600/yr, Divided the yearly amount by 12 = $50 a month in mortgage insurance added to your home payment.

How Long Does FHA Mortgage Insurance Stay On My Loan?

It depends on the down payment size, or refinance equity position:

 Conventional loans are able to eliminate mortgage insurance when you reach 80% loan-to-value (20% equity), thus making conventional loans better if you can meet the stricter conventional loan guidelines.

FHA loan down payment is just 3.50%

In contrast to conventional mortgage products, which frequently require minimum down payments of 5%, 10%, or even 20% of the purchase price of the home, single-family mortgages insured by FHA make it possible to have a small down payment. Currently FHA REQUIRES only a 3.5% down payment. This money can be your own money, a gift from a blood relative, or a gift or grant from a true community, state, or city program.

Typical FHA purchase Loan

The most common for an Purchase FHA loan with minimum down payment of 3.50% in MN, WI, or SD will be:

  1. 1.75% up-front MIP added to the loan amount

  2. .60 monthly PMI

  3. Mortgage insurance would be for life-of-loan

ALL MORTGAGE LOANS, including FHA, have Closing Costs

There are costs to get a mortgage loan. Typically borrower must pay, at the time of purchase, the costs and charges associated with buying a home. Commonly these costs are referred to as closing costs, which need to be paid in order to get the loan. Some of these items are appraisal, credit report, origination fees, title company fees, state taxes, county recording fees, etc. You also have to pay for your first years homeowners insurance, and pre-rated property taxes up-front when buying a home.

FHA closing costs can be financed, up to 6% of the purchase price.

Your closing costs can be paid five ways:
1) Cash
2) Rolled into the loan - commonly called Seller Paid Closing costs
3) Rolled into a slightly higher interest rate
4) Use a down payment and closing cost assistance program
5) Any combination off all of these items

The most common way is by having the closing costs financed into the loan amount by having the seller pay them, thus reducing the money needed up-front to buy a home. Seller paid closing costs really is simply a fancy term by which means you roll your closing costs into the loan. The seller really isn't paying anything for you. but instead you pay the closing costs over the life of the loan, versus having to come up with the money today out of pocket.

With most conventional loans, the maximum seller paid closing cost allowed is just 3%.

Get Started on your FHA Loan in MN, WI, SD

  • Apply for financing

  • Get Pre-Approved

  • Start looking at houses with Realtor

  • Make Offer

  • Go through Underwriting

  • Get your keys!


Apply for your FHA loan in MN, WI, or SD

Some FHA Loan fees are limited.

Maximum FHA Loan Amounts Vary By County and State. Find out your limit with our FREE

LOAN LIMIT Lookup Tool

FHA and Conforming Loan Limit Lookup Tool

FHA rules impose limits on some of the fees that mortgage companies may charge in making a loan. For example, the loan origination fee charged by the mortgage company for the administrative cost of processing the loan may not exceed one percent of the amount of the mortgage.

FHA Loan Limits. Limits on the maximum loan amount in your area.

To make sure that its programs serve low and moderate-income people, FHA sets limits on the dollar value of the mortgage loan. It is always changing, and does vary depending on which county and state where the property is located. Use our FREE Loan Limit Lookup Tool to find out the limits in your area.

Fannie Mae and Freddie Mac loans are conventional loans made at the risk of the lender without benefit of any government guarantee or government insurance. A conventional loan with an LTV (loan to value ratio) of greater than 80% requires primary mortgage insurance, which can be paid monthly. The borrower must (usually) have 5% of his/her own funds for the down payment.

Requirements of a conventional loan applicant include excellent credit, job stability with sufficient income, a sizable down payment, and low debt to income ratios. Borrowers who meet Fannie Mae or Freddie Mac conventional guidelines are rewarded with good interest rates, and low or no monthly mortgage insurance.

Non-conforming Bad Credit, Sub-prime, Alt-A Loans Gone
Lenders, and the crazy lender days from 2000 - 2006 are long gone. Bad credit, sub-prime, stated income, no doc, Alt-A, and everything else crazy is no longer available. FHA is your best option if you are a weak credit risk, but it is NOT a bad credit loan. You have to qualify, it has to make sense, and you have to have a little skin in the game (down payment).


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The FHA Streamline Refinance
If you currently have an FHA mortgage, you are eligible for one of the simplest money saving refinances available today. The FHA Streamline Refinance allows existing homeowners with an FHA loan to refinance and reduce their interest rate without having to jump through as many hoops as normal. The best one is no appraisal required, and closing costs are rolled into the new loan, so most people can get one no, or next to no out of pocket costs. How cool is that?

 Apply online right now to explore your FHA Streamline Refinance options

FHA has permitted streamline refinances on insured mortgages since the early 1980's. The streamline refers only to the amount of documentation and underwriting that needs to be performed by the mortgage company, and does not mean that there are no costs involved in the transaction.

The basic requirements of a streamline refinance are:

  • Borrower's original loan must already be an FHA insured loan.

  • The refinance must lower the principal and interest payments of the previous mortgage payment by 5% or more.

  • No cash may be taken out on mortgages refinanced using the streamline refinance loan (you can with a regular FHA refinance)

  • The mortgage to be refinanced can not be delinquent. The mortgage must have been paid as agreed for the last twelve (12) months and must be up to date at the time of refinancing.

  • Borrower must have had the FHA mortgage for at least 6 months.

  • Borrower cannot receive any cash back (but you can with a regular FHA refinance)

  • In theory, No income or employment verification - No pay stubs or W-2 forms required for the program, but some states (like MN require documentation).

  • An Appraisal IS required if rolling the closing costs into the loan amount, but NOT if rolling the closing costs into the interest rate.

  • Streamlines without an appraisal are limited to the unpaid principal balance, minus any refund credit of the mortgage insurance premium, plus the new upfront MIP if it is to be financed in the mortgage.

  • Any other liens (2nd mortgages, home equity loans) must be subordinated to the FHA loan.

  • Borrower must be up-to-date on any federal debts.

We offer streamline refinances in numerous ways. You can select a no closing cost refinance, (which should really be called a no out-of-pocket cost refinance) by selecting a slightly higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this slightly higher interest rate, the lender pays any closing costs that are incurred on the transaction. This is how 95% of FHA streamline refinances are done.

Mortgage companies can also offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed what is currently owed, i.e., closing costs may not be added to the new mortgage with those costs either paid in cash or through the premium rate as described above. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal and, thus, closing costs may not be included in the new mortgage amount.

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The FHA 203(k) Full Renovation Loan, and the FHA 203(k) Streamline Renovation Loan

An important tool for community and neighborhood revitalization is good housing. The FHA 203(k) loan offers flexible qualifying and low down payments to buy a home and fix it all in one loan. The 203(k) loan program offers borrowers the resources to rehabilitate a home that may be in need of repair, either the home that they currently live in, or that special fixer-upper opportunity. One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home.

  • FHA standard guidelines

  • Standard FHA down payment

  • Flexible credit qualifying

  • Assumable loans

  • Finance up to 6 months of mortgage payments

  • Purchase or Refinance and Improve all in one loan

Made available to certain lenders by the U.S. Department of Housing and Urban Development (HUD), the FHA 203(k) program has already provided many buyers with the funds necessary to buy their first home, or greatly improve a current home. The FHA 203(k) loan is available to borrowers of all income levels, to homeowners who plan to occupy the house, and for homes with one to four units.

There are two types of FHA 203(k) loans to understand:
These two options are known as a Full 203k loan, and a 203k Streamline loan. A full 203k loan is for repairs OVER $35,000.  Few lenders offer this program due to it's risk and complexity. Streamline 203k loans on the other hand are for repairs UNDER $35,000, and is offered by many FHA lenders, including Mortgages Unlimited..

THE 203K STREAMLINE LOAN - This works for the vast majority of home repairs. These loans offer the ability to finance upfront up to $35K in upgrades to rehabilitate a home. These are offered up to the maximum FHA loan limit in your county.

There is no doubt that the current real estate market offers a lot of great bargains on bank owned, Foreclosed, REO, Repo'd, etc homes. However,  many of these homes are in poor condition. Missing appliances, ruined carpet & flooring, holes in the wall, etc.  Most lenders don't offer loan programs that will be able to help folks buy homes in this condition.

This is where a little known program called the FHA 203K Rehab loan comes in. The FHA 203K Rehab loan is becoming very necessary for the purchase of many Bank Owned, REO, or Repo properties. Mortgages Unlimited offers FHA 203K streamlines loans to make the process of buying a home that needs a little TLC (or quite a bit in some cases!) easier, more affordable, and quicker. Many of us have seen firsthand, or have heard stories about foreclosed home that have been torn up, stripped, vandalized, etc. With conventional financing, these homes are very difficult to sell or buy, as they are not in move in condition, and most lenders will not lend on a damaged home.

Our FHA 203K Streamline program allows the homebuyer to put up to $35K of rehab work into the new loan. The loan closes 1 time. It is a permanent form of financing. The Streamline program should not be confused with the more complicated FHA 203K rehab loan, which can accommodate major remodels, major damage repair, storm damage, etc. The FHA 203K Streamline rehab loan is just that - Streamlined.

This loan can help with new paint (in/out), new siding, new roof, new flooring, new appliances, HVAC repair/replacement, electrical & plumbing repair & upgrades, new windows, decks, porches, patios, minor kitchen remodels, & more.

These loans are a key to helping homes become more accessible for disabled folks as the modifications can often be completed with a FHA 203K loan.

What it can't cover is landscaping, structural damage, foundation work, room additions, load bearing wall changes, etc.

There is no HUD consultant or general contractor required on the 203k streamline. However, we do suggest using a general contractor with a strong track record to ensure that your work is done & done right.

Please give us a call to find out if this loan is right for your next purchase,  your listing, or right for your next buyer that is looking at Bank-owned, REO, or Repo properties that are in need of TLC & repairs.

203K Eligible Borrowers:

  • Owner Occupants - Purchase - Refinance

  • Non- Profits

  • Investors NOT allowed

Terms for 203K Loans:

  • 30 or 15 year fixed rates

  • One year ARMS

  • Assumable to a qualified buyer

Eligible Properties:

  • Single family dwellings

    Download the

    The 203k Guidebook

  • Condominium

  • Townhouse

  • Mixed Use (Storefront)

  • 1-4 Unit buildings- you can increase or decrease the number of units with this loan.

Structural Alteration and Reconstruction:

  • Changes for improved functions and modernization

  • Elimination of health/safety hazards

  • Changes for aesthetic appeal

  • Plumbing, heating air conditioning, and electrical upgrades

  • Well and/or septic repairs

  • Roofing, gutters and downspouts

  • Flooring, tiling and carpeting

  • Energy conservation improvements

  • Major landscape work and site improvement

  • Access for the disabled

The appraiser will be given a copy of your "work-write up" to estimate an after improved value for your new or current home. We loan against that improved value thus allowing you to finance the cost of repairs.

Other Eligible Costs:

Home Inspection on FULL 203(k):
For expensive 203(k) loans (OVER $35,000), you will need to work with a 203(k) consultant. The cost of your construction is estimated by an FHA Approved 203(k) consultant (estimator). The cost consultant assists you in determining the scope of repairs and the costs budgeted for the renovation job.

FHA 203(k) loans are more complicated, yet there is nothing to fear. Here are a few suggestions to get you started:

  • First get pre-approved for an FHA loan

  • Start looking at homes.

  • If you find one in need of repair, obtain bids for the required repair work

  • Ask your Realtor "Will the house appraise for the purchase price plus repair cost when repairs are completed?"

If No: Pass on the house and find something else

If Yes:

  • Submit your purchase offer

  • Once your offer is accepted, contact us to guide you the rest of the way.


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Can you buy a home AFTER a short sale? Yes and No

Apply for your FHA loan in MN, WI, or SDWe get asked this question just about everyday, so here are the FHA rules.

A borrower is not eligible for a new FHA-insured mortgage if he/she pursued a short sale agreement on his/her principal residence simply to take advantage of declining market conditions (your home lost value and you didn't like that), and/or to just move and purchase a similar or superior property within a reasonable commuting distance.

You ARE eligible if you had a job change, AND the new job was beyond a reasonable driving distance, forcing the sale (short sale) of the existing home.

Borrowers Current at the time of Short Sale Rule

A borrower is considered eligible for a new FHA-insured mortgage if, from the date of loan application for the new mortgage, all mortgage payments due on the prior mortgage were made within the month due for the 12 month period preceding the short sale, and all installment debt payments for the same time period were also made within the month due.

Borrowers in Default at the time of Short Sale

A borrower in default on his/her mortgage at the time of the short sale (or pre-foreclosure sale) is not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale.

Note: A borrower who sold his/her property under FHA’s pre-foreclosure sale program is not eligible for a new FHA-insured mortgage from the date that FHA paid the claim associated with the pre-foreclosure sale.

Exceptions: Lenders may make exceptions to this rule for borrowers in default on their mortgage at the time of the short sale if the default was due to circumstances beyond the borrower’s control, such as death of primary wage earner or long term uninsured illness, and review of the credit report indicates satisfactory credit prior to the circumstances beyond the borrower’s control that caused the default. Exceptions are virtually impossible to get, regardless if you think you have a good extenuating circumstance, so expect to wait the normal waiting periods.

• For detailed information on converting existing principal residences into rental properties, see HUD 4155.1 4.E.4.g.
• For information on short payoffs, see HUD 4155.1 3.B.1.f.


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Apply for your FHA loan in MN, WI, or SDCan you buy a home AFTER a foreclosure? Yes and No

We get asked this question just about everyday, so here are the FHA rules.

FHA allows a person to potentially get a new FHA when a minimum of three years has passed since the Sheriff sale date.

If the previous foreclosure was on an FHA loan, you must wait a minimum of three years past the date FHA paid out the loss to your old mortgage company.  This can be from a few months, to up to a year after the foreclosure. The only way to know the exact date is to contact us, and we can look it up for you.

You must meet all other normal FHA underwriting guidelines, and have good re-established credit.


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NOTICE: We are a VA, FHA, and USDA Approved Lending Institution.

While we are an approved lender, we are not part of HUD, FHA, USDA, The United States Government, or the Department of Veteran Affairs.

We are not acting on behalf of, or under the direction of HUD/FHA or the Federal Government. FHA and VA do not lend directly to the public, only through approved lending institutions like Mortgages Unlimited.

  Equal Housing Lender

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33 Wentworth Ave E - Suite 290
St Paul, MN 55118

(651) 552-3681  

Top Minneapolis Mortgage Lender 2012 Member in Good Standings, Minnesota Mortgage Association

Our services available only for Our services available only for properties located in Minnesota, Wisconsin, and South Dakota. Licensed as Mortgages Unlimited, Inc. NMLS # 225504. As a Lenders One partner, we are part of the 3rd Largest Retail Mortgage Originators in the country. We are consistently ranked as one of the top mortgage lenders in Minnesota by Minneapolis St Paul Business Journal. Any use or duplication of any materials is strictly prohibited.  All images, text, and materials Copyright 1998 - 2019 Joe Metzler. This is the private web site of Joe Metzler, NMLS #274132. All Rights Reserved.