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FHA mortgages have advantages

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POSTED: June 8, 2011 12:46 p.m.

FHA mortgages are all the same, right? Actually, obtaining one of these loans in the local area offers one huge advantage. This of course, is only if you currently live or plan to live in the designated Military Impacted Areas (MIA) of Bryan or Liberty counties.
So, what makes these zones so special? The U.S. Department of Housing and Urban Development (HUD) defines these areas as a military-connected household comprising 25 percent or more of the total households of the pre-defined area. In total, the United States only has six designated counties, and Georgia is home to three of these. The Savannah area is home to two of the three, with Camden, located further south, being the third.
Fort Stewart and Hunter Army Airfield are the reasons why this area has been deemed as such. Fort Stewart is home to the Army’s 3rd Infantry Division, which is the largest east of the Mississippi River.  
This pertains to FHA mortgages because any citizen residing within the borders of these two counties can take advantage of the discount. This could equate to big savings in terms of up-front costs associated with a mortgage.
For example, let’s say a non-military family is interested in purchasing a new home in Richmond Hill for $250,000. Under normal circumstances, FHA financing would require a 1-percent, or $2,500, up-front fee to obtain the loan. But due to the city being located within the designated MIA area, the fee is waived.
This discount easily could be the determining factor for someone who is on the fence about where to purchase in the greater Savannah area. 
Let’s say that you are a Savannian who lives inside the city limits – good news for you as well. A refund may be available to you from HUD. If you currently have FHA financing and choose to refinance within seven years of your original close date, chances are you may meet the eligibility requirements for a refundable mortgage insurance premium. All you have to do is enter your FHA case number into the designated area of its website, and it will tell you if you meet the eligibility requirement and how much you could be entitled to.
According to the rules set forth by HUD, Savannah’s host county of Chatham also would be included in the discount, but it falls just short of the population-density requirement. Nevertheless, savings could be available on most mortgages from FHA if you know where to look.
These MIA discounts are scarce and offer a substantial discount from the government without a lot of hoops to jump through, which, in itself, is a small miracle. Because the mortgage payment most likely is going to be the most expensive payment that a family incurs, it is nice to know programs like this are available. 

Barr is a mortgage broker with First Carolina Mortgage of Richmond Hill. Visit fcmloan.com or email barrwes@gmail.com.

 

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