FHA loans for new homes

[BPRICE1234]

I heard a rumor that you can't use a FHA loan to purchase a new home? Can anyone confirm this?

[Oldragbagger]

I heard a rumor that you can't use a FHA loan to purchase a new home? Can anyone confirm this?

When we moved here we inquired about using our VA loan benefits. We were told we could use any type loan we wanted but we still had to put 10% down and meet the requirement to close in 30 days. Since VA loans come with substantial funding fees and we had to make a down payment anyway we went conventional. That applies to a new home. You can use any kind of loan you want on a resale.

[retiredguy123]

The 30-day closing requirement can be a problem with certain types of loans.

[AZ SLIM]

We were told by our own bank (Not Citizens First) that the VA loan would take more than 30 days to complete, and The Villages requires a 30 day closing on new houses. We could get a 30 day closing from our own bank, but not on a VA loan. This was 2 1/2 yrs ago.

[asianthree]

I heard a rumor that you can't use a FHA loan to purchase a new home? Can anyone confirm this?

Four homes we have used Citizens First (developer) twice. Closed with zero issues on time in the 30 days. One FBIC broker closed 30 days with no issues.(broker worked for Citizens First for years).

Our first home we used our BOA bank. BOA was on top of everything but, more pressure than the other 3 closing. Day before closing the villages had an upgrade to their system. We were closing by mail, sitting at our BOA branch waiting for documents. It didn’t process from TV to BOA. We sat at BOA from 2 pm until 8pm waiting for final documents. TV finally said it showed sent, but not received. Next day ONE DAY after closing the documents came through to BOA, we signed and we Thought everything was done.

We were charged $438.00 late fee for closing one day late. Even though documents would not send until glitch was fixed we had late fee.

Our banker had BOA pay the fee, even though it was not their fault. TV closing person was actually upset, (not sure why she cared who paid the fee, but made us think it was a “you didn’t stay with Citizens) the penalty didn’t get paid by us, but BOA.

So from experience I will definitely caution you to make wise decision on who you use for your closing bank. $438. Daily fine was in 2010, can’t imagine how much Daily Fee would be imposed today, if you close One Day Late.

[dano121]

Well, my wife and I got a HUGE surprise! A week after signing the purchase agreement with the Villages my apparently uniformed Real Estate Agent called to tell me that the Villages does not accept FHA. Boy this really put us in a bind! We worked it out but would recommend that you do your own research about all of the details of owning a home in the Villages. Our Villages Agent actually told us that you can do anything with your home that you want.......Not so! My advice is to be wary of anything with Villages in its name. BTW - We do love the community here and with the exception of golf the facilities are great.

[BPRICE1234]

I'm increasingly seeing some of the issues people have w the developers. Many homes, new homes, sit for months. I don't see why a 45 day close would be an issue except to try to force people to their bank.

If I were a veteran, I would be a little ****ed and feel discriminated against.

[retiredguy123]

I'm increasingly seeing some of the issues people have w the developers. Many homes, new homes, sit for months. I don't see why a 45 day close would be an issue except to try to force people to their bank.

If I were a veteran, I would be a little ****ed and feel discriminated against.
I disagree. Anyone buying a house should make at least a 20 percent down payment, especially in a retirement community. No one should ever buy a house with no money down. It is financially irresponsible.

[asianthree]

I'm increasingly seeing some of the issues people have w the developers. Many homes, new homes, sit for months. I don't see why a 45 day close would be an issue except to try to force people to their bank.

If I were a veteran, I would be a little ****ed and feel discriminated against.

If you are looking to change the process the developer has in place for over 40 years, you really need to look elsewhere. Developer is solvent, and if you don’t buy their house, it’s no worries on their part.

I will say if you have grey areas on your CR, but have the required down $$$. Citizens First will make it happen if it’s possible. You can always choose any banking system you want, but as explained in my previous post, day 31 and everyday until you close late…there will be Heavy penalties.

However you have a choice of buying preowned, and then you can take alll the time you want to close.

[BPRICE1234]

That's their decision, not yours.

[Bogie Shooter]

Woe is me……….

[Rocksnap]

I disagree. Anyone buying a house should make at least a 20 percent down payment, especially in a retirement community. No one should ever buy a house with no money down. It is financially irresponsible.

A VA backed loan is strictly that, a backed loan. You can put 20% or more down, as TV requires. For new construction anyhow.

[hosegooseman]

I heard a rumor that you can't use a FHA loan to purchase a new home? Can anyone confirm this?

At least in 2021 when we purchased, yes. You couldn’t use FHA for new homes.

I suggest ask your Villages agent to be sure.

We ended up buying pre-owned, with FHA. Closed in exactly 30 days.

[TeresaE]

I disagree. Anyone buying a house should make at least a 20 percent down payment, especially in a retirement community. No one should ever buy a house with no money down. It is financially irresponsible.

Not necessary true. If you were self employed, like we were, our retirement funds are limited to what we saved in our retirement accounts. There’s Social Security but no pension. If we outlive our money, which we’re not planning to do, then we are sunk. So preserving cash is key. I’ve seen too many people who are equity rich and cash poor lose their homes because they can’t pay their taxes.

[Robojo]

I heard a rumor that you can't use a FHA loan to purchase a new home? Can anyone confirm this?

There is no contingency for ANY loan in the contract for a new home.

[Dlbonivich]

After reading these posts, it really makes me realize how the Villages developer has gotten so wealthy. The restrictions and threats almost require you to use their bank. I think their bank is very good at what they do, but it is really a monopoly. I have a lender who can easily close an FHA in a short time frame if the borrower cooperates and gets them all the info and documentation a timely manner. It would make you frightened to even try a different lender. Very big brother, they are in all your business. Where you shop, eat, bank, invest etc. I guess great for market research

[Robojo]

I disagree. Anyone buying a house should make at least a 20 percent down payment, especially in a retirement community. No one should ever buy a house with no money down. It is financially irresponsible.


Says you. If have 500k in the bank I wouldn't put 20k down. Not on these houses.

[retiredguy123]

Not necessary true. If you were self employed, like we were, our retirement funds are limited to what we saved in our retirement accounts. There’s Social Security but no pension. If we outlive our money, which we’re not planning to do, then we are sunk. So preserving cash is key. I’ve seen too many people who are equity rich and cash poor lose their homes because they can’t pay their taxes.
And, even more people lose their homes and their credit rating because they don't have enough equity. The Government encourages military people to borrow 100 percent of their house value. Then they are foreclosed on, and, in many cases, the taxpayers are stuck with the cost. I know some will disagree, but personally, I don't consider the VA loan program to be a benefit because it promotes bad financial decisions, especially with young soldiers.

[retiredguy123]

Says you. If have 500k in the bank I wouldn't put 20k down. Not on these houses.
Some people, like me, hate debt. I have only had one mortgage about 40 years ago. I couldn't sleep at night, so I paid it off in 2 years.

[Marine1974]

When we moved here we inquired about using our VA loan benefits. We were told we could use any type loan we wanted but we still had to put 10% down and meet the requirement to close in 30 days. Since VA loans come with substantial funding fees and we had to make a down payment anyway we went conventional. That applies to a new home. You can use any kind of loan you want on a resale.

No down payment, no mortgage insurance
These are perhaps the biggest advantages to a VA loan. You don't need a down payment. None whatsoever. Most mortgage programs, such as FHA and conventional loans, require at least 3.5 percent to five percent down.

[Marine1974]

Wouldn’t it make more sense to inquire from a lender?

[Dantes]

I heard a rumor that you can't use a FHA loan to purchase a new home? Can anyone confirm this?

They will not except FHA or VA They want their money now they don’t want to wait for the paperwork to go through.
No respect for Veterans just money
If you need to go that route you don’t need to live here your poor
Just my opinion on how they feel

[Marine1974]

And, even more people lose their homes and their credit rating because they don't have enough equity. The Government encourages military people to borrow 100 percent of their house value. Then they are foreclosed on, and, in many cases, the taxpayers are stuck with the cost. I know some will disagree, but personally, I don't consider the VA loan program to be a benefit because it promotes bad financial decisions, especially with young soldiers.
Why would I put a cent down on a VA loan when my interest rate is 2.30 % . The VA wants to keep veterans in their homes . VA loans our assumable . The spouse of a veteran has all the benefits as the Veteran so they too can stay in the house . Foreclosures are very low . Lower than conventional loans .

[Marine1974]

They will not except FHA or VA They want their money now they don’t want to wait for the paperwork to go through.
No respect for Veterans just money
If you need to go that route you don’t need to live here your poor
Just my opinion on how they feel
Why can’t a veteran not afford to live in the villages if their interest rate is 2.3% and you have a million in investments earning 8% . ?

[Pat2015]

Some people, like me, hate debt. I have only had one mortgage about 40 years ago. I couldn't sleep at night, so I paid it off in 2 years.
Many people, particularly younger people don’t have hundreds of thousands in cash to pay outright for a house. Also, even if you had enough cash two years ago to pay outright for your house, did it really make sense with mortgage rates at 2.5% to pay cash?

[retiredguy123]

Many people, particularly younger people don’t have hundreds of thousands in cash to pay outright for a house. Also, even if you had enough cash two years ago to pay outright for your house, did it really make sense with mortgage rates at 2.5% to pay cash?
I agree that not everyone can afford to pay cash for a house. But, the best way to accumulate wealth is to avoid debt whenever possible. And yes, I think it is a good idea to pay cash for a house if you can, regardless of the interest rate.

Many young military members are encouraged to use the VA loan program to buy a house with 100 percent financing. Then, they buy furniture with a credit card, a car (or two) with 5 year financing, go on vacations with a credit card, and pretty soon, they are hopelessly in debt and they are never able to accumulate any wealth.

Cash is king and debt is bad. That is just my opinion.

[Jayhawk]

Why would I put a cent down on a VA loan when my interest rate is 2.30 % . The VA wants to keep veterans in their homes . VA loans our assumable . The spouse of a veteran has all the benefits as the Veteran so they too can stay in the house . Foreclosures are very low . Lower than conventional loans .

Wrong. Delinquency for VA loans are 2.5 times higher than conventional. FHA is the worst of all.


As of October 2023, the serious delinquency rates for Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) and conventional loans were 3.2%, 2% and 0.7%, respectively

[asianthree]

Why would I pay cash for a home when I can make larger percentage on investments. Every time we buy a home, our investment guy figures out the best amount for down, mortgage, then when to pay large amounts to pay down, saving on interest and still have sufficient write off. I would much rather have a million in investment I can liquidate if need be , than a paid off million dollar home.
But to each his or her own

[graciegirl]

They will not except FHA or VA They want their money now they don’t want to wait for the paperwork to go through.
No respect for Veterans just money
If you need to go that route you don’t need to live here your poor
Just my opinion on how they feel

Oh please rethink this opinion. They do it because they can. Most people can easily comply at the age most of us are. I find enormous respect for veterans from all angles here. Have you spent much time in the Eisenhower Center??? We have a large population of retired military living here and I am very proud to live here with them. And I sense the same respect from the unseen Morses.

[asianthree]

Oh please rethink this opinion. They do it because they can. Most people can easily comply at the age most of us are. I find enormous respect for veterans from all angles here. Have you spent much time in the Eisenhower Center??? We have a large population of retired military living here and I am very proud to live here with them. And I sense the same respect from the unseen Morses.

Actually we have the largest veteran population after those who live on military base. I get why developers don’t want to use VA loans, first closing can take up to 60 days, and up to 3 hours just to sign documents.

Good to see your occasional post GG

[Topspinmo]

Why would I pay cash for a home when I can make larger percentage on investments. Every time we buy a home, our investment guy figures out the best amount for down, mortgage, then when to pay large amounts to pay down, saving on interest and still have sufficient write off. I would much rather have a million in investment I can liquidate if need be , than a paid off million dollar home.
But to each his or her own


But, what if you loose the invested money?

[MollyJo]

Wrong. Delinquency for VA loans are 2.5 times higher than conventional. FHA is the worst of all.


As of October 2023, the serious delinquency rates for Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) and conventional loans were 3.2%, 2% and 0.7%, respectively
FHA the new subprime
Foreclosures rolling down the tracks at an alarming pace.

[ithos]

I disagree. Anyone buying a house should make at least a 20 percent down payment, especially in a retirement community. No one should ever buy a house with no money down. It is financially irresponsible.
Not when interest rates were below 3%
2021: The lowest 30-year mortgage rates ever
And it kept falling to a new record low of just 2.65% in January 2021. The average mortgage rate for that year was 2.96%
Mortgage Rates Chart | Historical and Current Rate Trends (https://themortgagereports.com/61853/30-year-mortgage-rates-chart)

[Marine1974]

I disagree. Anyone buying a house should make at least a 20 percent down payment, especially in a retirement community. No one should ever buy a house with no money down. It is financially irresponsible.
I think it’s pretty smart to put no money down if your interest rate
is 2.30 % and your investments are earning 8 and 9 % . Plus you can write off the interest and real estate taxes with the irs .

[jim@jedward.com]

False. I’m an Appraiser. I just appraised six new construction homes in Sumter Villas in Sumterville. They were all FHA loans. Jim.

[Sandy and Ed]

We were told by our own bank (Not Citizens First) that the VA loan would take more than 30 days to complete, and The Villages requires a 30 day closing on new houses. We could get a 30 day closing from our own bank, but not on a VA loan. This was 2 1/2 yrs ago.
And VA loans are not friendly to the home seller. If I remember the seller needs to ante up an added contribution to the closing. (Btw I am a 30+ year retiree and obviously don’t begrudge any vet entitlements)

[Jayhawk]

I think it’s pretty smart to put no money down if your interest rate
is 2.30 % and your investments are earning 8 and 9 % . Plus you can write off the interest and real estate taxes with the irs .

Very few people even itemize anymore since the standard deduction is so high. How does spending $1 on interest make sense so you can deduct 25 cents from your tax bill? Write-off from taxes is no longer a valid argument

[Sandy and Ed]

Why would I pay cash for a home when I can make larger percentage on investments. Every time we buy a home, our investment guy figures out the best amount for down, mortgage, then when to pay large amounts to pay down, saving on interest and still have sufficient write off. I would much rather have a million in investment I can liquidate if need be , than a paid off million dollar home.
But to each his or her own
I’d rather have both and be at the stage of my life where I no longer really care (and I don’t).

[Sandy and Ed]

Not necessary true. If you were self employed, like we were, our retirement funds are limited to what we saved in our retirement accounts. There’s Social Security but no pension. If we outlive our money, which we’re not planning to do, then we are sunk. So preserving cash is key. I’ve seen too many people who are equity rich and cash poor lose their homes because they can’t pay their taxes.
Agree. All your net worth cannot be in real estate (or any other non liquid asset). We don’t include real estate in our net worth.

[Sandy and Ed]

Very few people even itemize anymore since the standard deduction is so high. How does spending $1 on interest make sense so you can deduct 25 cents from your tax bill? Write-off from taxes is no longer a valid argument
Absolutely correct. Zero interest paid and as much interest collected as possible. Use credit cards that earn you $$ and pay off the charge the same day.

Another thought: Use your IRA required minimum distribution at the end of the year to pay against taxes at the end of the year in lieu of estimated quarterly tax payments. Why?? Keep earning interest vs paying quarterly AND without any penalty. This I was told by our tax acct.

[Sandy and Ed]

And VA loans are not friendly to the home seller. If I remember the seller needs to ante up an added contribution to the closing. (Btw I am a 30+ year retiree and obviously don’t begrudge any vet entitlements)
…..so I’m thinking that as the seller of a new home The Villages might not want to contribute anything extra to a closing fee mandated by the VA or FHA. Might be rationale for them wanting only conventional loans, preferably thru their lender of choice. Maybe???

[Sandy and Ed]

Not when interest rates were below 3%

Mortgage Rates Chart | Historical and Current Rate Trends (https://themortgagereports.com/61853/30-year-mortgage-rates-chart)
Looked at the charts. Thanks for sharing. For the life of me I can’t understand why or how the interest rates could increase sooo dramatically since Jan 2021. Try as I might I can’t think of anything that could cause such an upsurge. Then again I’ve never been accused of being the sharpest pencil in the MENSA box

[SoCalGal]

At least in 2021 when we purchased, yes. You couldn’t use FHA for new homes.

The reason is that the developer doesn't want to be responsible for repairs if, upon inspection, the house fails to pass FHA's stringent requirements for minimum standards of health and safety.