1. Finance
Lesson Five

2. Learning Objectives Understanding the basics of FHA & VA loans.
Applying the terminology to the FHA & VA programs.

3. FHA (Federal Housing Administration)
Department of Housing and Urban Development (HUD)
HUD-1 Settlement Form
Insures Lenders (they do not make loans)

4. No Prepayment Penalties
Fixed Rate (Budget Loan)

5. Budget Loan P & I $700 MMI (FHA Ins.) $ 5 Real Estate Taxes $ 50
Insurance $ 80
Total Monthly Payment $835

6. Mutual Mortgage Insurance

7. Selling Price of House is: $77,000
FHA Appraisal is: $75,000
3% of $75,000 = $ 2,250
Loan Amount $72,750

8. Assumable (financially qualified)
Selling Price may Exceed Appraised Value
Sales Price $80,000
Appraised Price $75,000

9. VA Loan Guarantees the Lender Does Not Insure the Loan Can be 100%
Certificate of Eligibility