BABS Rates for FHA 242 - 25 year fixed rate self amortizing loan

Currently Rates on BABS loans are running about 5.50% to 5.75% before the 35% rebate from the BABS (Build America Bonds), this results in an effective fixed rate for 25 years of 3.65% plus MIP for a twenty five year loan.  The FHA process puts the bonds in use during construction draws to generate the rebate from the government during construction.  FHA is allowing GNMA AAA insurance for BABS FHA 242 Bonds which means that the borrower does not need a 10% interest reserve.  FHA 242 Mortgage insurance can be used to credit enhancee a combination of BABS, Tax-Exempt and/or Taxable Bonds to cover the borrowers needs and to fund  issuance costs.

The fixed rate program requires NO - DERIVATIVES or HEDGES of bank credit enhancement programs offered with high annual credit enhancement cost for low floaters.