FHA Loans
It's easy to understand why many people looking for a new home are turning to FHA insured loan programs. FHA loans have been helping people become homeowners since 1934. The Federal Housing Administration (FHA) – which is part of HUD – insures these loans, so your lender can offer you a better deal. FHA allows a buyer to purchase a home with as little as 3.5% down!
How FHA Loans Work
- FHA Loans are designed for first time homebuyers or low to moderate income borrowers who are unable to make a large down payment.
- FHA loans allow you to borrower up to 96.5% of the value of the home as long as the property is intended to be your primary residence with a new minimum credit score as low as 550!
- FHA offers both fixed and adjustable rate loans.
What does FHA have for you?
Buying your first home?
FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be contributed by the seller or covered by a gift. Qualify with a credit score as low as 550! Available on 1-4 unit properties.
Want a fixer-upper?
FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs – all in one loan.
Financial help for seniors
Are you 62 or older? Do you want to live in a new home free of monthly mortgage payments? If you can answer “yes” to both of these questions, then the FHA Reverse Purchase Mortgage might be right for you. It lets you purchase your new home with a cash down payment and the rest as part of a reverse mortgage.
Want to make your home more energy efficient?
You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.
How about manufactured housing and mobile homes?
Yes, FHA has financing for mobile homes and factory-built housing for those who own the land that the home is on.
FHA Benefits
Easier to Qualify
Government backing makes approval more likely
Low Down Payment
Only 3.5% down required, gifts accepted
Poor Credit OK
Lower credit scores can still qualify
Better Rates
Government backing provides competitive rates
FHA Loan Common Questions
FHA stands for the Federal Housing Administration. It was created in 1934 to help Americans get into homes.
A FHA insured mortgage is easy to qualify for, can be obtained with less than perfect credit, costs less and requires a smaller down-payment. Usually people refinance to save money, either by obtaining a lower interest rate or by reducing the term of the loan. Refinancing is also a way to convert an adjustable loan to a fixed loan or to consolidate debts. The decision to refinance can be difficult, since there are several reasons to refinance. However, if you are looking to save money, try this calculation: Calculate the total cost of the refinance Calculate the monthly savingsDivide the total cost of the refinance (#1) by the monthly savings (#2). This is the "break even" time. If you own the house longer than this, you will save money by refinancing. Since refinancing is a complex topic, consult a mortgage professional.
The recommended debt-to-income ratio for a FHA loan is 30%.
Yes, however be sure to check the pre-payment section of your contract before signing.
No, not all FHA loans are automatically assumable; while FHA loans are typically assumable, the buyer must still qualify with the lender, and the specific mortgage documents and lender approval determine if an assumption is possible. FHA loans are generally free from due-on-sale clauses, a key factor allowing for assumption.
Yes, in fact FHA mortgages often require you to carry mortgage insurance for longer than most conventional loans.
Yes, however you might be required to fix certain problems in the home before you can get the full loan. Speak with us today for details on this.
Looking for an FHA Loan?
FHA insured mortgages are some of the best kinds of mortgages available because they can help more people into the home buying market. Let our FHA loan specialists help you understand any new changes to the program and create a customized solution that works best for you and your family.