FHA Loans – Understanding the Basics
The FHA Loan has been sought out by many first time hombuyers because of its flexible credit qualifications and lower down payment requirements. Below is an overview of the FHA Loan to help you understand what the FHA Loan can offer you.
What is an FHA Mortgage?
The FHA Loan is a mortgage that is backed and insured by the Federal Housing Administration (FHA). The original purpose of the FHA Loan Program was to help lower income buyers afford a home with a lower down payment requirement.
What are the unique benefits of the FHA Loan Program?
- Allows for a down payment as low as 3.5% of the purchase price
- Closing costs can be paid for up to 6% of the sales price can be paid for by the seller if negotiated within the sales contract.
- Underwriting guidelines can be flexible with previous credit challenges such a late payments, bankruptcies, repossessions, etc.
- Zero Credit Score underwriting exceptions are possible
- Eligible State, County, and City down payment assistance (DPA) programs can be used provided the borrower is able to qualify for both the FHA mortgage and with the DPA guidelines. Even though this form of assistance is permissible with FHA, underwriting guidelines from lenders or banks always have the final approval with what will be allowed.
- Special financing programs allowed for existing HUD foreclosures – See Below*
*HUD REO $100 Down Payment Program
- $100 down payment with FHA financing
- 620 Minimum Credit Score
- Eligible for up to $5,000 in escrowed repairs
- HUD may provide seller concessions up to 3% towards buyer closing costs
- Fixed Interest Rates
- Only eligible properties are allowed for this program. Please contact us for more details.
- Single Family Homes, Townhomes (No Manufactured Homes for this option)
- Condominiums (Prior approval by FHA Field Office is required)
How can I qualify for an FHA Loan?
- Minimum credit scores are required
- U.S. citizens & permanent residents; non-permanent residents may also qualify
- FHA Loans only finance primary residences only that are owner occupied
Important things you should know about an FHA Loan…
Monthly paid mortgage insurance premiums (MIP) are required along with a onetime financed Up Front Mortgage Insurance Premium (UFMIP) that is paid at closing.
FHA Loans Resources:
- Eligible properties found at: www.HUDHomeStore.com
- For more details: Florida, Texas, Tennessee
- Official FHA website
Are you interested in an FHA Mortgage?
Without the right assistance, qualifying for an FHA Mortgage can be very difficult and overwhelming. It’s always best to discuss your options with a lender you can trust like Metroplex Mortgage Services. Our financing expertise has helped thousands of homebuyers become happy homeowners and we can help you too!
If you are in the market for a home it is important to become pre-qualified. You can get started in less than 5 minutes! Or you may contact us with any questions you may have.
QUESTIONS? CONTACT US HERE.
More specific loan program information can be found at our FHA Loan Blog.