FHA Loans – Understanding the Basics
The FHA loan program has been sought out by many first time homebuyers because of its flexible qualifying guidelines and reduced down payment requirements when compared to conventional loans.
What Is an FHA Mortgage?
Per HUG.gov, “The Federal Housing administration, generally know as “FHA”, provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world, insuring over 47.5 million properties since its inception in 1934.”
Further information is available here.
What are unique benefits of the FHA loan program?
- Allows for a down payment as low as 3.5% of the purchase price
- Closing costs and Pre-Paid (Settlement Charges) can be paid for by the seller up to 6% of the sales price provided it is negotiated within the sales contract.
- Underwriting guidelines can be flexible with previous credit challenges such as late payments, bankruptcies, and foreclosures, but remember minimum credit conditions will apply and a certain credit score does not guarantee an approval.
- Special Financing under the HUD REO $100 down payment program:
- $100 down payment with FHA financing
- Eligible for up to $5,000 in escrowed repairs
- Only eligible properties are allowed for this program
Important things you should know about an FHA Loan…
Monthly paid mortgage insurance premiums (MIP) are required along with a one-time financed Up Front Mortgage Insurance Premium (UFMIP) that is paid at closing.
Are you interested in an FHA Mortgage?
Metroplex Mortgage Services is known for our overall government loan expertise and how we help homebuyers walk through the qualifying process step-by-step.
(800)806-9836 Ext. 280
Whether it be USDA, VA, FHA, or Conventional loans just call or email to discuss your scenario and let us show you the "Metroplex" difference.
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.