FHA loans are an attractive option, especially for first-time homeowners because it is insured by the Federal Housing Administration (FHA). Primarily, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments.Typically the borrower can be approved with 3.5% down vs 20% that is required on other loan programs.
An FHA (federal housing admin) loan is a government backed mortgage, popular with first time home buyers with little cash for a down payment and less than ideal credit.
Who’s eligible ?
You can qualify for an FHA loan with a FICO score as low as 500 with 10% down or if your credit score is 500-579 3.5% down.
- Steady employment with same employer for 2 years
- Verifiable income through pay stubs, federal tax returns and bank statements
- Loan is used for primary residence
- If you’ve experienced a bankruptcy you must wait 2 years to apply – a foreclosure – 3 years. Lenders may make an exception on waiting periods with extenuating circumstances
Financial hardship relief may be available – flexibility on the loan requirements to persons that suffered a hardship or have challenges making their payments – forbearance – loan modification – lowers interest rate and extends the payback period
Can I use FHA loan to purchase and repair a home? a 203k allows home buyer to make major renovations to a home ie; bathroom/kitchen remodels, flooring, plumbing HVAC (heating, venting & air conditioning) – the cost of repairs rolls into the mortgage amount.
Apply for a FHA loan with a FHA qualified lender.
Are you or your spouse active or retired Military? Perhaps a VA loan would be more beneficial for you and your family.