FHA Mortgage Loans are insured by the Federal Housing Administration to protect FHA-approved lenders and minimize their risks. There are many advantages to an FHA Loan, including down payment requirements that are generally lower than other mortgages…typically around 3.5%. They also allow for higher debt ratios, high seller concessions, and have more favorable interest rates than Conventional Loans. Upfront Mortgage Insurance premiums are typically kept to 1.75% of the loan, regardless of the borrower’s credit score, and can be paid at closing or rolled into the mortgage.
To qualify for an FHA Loan, a borrower must:
- Have a steady employment history
- Have a valid Social Security number, be a lawful U.S. resident, and be of legal age to sign a mortgage in your state
- Make a minimum down payment of 3.5%
- Have the property appraised by an FHA-approved appraiser
- Have a minimum credit score of 580 for maximum financing with minimum 3.5% down payment
- Be two years out of bankruptcy and have re-established good credit
- Be three years out of foreclosure and have re-established good credit
If you can’t afford the traditional down payment of 20% or can’t get approved for private mortgage insurance, FHA Loans are your best bet to get the home you want!
What You Can Do With an FHA 203k
*Down payment and other terms shown are for informational purposes only, and are not intended as an advertisement or commitment to lend. Not all borrowers will qualify; please contact us for an exact quote and more information on fees and terms.