FHA loans have been helping people become homeowners since 1934.
Some Benefits of FHA Loans
- Low down payments
- Low closing costs
- Easy credit qualifying
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 included in the loan. 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 remodel 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 live in your home? Do you own it outright or have a low loan balance? If you can answer “yes” to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash.
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. There are two loan products – one for those who own the land that the home is on and another for mobile homes that are – or will be – located in mobile home parks.
FHA Loans: Helping People Become Homeowners
The Federal Housing Administration (FHA) – which is part of HUD – insures the loan, so your lender can offer you a better deal.
FHA allows a buyer to purchase a home with as little as 3.5% down. They tend to be more lenient on areas such as credit, funds to close, and co-borrowers.
Most loans use a method of analyzing credit called credit scoring in the underwriting process. FHA does not have specific credit score requirements. Although a high credit score may assist in getting the mortgage approved, a low score is not automatically causing denial.
The underwriter on an FHA loan will review the credit and payment history of a customer concentrating on the most recent 12 to 24 months. Because of FHA’s leniency, some borrowers with past credit problems elect to use FHA for loans when they have a substantial down payment rather than getting a higher interest rate on conventional loans.
In an FHA mortgage, the customer must put at least 3.5% of the sales price into the transaction. Keep in mind, however, that the total cost to close on an FHA is commonly over 3.5%.
The interest rate that you select will also have a bearing on the total costs. FHA allows the borrower to get the funds necessary to close from several sources, including savings, gifts, grants, or loans from retirement accounts.