Federal Housing Administration
Home Ownership Opportunities with FHA Loans
The Federal Housing Administration, generally known as “FHA”, provides mortgage insurance on loans made by lenders, which allows the lender to bear less risk in the event of the homeowner’s default. The FHA has insured over 34 million homes since its inception in 1934.
- For 1st-time buyers and move-up buyers, too!
- Available for 1-4 unit properties (owner must occupy one unit)
- Gift funds from immediate family members allowed for down payment and closing costs
- Qualified non-occupant cosigners permitted on 1-unit properties
- Options to buy a home and finance the fix-ups – or refinance and add the cost of repairs/remodel
- Flexible credit qualifying guidelines for debt-to-income ratio, credit history, and credit scores
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Benefits of FHA Loans: Low Down Payments and
Less Strict Credit Score Requirements
- Typically an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down payment and you can have less-than-perfect credit. For FHA loans, down payment of 3.5 percent is required for maximum financing. Borrowers with credit scores as low as 500 can qualify for an FHA loan.
- Borrowers who cannot afford a 20 percent down payment, have a lower credit score, or can’t get approved for private mortgage insurance should look into whether an FHA loan is the best option for their personal scenario.
- Another advantage of an FHA loan is that it can be assumable, which means if you want to sell your home, the buyer can “assume” the loan you have. People who have low or bad credit, have undergone a bankruptcy or have been foreclosed upon may be able to still qualify for an FHA loan. Contact us to discuss the advantages of FHA financing!