FHA

FHA Loans

A FHA Loan is a mortgage that’s insured by the Federal Housing Administration. They allow borrowers to finance homes with down payments as low as 3.5%. FHA loans are a good option for first-time homebuyers who may not have saved enough for a large down payment. Even borrowers who have suffered from bankruptcy or foreclosures may qualify for an FHA-backed mortgage.

Federal Housing Administration loans have been around since 1934. for years. A few benefits of the FHA loan:

  • Low down payments – 3.5% of the sale price
  • Borrowers can finance 1-4 unit properties including condos and townhomes
  • Seller can pay up to 6% toward the buyers closing costs and prepaid items like taxes and insurance
  • Easier credit qualifying – lower credit scores allowed
  • FHA allows the borrower to get the funds necessary to close from several sources. They include personal savings, gifts, grants, loans from retirement accounts and seller contribution.

The FHA, or Federal Housing Administration, provides mortgage insurance on loans made by FHA-approved lenders. FHA insures these loans on single family and multi-family homes.

Program requirements:

  • Credit scores of at least 580 is required to do the 3.5% down payment
  • Credit scores between 500 and 579 require 10% down payment and an automated approval
  • MIP (Mortgage Insurance Premium) is required
  • The home must be the borrower’s primary residence
  • Borrower must have steady income and proof of employment
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Click here to learn more about other programs:

Conventional Loans
Rural Development Loan
VA Loan

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