FHA Loans

Since going into effect in 1934, the National Housing Act has helped millions of families afford new houses by offering affordable loans. FHA Loans originally started as a way to help people afford to make payments on their houses during the Great Depression when foreclosures rose dramatically. Today, FHA Loans area still helping people who cannot afford big down payments and those who cannot otherwise qualify for private mortgage insurance (PMI).

Requirements

While obtaining an FHA Loan is quite simple, there are still a few requirements that need to be met before the loan is issued. The first requirement is that the borrower meets the standard FHA credit qualifications. Next, the borrower must be responsible for paying an annual premium. Finally, the house must be one to four unit structures.

What are the benefits?

While the borrower is still responsible for a down payment on the property, it is possible to qualify for a loan by putting only 3% down on the house. This is hugely beneficial for families who do not have the money saved up for a big down payment of 20% which is what conventional loans typically charge. Additionally, there are some closing costs the borrower must pay, but the FHA puts a cap on this amount and even allows the borrower to roll the amount into the cost of the loan in some situations. If you are planning on buying a fixer-upper or a house that you are going to make energy-efficient changes to, the cost of repairs and improvements can be worked into the total cost of the loan. Finally, as a borrower you will have easy credit qualifications.

How much can I borrow?

How much you can borrow for a new house depends on the county you live in. Each county has its own limit which is how much the FHA is willing to insure in that area. To see what your county’s loan limits are, be sure to check out the US Department of Housing and Urban Development website.

How do I get started?

It’s a good idea to get pre-approved for an FHA Loan before you start looking for your new home. This way you will know just how much you will be able to afford when shopping around. Take a minute to fill out our secure online form and we’ll have you pre-qualified instantly!

Why You Should Choose an FHA Loan | fha rates | fha loan limits | fha loan guidelines