A Quick Look at FHA loans
FHA, or Federal Housing Administration loans, can help you boost your buying power.
They don’t give you the money, but they insure the loan, which makes your lender happy.
Low Down Payments: With an FHA loan, you can put down as little as 3.5%. FHA loans are available on 1-4 unit properties. That’s according to HUD.gov.
Flexible Credit Scores: It is possible for you to qualify for an FHA loan with a credit score as low as 500. Many lenders have overlays though, which are requirements in addition to meeting government requirements. For example, it is possible to qualify for an FHA loan with a 500 credit score, but certain lenders may require a 580+. That is an example of an overlay.
Note: You’ll have to pay for up front and annual mortgage insurance premiums. Also, the FHA is picky about their homes being safe and secure, so if the property’s a fixer-upper, you may need to have repairs made before moving in.
FHA loans are especially good for first-time buyers and those with lower credit scores or smaller down payments.
According to HUD.gov, you can also include the costs of energy improvements into an FHA Energy-Efficient Mortgage.
If you are 62 or older, you live in your home and own it outright or have a low loan balance, you might be eligible to consider the FHA Reverse Mortgage, which lets you convert a portion of your equity into cash.
FHA also has financing for mobile homes and factory-built housing. According to HUD.gov, 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's nationwide forward mortgage limit "floor" and "ceiling" for a one-unit property in CY 2023 are $472,030 and $1,089,300, respectively. That’s according to government regulators.
If you need help finding a down payment assistance program, you can message me and my team and I can help you.
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Holly Ecimovic, NMLS 2396592
Licensed Loan Processor/LOA
Edge Home Finance Corporation
Company NMLS 891464
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