First things first: an FHA Loan is a mortgage that is insured by the FHA (or Federal Housing Administration). FHA Loans have no income limits, but require a 3.5% minimum down payment and a maximum loan amount of $472,030. If the property is a condominium, it must be on the FHA-approved list. In addition, an upfront mortgage insurance premium is financed into the loan, with seller concessions up to 6% of the sales price.
FHA Loans
What is an FHA Loan?
Who is eligible for FHA home loans?
Often popular among first-time home buyers, FHA Loans appeal to those who may not have a lot of savings or might be feeling some credit challenges (usually with a credit score of 580 or higher, although those with scores between 500-579 can still qualify, but need to make a larger down payment.) Also, with FHA Loans, gifts are allowed (such as financial support from family, employers or charitable organizations).
Features
Increased mortgage opportunity:
Since the FHA insures mortgages (providing an added layer of protection) a lender is more apt to offer favorable terms to borrowers who might not otherwise qualify for a home loan.
Multiple locations:
With an FHA Loan, owners can pursue buying or refinancing anything from single-family houses, multifamily houses, manufactured homes, or even condos. FHA Mortgages can also be utilized for renovations or new construction.
Higher debt-to-income ratio:
An FHA Loan allows for debt-to-income ratios as high as 50% (in other words, your monthly debt can’t be more than 50% of your income, pre-tax.)
Who is eligible for FHA home loans?
Often popular among first-time home buyers, FHA Loans appeal to those who may not have a lot of savings or might be feeling some credit challenges (usually with a credit score of 580 or higher, although those with scores between 500-579 can still qualify, but need to make a larger down payment.) Also, with FHA Loans, gifts are allowed (such as financial support from family, employers or charitable organizations).
What other loan types are available?
When it comes to loans, you have many more options than you think. Find out about some here:
