fha loans

An FHA (Federal Housing Administration) loan is a loan insured by the US Government against default.

In other words, if a borrower stops making mortgage payments and defaults on their loan, the FHA will repay the mortgage company its losses on the loan. This insurance by the government makes the FHA a very popular and important mortgage loan program to help those with lower credit scores and down payments achieve homeownership.

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Who can get an FHA Loan?

Almost anybody can get an FHA loan. There are no income limits and it will provide financing on 1-4 unit residential properties to be used as primary residences. However, there are limits on how much you can borrow based on where the property is located. To qualify for an FHA loan, you’ll need a minimum 620 credit score and maximum debt to income ratio of 43% (exceptions made up to 55% with compensating factors). The interest rate and closing cost structure of the FHA loans are best suited for clients with less than perfect credit score and low down payment/equity.

Benefits of FHA loans:

  • Buy a home with as little as 3.5% down

  • Refinance loans up to 97.75% of the current value of your home

  • Low fixed interest rates for lower credit score borrowers

  • Low minimum down payment required for lower credit score borrowers

  • Streamline refinance available for fast and easy way to reduce your interest rate/payment with no appraisal and little or no closing costs

  • Clients with a previous bankruptcy can qualify 2 years after discharge

  • Clients with a previous foreclosure can qualify 3 years after Sheriff’s Deed Transfer