FHA Financing

A FHA mortgage that is insured by Federal Housing Administration (FHA). FHA does NOT lend money, it insures loans from FHA approved lenders. FHA loans are very popular because loans through the FHA are insured by the agency, so lenders are more lenient.

Benefits

• 15, 20, 25 and 30 year fixed-rate amortization terms

• Credit score as low as 580 may qualify

• Available in a variety of fixed rates and adjustable-rate loan options

• Down Payments as low as 3.5% of the home's purchase price

• May allow you to use a gift or grant for all or a portion of the down payment or closing costs

• Maximum mortgage limits vary by state and country

• FHA will allow a home buyer to "assume" the exciting FHA mortgage on home being purchased

• Borrower can quality earlier of they have gone through a foreclosure, short sale or bankruptcy

• Higher DTI up to 55% with compensating factors

• Pay-off of 2nd is rate-term

• Rate-Term Refinance up to 97.75% LTV

• Cash-Out Refinance 80% LTV

How to qualify

• Credit score of 580 or above

• At least one established credit amount (a credit card, a car loan, etc.)

• No existing delinquent federal debt or judgments or debt associated with past FHA mortgages

• Account for cash gifts that help with the down payment by verifying with a signature and date in writing, by the donor

• Property must meet FHA geographic loan limits and property requirements:

  • The loan must be for a principal residence

  • An FHA appraisal includes a strict inspection, assuming a home not only on value but also on minimum property standards

  • Bankruptcy Chapter 7- 2 year waiting period

  • Bankruptcy Chapter 13 BK- allowed to be in repayment after BK has been discharged

  • Short Sale and Foreclosure- 3 year waiting period