FHA Loans with Ed Huber

FHA Loans

FHA loans are a type of government-backed mortgage insured by the Federal Housing Administration, designed to make home-buying more accessible to people with lower credit scores and smaller down payments. Here's a basic summary:

  1. Low Down Payments: FHA loans allow for down payments as low as 3.5% of the purchase price for borrowers with credit scores of 580 or higher. For those with credit scores between 500 and 579, a 10% down payment may be required.
  2. Credit Score Flexibility: FHA loans are accessible to individuals with lower credit scores than conventional loans. While the exact credit score requirements vary by lender, the FHA allows for scores as low as 500 under certain conditions.
  3. Mortgage Insurance: Borrowers must pay insurance premiums (MIP) for FHA loans. This includes an upfront premium, usually 1.75% of the loan amount, and an annual premium, which varies based on the loan term, loan amount, and the initial loan-to-value ratio (LTV).
  4. Loan Limits: FHA loans limit how much you can borrow, which vary by county and are adjusted annually.
  5. Property Requirements: The home must meet specific safety, security, and soundness (structural integrity) standards as determined by an FHA-approved appraiser.
  6. Primary Residence Only: FHA loans are intended for primary residences only, meaning the borrower must intend to live in the home as their principal residence.
  7. Assumable: FHA loans are assumable, meaning a future buyer can take over your loan under the same terms, which can be a selling point if interest rates rise in the future.
  8. Loan Types: FHA loans can be used for various types of properties and purposes, including purchasing single-family homes, multifamily properties (up to 4 units), specific condos, and refinancing existing mortgages.

FHA loans are popular among first-time homebuyers due to their lower credit score and down payment requirements. Still, they can also be a good option for anyone who meets the eligibility criteria and is looking for more lenient borrowing terms.