FHA Loans

FHA loans are mortgages backed by the Federal Housing Administration (FHA) so they are federally insured and provide investors a buffer for their risk so they can provide mortgages to borrowers who would not otherwise qualify under conventional lending guidelines. This insurance is paid by the borrower in the form of an up front mortgage insurance premium of 1.75% of the loan amount which is typically rolled back into the loan, and monthly mortgage insurance of .85% of the loan amount. This mortgage insurance (MI) is applied for the life of the loan unless the borrower puts down at least 10% of the sales price, in which case the MI will last 11 years and then drop off.

FHA mortgages allow for a higher debt to income ratio (DTI), a lower down payment, and lower credit scores. There are a lot of borrowers who have had hiccups with their credit or have taken on a little too much debt for conventional guidelines, but are otherwise excellent home buyers. Because of this, FHA provides a fantastic loan program to help home buyers achieve their dream of owning a home. Many first time home buyers use an FHA loan as a stepping stone as their lives and careers develop. Give me a call or send me an email and I will see if you qualify for an FHA loan. Many people who think they wouldn’t qualify are often surprised by the flexibility of this program.

To offset the MI, and because FHA loans are federally insured, FHA rates are often lower than conventional rates. The minimum down payment for an FHA loan is 3.5% and depending on the credit situation, we can sometimes go below a 620 credits score.

FHA FAQs

Absolutely. FHA requires at least three years have passed since the deed transfer. This is important because when you foreclosed on your home, it may not have been sold right away if the bank took over. There is often a “sheriff’s sale” that coincides with the actual deed transfer date.

A family member can “gift” you the funds for the down payment; however, we may have to source that money coming from their bank account which means we need to see their bank statement so be sure to let them know this when you have the discussion for gift funds. I can help keep their information private so nobody else can see their financials, which is a common concern when it comes to gift funds from family members.

Unless it’s a 580 or above, most likely not. But we would need to see why your credit score is in the 500’s. There have been countless instances where addressing just a few issues have bounced people’s scores well into the 600’s and they were in their first home within 6 months. I will need to pull your credit to see what is going on.

Having no credit is easier to address than having “bad” credit. There are nontraditional programs to help you with no credit scores, but I can also provide some guidance on how to get your credit registered with the credit bureaus so you could potentially buy a house in 3-6 months.

I’m afraid it doesn’t work like a car loan. If you have a borrower and a co-borrower, we have to use the lower of the two mid-scores for qualification. Your income would most likely satisfy the debt to income ratio part of qualification, but it doesn’t allow us to circumvent your credit. We still  have to use your lower score.

No. If your loans are in deferment, we have to add 1% of each loan amount to your monthly expenses for FHA loans.  If you can still qualify after adding in a 1% payment for each loan with a satisfactory DTI, then you are good to go. If not, we’ll need to take a look and see what options are available.

Why Choose Me As Your FHA Mortgage Loan Officer?

  • Zero fees or points so we keep your closing costs as low as possible

  • Extremely low rates

  • Lender credits to help pay closing costs

  • We close FHA loans fast!

  • I can close loans other lenders can’t