FHA loans can be used to purchase a home or refinance an existing mortgage, and there are many benefits to having an FHA loan. You can purchase a home with a lower down payment than a conventional loan, or use a streamline refinance to lower your current payment, with less documentation than a traditional loan.

Description

FHA loans have been around since 1933 and require as little as 3.5% down and more flexible underwriting making them easier to qualify for than Conventional loan programs.

Features

3.5% down for purchases and 97% LTV for refinances. Available with adjustable or fixed rates with 15 and 30 year terms. FHA loans have two types of mortgage insurance; Up Front Mortgage Insurance (1.75% of the loan amount financed into the loan) and Monthly Mortgage Insurance (.85% of the loan amount divided by 12) paid monthly and included in your monthly payment.

Benefits

Low down payment requirement and more flexible guidelines make FHA loans easier to qualify for. 100% of your down payment may come from a gift.

Ideal For

First time home buyers or buyers with limited funds for a down payment. Also good for borrowers who have had some past credit problems or do not have a 620 credit score.

Qualifications

A minimum credit score of 500 (no score programs available). You should have generally good credit in the preceding 12-24 months.

Did you know?

FHA is a a government backed insurance program. Since 1933 the Federal Housing Administration through the Department of Housing and Urban Development has insured FHA Loans. With more flexible underwriting guidelines, more people may qualify for this type loan.