FHA Loans

An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). FHA loans are designed for low to moderate income borrowers who are unable to make a large down payment.

Why an FHA Loan?

FHA loans allow the borrower to borrow up to 96.5% of the home’s value. Down payment requirements as low as 3.5% can come from a gift or a grant. Since FHA loans have lower down payment requirements and more lenient credit restrictions, FHA loans are excellent options for first-time homebuyers or those who have average credit scores or are rebuilding their credit. In addition, because the FHA backs the loans, lenders can offer better deals than they would otherwise.

FHA Loan Requirements

  • FICO score as low at 540 may qualify
  • Debt-to-Income Ratio less than 43%
  • Mortgage Insurance Premium is required
  • The home is the primary residence
  • Steady income and proof of employment

These materials are not from HUD or FHA and were not approved by HUD or a government agency.

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