FHA Home Mortgage
FHA stands for the Federal Housing Administration. FHA was created in 1934 to help Americans realize the dream of Homeownership. FHA was absorbed into HUD in the 1960s and is now known as HUD-FHA.
There are a great many benefits to the FHA loan program. FHA loans are insured by the US government. They provide lenders with greater security than they get when they write traditional loans. HUD sets the basic FHA guidelines for lenders, however, lenders are able to add on their own specific requirements. This is why not all lenders are able to offer FHA loans to the same individuals. It is very important that you deal with a company well versed in FHA loans and that knows exactly how to take advantage of all of their great features.
Listed below are some of the prime benefits of the FHA program:
FHA loans remain the most popular mortgage choice for first-time home buyers due to limited down payment, secure fix interest rates and government backing. Contact us at ph: 888-705-1975 to learn more.
- FHA has a low down payment of 3.5% (except for the HUD $100 down program seen below)
- 1.75% Up Front Funding Fee (rolled into the loan) and 0.80% monthly mortgage insurance for 2024. MI goes lower with down payments greater than 3.5% – see chart below.
- Low mortgage insurance coverage (typically lower than conventional mortgage insurance)
- Co-signers (including non-occupant co-signers) are allowed
- No income limitations at all. However, income must be fully documented
- No approved zoning requirements
- Mobile Homes, lot loans, and vacant land is not permitted.
- 80% loan to value on FHA cash-out refinance permitted in most cases.
- No need to pay off medical or small collection accounts (letters of explanation are used)
- No prepayment penalties EVER
- Security of a 30-year fixed mortgage. Borrowers can also choose other fix rate or adjustable rate terms.
- 6% seller contribution is allowed for closing costs with FHA
- Ability to use non-traditional trade lines to qualify (phone bills, light bill, electric bill, cell phone bill, etc..)
- High debt-to-income ratios over 50% are often allowed with compensating factors (great credit, etc)
- Compensating factors such as length of time on the job or funds (savings) in reserves help overlook negative factors
- No minimum bank savings reserves are required from the buyer
- Gifts funds are allowed from family, friends, work, or other interested parties
- FHA is great for first-time homeowners and public service workers like Teachers, Police, Firefighters, etc. FHA loans also allow buyers with challenged credit access to low-cost, secure fixed rate mortgage.
Have questions? Please submit the short Request Contact form above to be connected to a loan specialist 7 days a week.
2024 FHA MIP chart based on the loan amount and down payment:
If you are a home buyer located in USDA rural eligible area, please be sure to also check out the 100% USDA rural loan page. The USDA mortgage offers 100% financing in selected locations around the U.S. – even many locations in Florida, Texas, and California.
FHA Loan Limits For 2024:
The loan limits below apply to most 1-unit properties in the U.S. High-cost and muti-unit properties are even higher.
Other FHA Home Purchase Options:
Florida Hometown Heroes Loan Program: This program is reserved exclusively for Florida first-time home buyers who are full-time employed by any Florida-based business. The Hometown Heroes mortgage program allows 5% of the borrower’s loan amount (up to $35,000) to be used for closing costs and down payment assistance. Those purchasing a home under $200,000 will receive $10,000 in assistance. In short, buyers can have 100% FHA financing with closing costs included. This is achieved by a state-sponsored 0% deferred 2nd mortgage. Household income restrictions do apply, $128,250 and up depending on the county.
FHA HUD $100 Down Program: This is a specialty FHA mortgage program offered for HUD-owned houses throughout the nation. You can search the list of HUD-owned homes in the HUD web link below. The big benefit of the HUD 100 down loan program is home buyers can purchase a property with nearly NO money out of pocket. Again, please be remember this program is only available for HUD-owned properties.
FHA 203K Loans: Looking for a home loan that can finance the cost of remodeling or improvements? If you’ve found the ideal home, but it needs a little work, the FHA 203K Loan could be the answer. This program allows buyers to purchase a home and roll in the expense of renovations. Standard conventional loans require that homes have certain things in working order before closing.
The FHA 203k is a resourceful program for short-sale or foreclosed properties that may be distressed due to lack of maintenance. The program is important for expanding home ownership, revitalizing neighborhoods, and making homes safer for homeowners. Please note: FHA 203K loans are only for primary residences, borrowers must occupy the home full-time.
FHA Refinance Mortgage Programs:
FHA streamline refinance – No appraisal or equity is required when you refinance your current FHA mortgage loan into a new FHA loan. The streamlined refi program allows homeowners to take advantage of historically lower interest rates and lock into a new FHA mortgage – all without having to provide as much documentation.
No appraisal means the streamlined loan does NOT have equity requirements like many other loan programs. In addition, no new appraisal, survey or home inspections save the homeowner money on their closing costs. We can also structure the loan so that there are no out of pocket expenses for our clients. Homeowners will need a few things to be eligible for the Streamline program:
- Must currently have an FHA-insured mortgage (regardless of the original lender, we can help)
- Must have on-time mortgage payments for the last 6 months.
- Must have “reason to refi” like reduced interest rate and lower payments, or refinancing out of adjustable rate mortgage, into a fixed rate loan, etc.
- You cannot have refinanced within the past 6 months.
- Must have a 620+ credit score.
- Cash-out is not permitted with the streamlined refinance program. However, homeowners who have equity can contact us about other cash-out refinance options. Regular FHA cash-out refinance options are available up to 85% loan to value. Cash-out refinance options will require full appraisal and income, asset documentation.
Borrowers can contact us to learn more about any of the FHA programs. Please select the Request Contact icon at the top of your screen, or call ph: 888-705-1975. We generally respond to all submitted requests within minutes during regular business hours!