Federal Housing Administration Loan
The Federal Housing Administration (FHA) Loan Program is designed to assist homebuyers with low down payments and affordable closing costs. The U.S. Department of Housing and Urban Development (HUD) insures these loans. HUD insures loans in urban and rural areas for owner-occupied single family homes, excluding investment properties. Such loans are highly popular among first-time homebuyers.
FHA Loan Information:
- FHA Loans only require a 3.5% down payment with a 580 credit score. Also, you may qualify with credit that ranges from 500-579 with a 10% down payment.
- The FHA allows sellers, builders, and lenders to pay up to 6% of closing costs.
- Gift funds are allowed (subject to FHA guidelines).
- Borrowers are required to pay two types of mortgage insurance premiums. One is an upfront mortgage insurance premium which is 1.75% of the home loan or it can be financed into the mortgage. The second mortgage insurance premium is the annual premium which is paid monthly.
Candidates for FHA Loans:
- Borrowers with a lower credit rating (subject to FHA guidelines)
- Anyone who cannot afford to pay a large amount as down payment
- A person with a high debt-to-income ratio
Benefits of FHA Loans:
- Low down payments
- Less strict credit score requirements which makes it easy to qualify
- Streamlined Refinancing
If you are interested in buying a home and meet the FHA’s credit qualifications, you may be eligible for the FHA Loan.
At First Community Mortgage, we extend FHA Loans to people residing in Killeen, Harker Heights, Copperas Cove, San Antonio, Temple, North Padre Island, and El Paso, Texas. We have now extended our geographical reach and are also offering FHA Loans to people in and Peoria, Arizona.
You can contact the loan office closest to you for more information.