FHA Loan

• Low interest rates
• First-time homebuyers
• Gift for down payment
• No credit score allowed
• 500 minimum credit score
• Non-occupying co-borrower
• Seller paid closing costs up to 6%
• 3.5% down with a 580 credit score
• FHA maximum debt-to-income ratio can be over 55%
• Manual underwriting maximum debt to income ratio is 40/50%

Property Type:

• Single Family
• 2 Unit
• 3 Unit
• 4 Unit
• Condo
• Townhouse
• Manufactured homes
• Mobile homes

Refinance:

• 500 minimum credit score
• Up to 80% LTV for cash out
• Up to 97% for rate/term
• No recent late mortgage late payments
• Primary residence only
• No credit score allowed

What is an FHA Loan?

An FHA loan is a great option for homebuyers. They’re not directly provided by the FHA, but the FHA acts as an insurer for approved lenders, allowing for more favorable borrowing terms.

With an FHA loan, you can secure a loan with a lower credit score and smaller down payment. The debt-to-income ratio is more lenient, and non-traditional income sources are considered.

The property must meet specific requirements, but even fixer-uppers can be accommodated with the 203(k) renovation loan.

Keep in mind that there are mortgage insurance premiums, but they can be canceled once your loan-to-value ratio improves.

Unlike conventional loans, a credit score of 500 is generally considered acceptable. An FHA loan offers competitive interest rates and take a more holistic approach to your overall financial situation.

By making timely payments, you can positively impact your credit score over time. Remember to work on improving your credit score and maintaining a positive credit history for greater financial stability and success.

How to Apply for an FHA Loan?

If you’ve decided that an FHA loan is the right fit for your homebuying journey, the first step is to navigate the application process.

Applying for an FHA loan involves several key steps that ensure your eligibility and set the stage for your successful homeownership experience.

1. Preparation and Documentation

Gathering the necessary documentation is the first crucial step in applying for an FHA loan. This typically includes:

• Proof of identification (such as a driver’s license or passport)
• Social Security Number
• Employment history and income verification (pay stubs, tax returns, bank statements)
• Details of existing debts and obligations
• Information about the property you’re interested in

2. Loan Application

The next step is filling out a loan application. This application captures important information about your financial situation, employment history, and the property you’re interested in.

3. Credit Check and Pre-Approval

We will conduct a credit check as part of the application process. This helps determine your creditworthiness and informs the terms of your loan.

If your credit meets the FHA’s requirements, you’ll receive a pre-approval letter. This letter strengthens your bargaining position as a serious buyer.

4. Underwriting and Approval

Once you qualify, your loan application enters the underwriting phase. During this stage, the lender reviews your financial information, credit history, and the property appraisal to make a final decision on your loan approval.

5. Closing

The closing is the final step in the process. During this meeting, you’ll sign all the necessary documents to officially secure your FHA loan and become a homeowner.

What are the Benefits of an FHA Loan?

• Lower Down Payment
• Flexible Credit Requirements
• Competitive Interest Rates
• Accessibility for First-Time Homebuyers
• Rehabilitation and Renovation Financing
• Support for Diverse Income Sources
• Accessible Loan Limits
• Potential for Refinancing