An FHA Loan is a type of government-backed mortgage. You may qualify for an FHA Loan if you have debt or a lower credit score. You might even be able to get an FHA Loan with a bankruptcy or other financial issue on your record. Don’t worry too much about your credit.
If you are self-employed, a first-time buyer, or a borrower with non-traditional credit, an FHA Loan may be perfect for you. FHA Loans have no income requirements, no geographic restrictions, and have liberal qualification requirements. Typically FHA also offers a lower down payment.
The FHA Loan is only one of many loan options for home buyers. If you are looking for a lower down payment option, check out our USDA / RD Loans or VA Loans which require no down payment.
FHA Loans were created during the Great Depression for one purpose— to allow more people to become homeowners!
Aside from having the coolest mortgage staff on the planet…working with Treadstone on your mortgage in West Michigan gives you a distinct advantage in not only getting your offer accepted, but also in becoming a more successful and enlightened home owner.
FHA mortgage rates fluctuate daily based on several financial indicators and trends, just like gas prices.
There are many requirements for an FHA Loan, but the general core requirements include:
— FICO score at least 580 = 3.5% down payment.
— PMI (Private Mortgage Insurance) is required.
— The home must be the borrower’s primary residence.
— You must have a steady income and proof of employment history.
It is possible to purchase a mixed-use property using an FHA Home Loan and its low down payment requirements, but if the home is not primarily used as a residence and has 50%, or more floor space taken up by non-residential use, it cannot qualify for an FHA mortgage.
Disqualifications include:
— Usage of FHA Loan on investment or secondary homes
— Property is less than 50% residential
— Down payment less than 3.5%
— Loan value above $420,680
— Filed bankruptcy within 24 months
Absolutely! It is common for borrowers to refinance an FHA Loan, either replacing it with a Conventional Loan or another FHA Loan, in order to remove PMI (Private Mortgage Insurance), cash-out their home’s equity, or change their loan’s terms. FHA also offers a Streamline refinance, which allows FHA borrowers to lower their mortgage rate without pulling credit or verifying income.
For more information on refinancing, visit our re-fi page!
FHA Loans require all borrowers to have FHA Mortgage Insurance Premiums (MIPs), also known as Private Mortgage Insurance (PMI). This is additional insurance for the origination of the loan, which protects lenders from default. These premiums also exist in other loan types—your Loan Officer can accurately weigh your options. Mortgage Insurance Premiums for FHA Loans change depending on the loan term, amount, and loan-to-value ratio.
Homebuyers with an FHA Loan are required to place a minimum of 3.5% down. For comparison, conventional loans require 3-5% down, while USDA Loans & VA Loans require 0% down. Each loan program contains unique qualification requirements— the down payment is only one piece of the puzzle.
The maximum loan amount for Michigan FHA Loans in 2024 is $498,257 for single family homes/condominiums. Be sure your FHA Loan financing remains below the limit!
If you have received, or plan to receive gift funds for a home down payment, FHA Loans allow you to pay 100% of your down payment with gift funds. Gift funds can be sourced from your family, employer, an approved charity, or homebuyer program from the government.
It is possible to purchase a mixed-use property using an FHA Home Loan and its low down payment requirements, but if the home is not primarily used as a residence and has 50%, or more floor space taken up by non-residential use, it cannot qualify for an FHA mortgage.
Disqualifications include:
— Properties used as an investment or secondary purchase
— Homes that are a majority non-residential.
— A home value above an limits
