FHA

The FHA loan has liberal qualification requirements, including lower credit scores and higher debt-to-income ratios. FHA is great for borrowers with non-traditional credit like self-employed borrowers. FHA has no income limit and has no geographic restrictions, typically has a lower down payment, lower monthly insurance premiums and often lower closing costs. The FHA loan is perfect for first time home buyers and families with low to moderate income levels. FHA loans can be used to buy an existing home, build a new one as well as refinance your home into a FHA mortgage.

Those interested in FHA loans may also be interested in USDA RD Loans which require no down payment.

  • Lower credit scores allowed
  • Down payment can be a gift from acceptable sources
  • 3.5% down payment
  • Mortgage Insurance: Upfront MIP of 1.75% added to the loan, monthly premium = loan amount x .85% / 12 mo.
    Mortgage insurance lasts for the life of the loan unless it is a 15 year term
  • Seller can contribute up to 6% of sales price towards closing costs & escrows
  • Non-occupying co-borrower allowed
  • Loan can be assumed (formal)
  • Chapter 7 bankruptcy discharged for 2 yrs w/ re-established credit and no lates
    3 years if home was included in BK