FHA

FHA loans are the best option for homebuyers with a smaller down payment (unless they qualify for a VA loan).  With down payments as low as 3.5% and loan limits as much as $729,750  , this is the most common form of financing for first time homebuyers.

Unlike conventional loans, FHA are insured by the Federal Housing Administration, a government agency.  This allows for uniformity when it comes to mortgage insurance.  The underwriting guidelines are written to match what FHA will insure.  This limits the amount of last minute surprises.

Minimum Credit Scores:

The minimum credit score for FHA loans is 620.  If the borrower has no credit score, then “alternative” credit can be used such as: rental payments, utilities, installment accounts, and revolving accounts.

Seller Paid Closing Costs:

If negotiated, closing costs can be paid by the seller with a maximum of 6% of the sales amount.  This can only be used for closing costs.  Prepaid interest, property taxes, and insurance must be paid by the buyer.

Gifted Down Payment:

The 3.5% down payment can be a gift from a from a source such as: a family member, close friend, borrower’s employer or labor union.  When a gift is involved, proper documentation is involved.  Please don’t except any gifted funds until we speak and work out the proper documentation.

Non-Occupying Co-Borrowers:

A co-borrower that will not live in the property, but assists the buyer in qualifying is allowed.  The co-borrower must be a family member or long standing friend.  Like the primary borrower, the co-borrower must sign the loan documents, and is liable for the loan itself.

For more details on we can pre-qualify and assist you with your financing, please fill out the contact on the right, or you can call or email me.  I look forward to speaking with you!

If you would like to read more on FHA’s guidelines, you can also visit: http://hud.gov