It’s a common misconception that no affordable means of obtaining a home exists! However, the Federal Housing Administration (FHA) offers FHA loans which are an excellent option for a first-time homebuyer looking for an affordable loan.
Several FHA loan options are available to qualifying borrowers who may not have the option of a conventional loan. per the United States Department of Housing and Urban Development (HUD), requirements are less rigid for FHA loans, enabling borrowers with a smaller budget with limited funds for a down payment.
An FHA loan may be right for buyers with a low credit score, less money for a down payment, or buyers with a higher debt-to-income ratio (DTI). Down payments for FHA loans are as low as 3.5%, with a maximum loan limit of $420,680 in the majority of the country.
Applicant requirements include:
- No bankruptcies, with some exceptions within the last three years
- No foreclosures, short sales, or deeds-in-lieu with some exception, respectively, within the last three years
- 1.75% up-front Mortgage Insurance Premium at origination
- Annual Mortgage Insurance Premium, regardless of loan-to-value
- Applicant’s subject property must be a primary residence and cannot be used for secondary or rental properties.
Additional programs are available for FHA loan applicants, including down payment & closing cost assistance, FHA payment reduction program with no closing costs, and FHA cash-out refinancing of up to 85% of your home’s value.
V.I.P. Mortgage, Inc. loan officers can help you determine if you meet the requirements for an FHA loan. Contact us today, and we will have a loan officer get in touch with you.