The FHA loan is a government-backed mortgage that’s popular with first-time homebuyers — and repeat buyers with credit bumps in their financial history — because of its flexible qualifying requirements. If you have limited down payment savings and a lower credit score, you may find it easier to get approved for an FHA loan than a conventional loan.
This FHA mortgage could be the solution you’re looking for. It’s designed to help people just starting out or who may have been passed over by lenders in the past. This loan offers a fixed rate and allows you to choose how much down payment you contribute. Your advantage? The program is backed by an agency that promotes homeownership, giving you peace of mind and a low interest rate. Are you ready to take your first step toward buying a home?
What is an FHA loan?
An FHA loan is a mortgage that’s insured by the Federal Housing Administration (FHA), a government agency that follows lending rules set by the U.S. Department of Housing and Urban Development (HUD). You’ll pay two types of mortgage insurance to protect your FHA-approved lender against losses if you stop making mortgage payments.
You don’t have to be a first-time homebuyer to get an FHA loan, but you do have to live in the home you plan to buy as your primary residence for at least a year. Unlike many other first-time homebuyer programs, there are no income limits — which gives higher-income earners an additional home loan option if they don’t meet the minimum 620 credit score required for a conventional loan.
Some highlights that often appeal to homebuyers who choose an FHA loan include:
- Lower credit score requirements for low-down-payment loans than conventional mortgages
- The chance to qualify for a mortgage sooner after a bankruptcy or foreclosure than conventional loans allow
- More leniency than conventional loans permit to qualify with more debt compared to your income
FHA loan down payment
You’ll need some upfront money, which includes your down payment, to get an FHA loan. The minimum amount you need depends on your credit score:
- You’ll need a 3.5% down payment with a credit score of 580 or above.
- You’ll need a 10% down payment if your credit score is between 500 and 579.
The good news is, you don’t have to save up for the down payment yourself. You can get a gift from a friend or relative, check out down payment assistance (DPA) programs in your area or even sell an asset like a car to come up with the money.
Is a FHA loan right for you?
Whether you’re a first-time home buyer, a retiree downsizing, or moving to the perfect area – we’ll find the right mortgage option for you. We work with all of the top lenders, offering a variety of products with best in class service. This means that when you come in, there are hundreds of options available and maybe even something more specific than what we listed above – call us today!