What are FHA Loans?
Started in 1934, FHA loans are one of the most popular loan types. Insured by the Federal Housing Administration (FHA), these loans typically have lower down payments and more flexible credit requirements than non-government-backed loans. Whether you are a first-time homebuyer or are looking to move to or invest in a new home, FHA loans may be just right for you. Contact Mark Johnson to gain clarity on if this is the right loan option to fit your unique situation and needs.
Highlights of an FHA loan:
- As low as 3.5% down payment allowed
- Down payment can be gifted from a relative, borrowed from an eligible 401K or provided through an approved state or local program
- Co-signers are allowed (but must be eligible borrowers)
- Seller can contribute up to 6% of the purchase price toward closing costs
Two types of mortgage insurance (MI) are required:
- Upfront MI – can be financed into the loan or paid in cash
- Annual MI – paid monthly as part of the mortgage payment
- Available only for financing a primary residence
- Minimum 620 credit score required for manually underwritten loans
- Minimum 580 credit score allowed with Automated Underwriting System Approve/Eligible*
- Loan limits may vary by State/County
*Not all borrowers with 580 credit scores will qualify.