FHA Loans

FHA loans are insured by the government just like VA loans.  This means that they allow low credit scores with the minimum down payment allowed; which is the undeniable advantage over conventional loans that require superior credit scores to secure low down payment options.  The minimum down payment for FHA loans is currently 3.5%; so on a $300,000 purchase price the minimum down payment is $10,500.  FHA PHOTOThis down payment can come in the form of a gift from a family member and is as simple as a gift letter that we provide to the family member to complete.  The minimum credit score to secure 3.5% down payment for FHA is 580.  We offer FHA loans below 580 credit(fico) scores but a 10% down payment is required with a 579 or below.  The other primary advantage to FHA loans are increased debt to income ratios.  Maximum conventional debt to income ratios range from 43%-45% for Fannie Mae and up to 50% for Freddie Mac.  FHA allows debt to income ratios up to 57%, which helps many borrowers qualify who have limited income or who might have excessive liabilities(example multiple car payments and student loans).  We also cater to FHA borrowers who have been turned down by Wells Fargo, Chase, Bank of America or their local mortgage company; all who have something called overlays that they add on top of FHA guidelines in order to protect themselves from risk.  For example a borrower might be turned down because they received REFER/ELLIGIBLE AUS DU findings.  Most lenders decline these borrowers but we have the ability to manually underwrite these loans, approve and fund them.  One of the great features of FHA financing is the FHA streamline refinance.  Non cash out refinances on the streamline program do not require income, appraisal or review of borrower’s liabilities on credit.  Hence the word “streamline”.  Many borrowers take advantage of lower market rates just 6 months after their initial purchase with an FHA loan.  Whether you are ready to buy now or would like to know how to be prepared to obtain an FHA loan, give us a call today!