FHA
Loans
What are FHA Loans?
An FHA loan is a mortgage insured by the U.S. Federal Housing Administration. Designed to help more people become homeowners, it offers more forgiving credit standards and lower down payment requirements than many conventional or non-government-backed loans.
FHA Loan Guidelines
-
As low as 3.5 percent 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 580 credit score required with Automated Underwriting System (AUS) approval. AUS is an automated program lenders use to qualify borrowers based on FHA guidelines
-
Loan limits may vary by State/County
Is a FHA Right For You?
FHA loans are a great option if you have limited savings for a down payment, less-than-perfect credit, or need help with closing costs. They’re designed for buyers planning to make the home their primary residence.