FHA Loans

A home loan insured by the Federal Housing Administration (FHA). An FHA Loan is usually available at an attractive lower rate. It is open to all qualified borrowers. FHA Loans are underwritten through the standards established by the Federal Housing Administration and are fully insured by the Department of Housing and Urban Development (HUD).

In FHA loans, the FICO score is not evaluated, but a twelve month payment record can be established using non-traditional methods of payment (e.g. phone bill).

Regardless of the lending standards for FHA financing, the interest rates available may be comparable to those offered to conforming borrowers.

Why choose an FHA Mortgage?

The main advantage to an FHA home loan is that the credit criteria for a borrower are not as strict as conventional loans sold to Fannie Mae (FNMA) or Freddie Mac (FHLMC). Someone who may have had a few credit problems or no traditional credit may not have a problem obtaining FHA financing.

Also, FHA loans are assumable, allowing a person to take over the mortgage without the additional cost of obtaining a new loan. In addition, the lender must pay for part of the closing costs while a borrower's allowable costs can partially be wrapped into the loan. The monthly mortgage insurance premium is less expensive for an FHA loan verses a conventional loan with 3% down. Finally, FHA loans may require less income to qualify as they will exceed the conventional debt ratios of 28/36% as their standard is 29/41%.

Many people make the mistake and assume that FHA loans are only available for first time homebuyers. This is not true. FHA loans are available to anyone, whether it is your first or fifth home and also this loan can be used to purchase or refinance a home.

Find out if an FHA loan is right for you. Take a moment to fill out an application or call to speak with an experienced Loan Officer today.