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Financing a new home purchase or refinancing and existing home loan is possible with the FHA loan program. An FHA loan is a mortgage that is backed by the Federal Housing Administration or FHA. The FHA was established in the 1930’s to help make home financing more affordable and available to the American public. FHA loans typically offer lower interest rates than conventional loans and are generally easier to qualify for. FHA loan also offer many different options for those with less than stellar credit and first time homebuyers. An FHA loan may be the best route for you to take when seeking financing. Loans for homes, multi-family housing and new construction can be found with an FHA mortgage and may be available to you.

Benefits and Requirements
Conventional loans require a high credit score but with an FHA loan your credit score can be as low as 500 (FICO) and up. Other benefits include:

  • 3.5% down payment.
  • No minimum credit score requirements
  • A debt income ratio of 55% or more in certain instances
  • Up-front mortgage insurance is required with an FHA loan but it can be financed into the loan.
  • Mortgage insurance is required, with every payment, for the life of the loan.
  • There are no closing costs, and home refinances can be done with no appraisal, streamlined refinancing.
  • An FHA loan can be assumed by a new buyer
  • Those with credit scores between 500 -580 may purchase or refinance a home with the FHA loan program with a 10% down payment
  • Down payments and closing costs can be funded with monies that have been gifted to the buyer from a family member.
  • Refinancing for cash out/debt consolidation loans can be financed up to 85% of a home’s value.
  • An escrow account is required with an FHA loan program and is paid monthly with the mortgage.
  • A home financed through an FHA loan program must be owner occupied.

Types of Loans
Several types of FHA loan programs are available.

  • First time homebuyer loans can help, you get into a home with as little as 3.5% of the purchase price as down payment. These loans are available for 1-4 unit properties.
  • Those over 62 who own their homes outright or who have low balances on their mortgage may be eligible for a reverse mortgages through FHA reverse mortgage program. This will allow you to turn your equity into cash so that you can live more comfortably in your retirement years.
  • There are also FHA energy efficiency mortgages that are for energy efficiency upgrades to your house.
  • FHA loan program loans are available as fixed rate mortgages which keeps the payment at a set rate for the duration of the loan.
  • Adjustable rate mortgages are another option when seeking and FHA loan and are designed for low to moderate-income families who are transitioning in to home ownership for the first time.
  • FHA refinance loans are for those who want to transition from an adjustable rate mortgage or who find themselves in financial trouble and need a way to refinance in order to keep their current home.
  • A graduated payment mortgage through an FHA loan program is to help those who currently have moderate incomes but have the expectation that their income will improve of the next five to ten years. This type of loan helps a purchaser get into a home at a lower rate that increases along with their income.
  • An FHA loan is specific to those who would like to purchase a condominium is also available to those who qualify.

See if You Qualify, Today!
Buying a new home, refinancing an existing home or setting up a reverse mortgage is possible with an FHA loan program. If you meet the criteria, you may be eligible for an FHA loan. It may be easier for you to get that a conventional loan because, the requirements are not as restrictive. There are many different FHA loan programs, so let Interest Smart Home loans help you determine which option will be the best one for you.

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