FHA Loans:

An FHA loan is a government-backed mortgage insured by the Federal Housing Administration, designed to make homeownership more accessible, especially for first-time buyers with lower credit scores or limited savings. These loans feature low 3.5% down payments, flexible income requirements, and require mandatory upfront and annual mortgage insurance premiums.

Key Features of FHA Loans

• • Low Down Payment: Minimum of 3.5% down, which can be gifted by family members or other approved sources.
  • Flexible Credit Score: Borrowers with a FICO score of 580 or higher can qualify for the minimum down payment. Those with scores between 500-579 may still qualify with a 10% down payment.
  • Mortgage Insurance (MIP): FHA loans require an upfront premium (usually 1.75% of the loan amount) and annual premiums (0.45% to 1.05% of the loan balance), usually paid for the life of the loan.
  • High DTI Limits: Borrowers can often qualify with higher debt-to-income (DTI) ratios.

Requirements and Eligibility

• • Property Type: The loan must be used for a primary residence, including 1-4 unit family homes, condos, or manufactured housing.
  • Employment: Proof of steady employment and a valid Social Security Number are required.
  • Loan Limits: Maximum loan amounts vary by county and are set by HUD based on local housing costs