FHA
- An FHA mortgage is a home loan insured by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD).
- FHA loans require a minimum down payment of 3.5% of the purchase price.
- Borrowers with a credit score of 580 or higher may be eligible for an FHA loan with a lower down payment requirement.
- FHA loans have flexible underwriting standards, making them accessible to borrowers with less-than-perfect credit.
- FHA loans require upfront and ongoing mortgage insurance premiums (MIP), which protect the lender in case the borrower defaults on the loan.
- The MIP can be paid upfront or added to the loan balance.
- FHA loans have maximum loan limits that vary by location and are adjusted annually.
- FHA loans can be used to purchase a primary residence or refinance an existing FHA loan.
- FHA loans have fixed or adjustable interest rates, and terms typically range from 15 to 30 years.
- The property being purchased with an FHA loan must meet certain minimum property standards set by HUD.
- Borrowers may be able to use gift funds or grants from a government agency or nonprofit organization to help with the down payment or closing costs.
- FHA loans can be assumable, meaning that a future buyer can take over the remaining balance of the loan.
- Borrowers can use an FHA 203(k) loan to finance the purchase and renovation of a home in one transaction.
Requirements
Down Payment: 3.5% of the final loan amount
Terms: 10, 15, 20, 25, 30 years, fixed and ARM
Credit Score: 500* minimum
Mortgage Insurance: Yes, one-time, up-front and monthly
Maximum Loan Limit: Yes, varies by county
* Under 580 requires 10% down payment
TERMS: 30 AND 15 YEAR, FIXED
Down Payment: None
Credit Score: 640 minimum
Mortgage Insurance: Yes
*Closing costs and fees may still apply.
