FHA loan programs reflect the Federal Government's commitment to expanding homeownership and home buying opportunities through reduced down payment requirements, mortgage insurance charges, and relaxed underwriting standards when compared to conventional mortgage loans. I am including the FHA Primer here.
FHA loans recognize many areas as a high housing cost area and has increased the maximum FHA loans amounts. The FHA loans limits are as follows:
FHA loans high cost areas:
The FHA loan program is an outstanding choice for first time homebuyers because the program requires only 3% cash (which may be a gift) into the transaction and the FHA Loan guidelines are significantly more forgiving of past credit issues. We will look specifically at the last two years of your credit history. If there are some credit problems, we may be able to overcome them with sufficient explanations and supporting documents of why the issues occurred. Never rule yourself out of qualifying for FHA loan because of credit, prequalify and have me review your credit. I have more information on FHA credit requirements available
This FHA primer is focused on the using FHA programs to purchase a home. If your interest is in refinancing an existing FHA or VA loan please go to my mortgage refinance center. For extensive information on the FHA 203(k) program to remodel a home please see my renovation loans page.
There are some credit issues that we must allow for a certain time to pass before you can qualify for a FHA loan. They are follows:
FHA requires any outstanding collection accounts, judgments, charge off's be paid in full before closing. If you have had some credit difficulties in the past, FHA compensating factors can often get your loan approved.
If you currently have an FHA loan and are considering refinancing to lower your monthly housing cost there is a simple low cost " FHA streamline" refinance process which you should consider. One of the important features of the FHA program is that the loan is assumable should you sell in the future. If interest rates rise, an assumable mortgage may be the difference between being able to sell your home or not.Other FHA Loan Programs
FHA offers an adjustable rate mortgage which allows many people to buy a home with very low payments and down payment requirements. Useful if you have a debt to income issue or want to buy more home.
Streamline RefinanceThey have permitted streamline refinances on insured mortgages since the early 1980's. The basic requirements of a streamline refinance are:
Read more about FHA Closing Costs
I have included a page on how to calculate your qualification ratios.
I have included a page on FHA documentation guidelines.
Learn more about improving your credit scores
I have an article "Buying your home in 2008" by email explaining negotiating strategy in today's market.
As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your consumer and mortgage debt is structured today can have a life changing effect in the years to come. Read more about this free, no obligation service.
Prequalify for your FHA Loan.