The Benefits of Home FHA Loans
FHA Loans are a game-changer for first-time home buyers.
Low Down Payment
FHA loans offer buyers down payment requirements as low as 3.5% on their home mortgage.
You Don’t Need Perfect Credit
Have a credit score of 580 with a 3.5% down payment or a score as low as 500 with a 10% down payment minimum on your home.
Flexible Co-Signer Options
With an FHA loan, co-signers are not required to live in the home, giving home buyers more housing flexibility.
Various Down Payment Sources
Down payment sources like a gift or grant make FHA loans appeal to a broader group of home buyers.
Explore FHA Loans
If you’re ready to learn more about FHA loans, you’re in the right place! FHA loans are a flexible financing option for first-time and repeat home buyers. Explore our resources and start finding answers to your questions about FHA home loans.
All FHA Home Loan Resources
General
What are the benefits of an FHA loan?
FHA loans accept down payments as low as 3.5%. There’s also flexibility in the source of the mortgage down payment, allowing greater mortgage and payment flexibility. FHA allows higher qualifying debt to income ratios, co-signers that do not have to live in the home, seller assistance towards buyer closing costs, and more. You can work with your loan officer to determine the source of your mortgage and how it will impact your FHA loan rate.
Are FHA loans only for first-time buyers?
No, FHA loans can be used by repeat buyers. If you are buying a home for a second time, you are still eligible for mortgage FHA loans, mortgage insurance, and other FHA loan benefits.
How do FHA loans compare to conventional loans?
Conventional loans and FHA loans differ in a variety of ways including interest rates, mortgage insurance, credit score requirements, down payment requirements, etc. We have a great comparison guide that digs into the details here. The guide shows how FHA loans compare to conventional loans and will help you determine which loan is best for building your home equity.
How do FHA loans compare to VA loans?
The major differences between FHA and VA loans include eligibility, down payment requirements, and mortgage insurance requirements. Get an in-depth comparison of the VA and FHA loan programs here.
How does an FHA gift of equity work?
FHA loans allow the seller to give a “gift of equity” to cover the down payment for a buyer. This typically happens in scenarios where the seller is a friend, business associate, or family member of the buyer and wants to help a buyer with their mortgage, down payment, and building equity. The flexibility of the down payment is one way that Federal Housing Administration loans are different than loans from other lenders.
Can I use gifted funds to cover an FHA down payment?
You can use gifted funds to initiate buying your home and to cover the cost of a down payment on an FHA loan. Learn more about FHA gift fund guidelines here.
What is the max amount I can get with an FHA loan?
FHA loan limits determine the maximum amount of money that you can borrow using an FHA loan. The loan limits and rates update each year. Learn the current FHA loan limits and more here.
Can you refinance with an FHA loan?
Yes, you can refinance your home with an FHA loan. When you refinance your home, you can often lower your interest rates and your monthly housing payment. Learn more about FHA refinance options here. Discover the pros and cons of an FHA streamline refinance.
Can you refinance an FHA loan into a conventional loan?
Yes, you can refinance an FHA loan into a conventional loan. Learn more about this process here.
How does the FHA streamline refinance work?
The FHA streamline refinance program is designed to help current FHA borrowers refinance with ease. It doesn't require extensive income verification or underwriting. The need for an appraisal is also eliminated. Learn more about the FHA streamline refinance program.
Costs & Fees
How is down payment assistance used with an FHA loan?
Down payment assistance can be used to cover your down payment or closing costs with an FHA loan.
Can you put down more than 3.5% with an FHA loan?
Yes, 3.5% is the minimum down payment. You can always have a higher mortgage down payment with an FHA loan. Having a higher mortgage down payment can decrease your monthly payment or help you pay off your home mortgage faster.
Are there closing costs for FHA loans?
FHA closing costs are the standard expenses every buyer pays to cover the cost of taking out an FHA loan.
Closing costs will cover things like your home inspection, appraisal, title insurance, taxes, and more. Every transaction is different, but your closing costs will generally land between 2-6% of the purchase price.
Can I pay my own property taxes and insurance on an FHA loan?
No, the program does not allow you to pay your own property taxes and insurance on an FHA loan. Housing insurance and taxes will need to be paid through other methods. You can check out how you can pay your own taxes and insurance here.
Do you have to have mortgage insurance with an FHA loan?
Yes, while FHA loans do not require private mortgage insurance (PMI), you will have an insurance mortgage premium charged by FHA (aka, FHA mortgage insurance). The insurance cost is paid at closing.
Can PMI be removed from an FHA loan?
Yes, PMI can be removed from FHA loans. Learn more about PMI removal strategies here.
Can the seller pay closing costs when using an FHA loan?
Yes, the maximum seller-paid closing costs involving an FHA loan is 6% of the sales price. Learn more about seller-paid closing costs here.
Qualifications & Rules
Do I qualify for an FHA loan?
Start by filling out a Quickstart loan application. From there, one of our FHA loan experts or lenders reviews your application and will walk you through the loan process step by step. The lenders will determine the loan amount you qualify for and help you get the loans you need to purchase a home.
What are the occupancy requirements for an FHA loan?
FHA loans are for buyers that plan to live in their home as their primary residence. To protect the program, the Federal Housing Administration has two major occupancy requirements for buyers to meet. If you purchase a home with an FHA loan you must establish residency in your new home within 60 days, and plan to live in the home for the majority of the calendar year.
Do FHA loans have income limits?
No, There is no minimum or maximum when it comes to FHA income limits. We explain this, and what is required to qualify for an FHA loan here.
What are the FHA appraisal requirements?
We share the specifics on FHA appraisal requirements in this blog post.
Can I have two FHA loans at once?
The short answer is yes, you can have two loans at the same time. But there are rules and guidelines you will need to know in order to work with the lenders to get two FHA loans simultaneously.
Does FHA count student loans?
Yes, the FHA counts student loans. Learn the ins and outs of FHA guidelines for student loans here.
Can you get an FHA loan for a new construction home?
Yes, learn more about financing a new construction home here.
Can I build a house with an FHA loan?
Yes, you can build a house with an FHA loan. You can tackle a build with an FHA loan in two ways. You can purchase a newly built home from a builder with traditional FHA financing or use an FHA construction-to-permanent loan. Learn more about financing a new build with an FHA loan.
Can you flip a home and finance it with an FHA loan?
Yes, but specific FHA guidelines must be followed when you get a loan to finance a flipped house.
Can I finance a manufactured home with an FHA Loan?
Yes, manufactured homes can be financed with an FHA loan. FHA offers a specific loan product for this home type. Learn more.
Can you use an FHA loan for an investment property?
No, FHA requires that the buyer use the home as their primary housing. You can not use FHA loans for urban development, retirement, or other investment properties.
Can you rent out an FHA financed home?
Not technically, FHA loans are typically for primary residences only. However, there are special exceptions to this loan policy. Read about those here.
Can you use rental income to qualify for an FHA loan?
Yes, monthly rental income can be used to qualify for an FHA loan if the amount is enough to meet the minimum requirements. Learn more about FHA rental income guidelines here.
Can I have a co-borrower or co-signer on an FHA loan?
Yes, and the co-borrower does not have to live in the home with you. Learn more about non-occupant co-borrowers here.
How long do I need to wait before qualifying for an FHA loan after foreclosure?
Generally, the FHA foreclosure waiting period is three years. After the foreclosure period, you can be eligible for FHA loans.
How long do I need to wait before qualifying for an FHA loan after a short sale?
FHA requires that at least three years have passed from the date of the short sale through the FHA case file number. Although, it is possible to get loans and buy in less than three years. Learn more here.
What are the FHA seasoning requirements after bankruptcy?
The FHA bankruptcy waiting period is much shorter than you may think! Learn more here.
Can I get an FHA loan with bad credit?
FHA loans have above-average flexibility on credit score, but there are still certain minimum score standards that you have to meet to get a loan. Read more here. If you have had difficulty getting loans in the past due to a low credit score from credit cards or other factors, FHA loans could be a good option for you. If your credit isn't perfect, we can help put together a plan to raise your score!
Does FHA require all collections to be paid off before issuing loan approval?
While many home loan programs require collections to be paid off before getting approved for loans, FHA is pretty lenient when it comes to collections. It is still possible to qualify for a loan.
What do I need to know to qualify for an FHA loan in Florida?
Get familiar with the FHA loan program and how it applies in the sunshine state. Find out more about getting an FHA loan in Florida.
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Topics covered include:
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- Loan Process Do’s and Don’ts
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