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Alabama FHA Loans

What is an Alabama FHA Loan?
FHA stands for Federal Housing Authority and an Alabama FHA Loan provides low-cost insured Home Mortgage Loans that suit a variety of options. Whether you're buying a home or want to refinance your mortgage, FHA loans might be right for you. If you're unsure about your credit rating, or have concerns about a down payment, FHA loans can give you piece of mind with super low closing costs and flexible payment options.


What factors determine if I am eligible for an FHA Loan in Alabama?
To be eligible for FHA Mortgage Loans in Alabama, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income. Your credit background will be fairly considered. You must be able to make a down payment, cover closing costs and have enough income to pay your monthly debt.

What is the maximum amount that I can borrow?
The maximum amount for an FHA Mortgage is determined by:

Maximum Loan Amount in Alabama: The maximum loan amount allowed for FHA mortgages varies from county to county in AL. The highest maximum FHA mortgage right now in Alabama is $285,000. The lowest maximum amount available in any county is $271,050. The lowest maximum amount available in any county is $271,050. To see what the limit is in the county in which you're interested, please refer to the Alabama FHA Loan Limit chart at the bottom of this page.

Maximum financing: In Alabama, the maximum FHA financing will be 97.75% of the appraised value of the home or its selling price, whichever is lower.

How much money will I need for the down payment and closing costs?
Alabama FHA loans require the home buyer to invest at least 3.5% of the sales price in cash for the down payment and closing costs. If the sales price is $100,000 for example, the home buyer must invest at least $3,500. However, the home buyer can use gifts from family, funds from local, state or government agencies, or other sources for the down payment.

What property types are allowed for FHA Loans in Alabama?
While FHA Guidelines do require that the property be Owner Occupied (OO), they do allow you to purchase condos, planned unit developments, manufactured homes, and 1-4 family residences, in which the borrower intends to occupy one part of the multi-unit residence.

More information on FHA Mortgages

What types of refinance programs does FHA offer in Alabama?
There are three main types of FHA Refinance loans available in Alabama.

FHA Rate/Term Refinance
The FHA Rate/Term Refinance is for borrowers who currently have a conventional fixed rate or ARM mortgage and wish to refinance into an FHA Mortgage. This program helps borrowers who wish to have a stable, fixed rate FHA Insured Loan.

Cash-Out Refinance
An FHA Cash Out Refinance is perfect for the homeowner who wants to access the equity that they have built up in their home. This program is beneficial to homeowners whose property has increased in value since it was purchased.


Streamline Refinance

The FHA Streamline Refinance is designed to lower the interest rate on a current FHA mortgage or convert a current FHA adjustable rate mortgage into a fixed rate. An FHA Streamline Refinance Loan can be performed quickly and easily. It requires much less hassle and paperwork than a normal refinance including no appraisal, no qualifying debt ratios and no income verification.

How much can I refinance in Alabama?
The maximum amount for an AL FHA loan is determined by:

Maximum Loan Amount in Alabama
The maximum loan amount allowed for FHA refinance mortgages varies from county to county in Alabama. The highest maximum FHA Home Refinance amount right now in Alabama is $285,000. The lowest maximum amount available in any county is $271,050. To see what the limit is in the county in which you're interested, please refer to the FHA Loan Limit chart at the bottom of this page.

Maximum financing: In Alabama, the maximum financing for an FHA Rate Term Refinance (No Cash-Out) or FHA Streamline Refinance Program (No Cash-Out) will be 97.75% of the appraised value of the home or its selling price, whichever is lower. The maximum financing for an FHA Cash-Out Refinance in Alabama is 85%.

What factors determine if I am eligible for an FHA Refinance Loan?
To meet FHA refinance loan requirements in Alabama, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income. Your credit background will be fairly considered. You must be able to make a down payment, cover closing costs and have enough income to pay your monthly debt.

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Alabama FHA Mortgage Limits by County
Updated 03/05/2008
County Name         
         Single Family
          Duplex
          Triplex
          Fourplex
AUTAUGA 271050 347000 419400 521250
MONTGOMERY, AL (MSA)
BALDWIN 285000 364850 441000 548050
DAPHNE-FAIRHOPE, AL (MICRO)
BARBOUR 271050 347000 419400 521250
EUFAULA, AL-GA (MICRO)
BIBB 271050 347000 419400 521250
BIRMINGHAM-HOOVER, AL (MSA)
BLOUNT 271050 347000 419400 521250
BIRMINGHAM-HOOVER, AL (MSA)
BULLOCK 271050 347000 419400 521250
NON-METRO
BUTLER 271050 347000 419400 521250
NON-METRO
CALHOUN 271050 347000 419400 521250
ANNISTON-OXFORD, AL (MSA)
CHAMBERS 271050 347000 419400 521250
VALLEY, AL (MICRO)
CHEROKEE 271050 347000 419400 521250
NON-METRO
CHILTON 271050 347000 419400 521250
BIRMINGHAM-HOOVER, AL (MSA)
CHOCTAW 271050 347000 419400 521250
NON-METRO
CLARKE 271050 347000 419400 521250
NON-METRO
CLAY 271050 347000 419400 521250
NON-METRO
CLEBURNE 271050 347000 419400 521250
NON-METRO
COFFEE 271050 347000 419400 521250
ENTERPRISE-OZARK, AL (MICRO)
COLBERT 271050 347000 419400 521250
FLORENCE-MUSCLE SHOALS, AL (MSA)
CONECUH 271050 347000 419400 521250
NON-METRO
COOSA 271050 347000 419400 521250
ALEXANDER CITY, AL (MICRO)
COVINGTON 271050 347000 419400 521250
NON-METRO
CRENSHAW 271050 347000 419400 521250
NON-METRO
CULLMAN 271050 347000 419400 521250
CULLMAN, AL (MICRO)
DALE 271050 347000 419400 521250
ENTERPRISE-OZARK, AL (MICRO)
DALLAS 271050 347000 419400 521250
SELMA, AL (MICRO)
DE KALB 271050 347000 419400 521250
FORT PAYNE, AL (MICRO)
ELMORE 271050 347000 419400 521250
MONTGOMERY, AL (MSA)
ESCAMBIA 271050 347000 419400 521250
NON-METRO
ETOWAH 271050 347000 419400 521250
GADSDEN, AL (MSA)
FAYETTE 271050 347000 419400 521250
NON-METRO
FRANKLIN 271050 347000 419400 521250
NON-METRO
GENEVA 271050 347000 419400 521250
DOTHAN, AL (MSA)
GREENE 271050 347000 419400 521250
TUSCALOOSA, AL (MSA)
HALE 271050 347000 419400 521250
TUSCALOOSA, AL (MSA)
HENRY 271050 347000 419400 521250
DOTHAN, AL (MSA)
HOUSTON 271050 347000 419400 521250
DOTHAN, AL (MSA)
JACKSON 271050 347000 419400 521250
SCOTTSBORO, AL (MICRO)
JEFFERSON 271050 347000 419400 521250
BIRMINGHAM-HOOVER, AL (MSA)
LAMAR 271050 347000 419400 521250
NON-METRO
LAUDERDALE 271050 347000 419400 521250
FLORENCE-MUSCLE SHOALS, AL (MSA)
LAWRENCE 271050 347000 419400 521250
DECATUR, AL (MSA)
LEE 271050 347000 419400 521250
AUBURN-OPELIKA, AL (MSA)
LIMESTONE 271050 347000 419400 521250
HUNTSVILLE, AL (MSA)
LOWNDES 271050 347000 419400 521250
MONTGOMERY, AL (MSA)
MACON 271050 347000 419400 521250
TUSKEGEE, AL (MICRO)
MADISON 271050 347000 419400 521250
HUNTSVILLE, AL (MSA)
MARENGO 271050 347000 419400 521250
NON-METRO
MARION 271050 347000 419400 521250
NON-METRO
MARSHALL 271050 347000 419400 521250
ALBERTVILLE, AL (MICRO)
MOBILE 271050 347000 419400 521250
MOBILE, AL (MSA)
MONROE 271050 347000 419400 521250
NON-METRO
MONTGOMERY 271050 347000 419400 521250
MONTGOMERY, AL (MSA)
MORGAN 271050 347000 419400 521250
DECATUR, AL (MSA)
PERRY 271050 347000 419400 521250
NON-METRO
PICKENS 271050 347000 419400 521250
NON-METRO
PIKE 271050 347000 419400 521250
TROY, AL (MICRO)
RANDOLPH 271050 347000 419400 521250
NON-METRO
RUSSELL 271050 347000 419400 521250
COLUMBUS, GA-AL (MSA)
SHELBY 271050 347000 419400 521250
BIRMINGHAM-HOOVER, AL (MSA)
ST. CLAIR 271050 347000 419400 521250
BIRMINGHAM-HOOVER, AL (MSA)
SUMTER 271050 347000 419400 521250
NON-METRO
TALLADEGA 271050 347000 419400 521250
TALLADEGA-SYLACAUGA, AL (MICRO)
TALLAPOOSA 271050 347000 419400 521250
ALEXANDER CITY, AL (MICRO)
TUSCALOOSA 271050 347000 419400 521250
TUSCALOOSA, AL (MSA)
WALKER 271050 347000 419400 521250
BIRMINGHAM-HOOVER, AL (MSA)
WASHINGTON 271050 347000 419400 521250
NON-METRO
WILCOX 271050 347000 419400 521250
NON-METRO
WINSTON 271050 347000 419400 521250
NON-METRO

FHA loans in Alabama's top cities:

Birmingham Alabama FHA Loans Montgomery Alabama FHA Loans Mobile Alabama FHA Loans
Huntsville Alabama FHA Loans Tuscaloosa Alabama FHA Loans Hoover Alabama FHA Loans
Dothan Alabama FHA Loans Decatur Alabama FHA Loans Auburn Alabama FHA Loans
Gadsden Alabama FHA Loans Florence Alabama FHA Loans Bessemer Alabama FHA Loans
Madison Alabama FHA Loans Prichard Alabama FHA Loans Phenix City Alabama FHA Loans
Homewood Alabama FHA Loans Vestavia Hills Alabama FHA Loans Prattsville Alabama FHA Loans
Anniston Alabama FHA Loans Opelika Alabama FHA Loans Centerpoint Alabama FHA Loans
                                                                                                                             

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 Why choose an FHA Home Loan?

  • Alabama FHA Loan Programs require a Low 3.5% down payment.
  • Non-occupant, co-borrower are permitted to qualify for an FHA Home Loan.
  • Alabama FHA Loan Income requirements use expanded qualifying ratios.
  • There are no prepayment penalties for FHA Mortgage Home Loans.
  • An Alabama FHA Loan is fully assumable.
  • FHA Mortgage Insurance has lower premiums.
  • FHA Loan Requirements allow for non-income qualifying, streamline refinance.
  • An FHA Home Mortgage is available in all areas of the country, provided a market exists for the property and the home meets HUD's minimum property standards.
  • An FHA Home Loan may be used to purchase or refinance a new or existing one to four family home in urban and rural areas, including manufactured homes on permanent foundations.
  • Alabama FHA Loan Terms are offered at periods of 15 or 30 years.


 FHA Refinance Programs

FHA Rate/Term Refinance
The FHA Rate/Term Refinance is for borrowers who currently have a conventional fixed rate or ARM mortgage and wish to refinance into an FHA Mortgage. This program helps borrowers who wish to have a stable, fixed rate FHA Insured Loan.

Cash-Out Refinance
An FHA Cash Out Refinance is perfect for the homeowner who wants to access the equity that they have built up in their home. This program is beneficial to homeowners whose property has increased in value since it was purchased.

FHA Streamline Refinance
The FHA Streamline Refinance is designed to lower the interest rate on a current FHA mortgage or convert a current FHA adjustable rate mortgage into a fixed rate. An FHA Streamline Refinance can be performed quickly and easily. It requires much less hassle and paperwork than a normal refinance including no appraisal, no qualifying debt ratios and no income verification.


 FHA Refinance Questions & Answers

What are the guidelines for an FHA Refinance?
If the borrower wishes to take cash out of the property, then the maximum financing amount is 85% of the appraised value, depending on the borrowers qualifications. If the borrower does not take cash out then the maximum financing will be either 98.75% or 97.75% of the appraised value of the home or the amount you are refinancing plus closing costs, whichever is lower.

Why should I consider refinancing into a FHA-insured mortgage?
FHA refinance mortgages do not come with prepayment penalties, have no teaser rates nor balloon payments. They are offered at market rate with terms up to 30 years and are fully amortized, meaning that you pay towards principal and interest every month.

What if I have a prepayment penalty and other refinancing costs and there isn’t enough equity in my home to refinance?
If you do not have sufficient equity in your home to add your prepayment penalty and/or other refinancing costs into your new HUD FHA Mortgage, then you should ask your lender to consider a second mortgage to pay the difference or a short payoff on your existing loan. Offering either of these options is at the discretion of the lender.

Does it matter that the value of my home is now less than what I still owe?
Not to The FHA, but your current lender will have to be willing to accept a short payoff on the existing loan OR to hold a second mortgage to make up the difference needed to pay off the existing mortgage and the home’s value.

Does it matter that the value of my home is now less than what I still owe?
Not to The FHA, but your current lender will have to be willing to accept a short payoff on the existing loan OR to hold a second mortgage to make up the difference needed to pay off the existing mortgage and the home’s value.

 What are the advantages of FHA Loans versus Conventional Loans?

FHA-insured loans offer many benefits and protections that you won't find in other loans including:

FHA Loans are Credit Flexible
FHA loans are not totally credit score driven. Instead, they are written in a way that provides the borrower the benefit of the doubt that there had been, at some point in their past, circumstances beyond their control, and as long as the borrower has recovered from those circumstances in a reasonable manner, they're generally going to be credit-eligible for an FHA refinance loan.

FHA Loans have Great Interest Rates and Low Monthly Mortgage Insurance
A distinct advantage of an FHA insured loan, as compared to a conforming loan, is great interest rates and lower monthly mortgage insurance (MI). Depending on the program, standard FHA loan interest rates are usually better than a conforming 30-Year Fixed loan.

FHA Loans Require a Less Home Equity or Cash
FHA refinance Loans have as low as a 3.5% cash or home equity requirement for refinance and the money can come from a family member, employer or charitable organization as a gift.

FHA Offers More Protection to Keep Your Home
The FHA has been around since 1934 and will continue to be here to protect you. Should you encounter hard times after buying your home, the FHA has many options to help you keep you in your home and avoid foreclosure.

Streamlined Refinance and Assumable Loans
One of the most important advantages of an FHA loan is the ability for the loan to be assumed. This gives the buyer a significant advantage in a high interest rate market. FHA loans are eligible for streamline refinance, a program HUD offers that allows the borrower to easily refinance the loan to reduce their interest rate and lower their monthly payment.




FHA Mortgage   |   FHA Refinance   |   FHA LOAN REQUIREMENTS   |   FHA MORTGAGE CALCULATOR   |   FHA MORTGAGE RATES

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