FHA Mortgage Loans | FHA Home Mortgages

FHA Mortgage Loans

What are the advantages of FHA Mortgage versus Conventional Loans?
FHA mortgage loans offer many benefits and protections that you won't find in other loans including:

FHA Mortgages are Flexible
FHA mortgage loan requirements aren't completely score driven, though you will need a 640 FICO score or above to be approved through most lenders. FHA mortgage guidelines are more flexible than other loan programs, but there are still a few basic requirements that have to be met such as no late housing payments in the last year.

FHA Mortgages have Low Interest Rates and Low Mortgage Insurance
FHA Mortgage interest rates are usually better than other loan programs and they carry very low mortgage insurance costs.

FHA Mortgages Require a Smaller Down Payment
FHA Mortgages have a low 3.5% down payment and the money can come from a family member, employer or charitable organization as a gift. Other loan programs don't allow this.

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.

What factors determine if I am eligible for an FHA Loan?
To be eligible for an FHA Mortgage Loan, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (31% ratio). Your credit background will be fairly considered. At least a 640 FICO credit score is required to obtain an FHA approval through ENG Lending. You must also have enough income to pay your housing costs plus all additional monthly debt (43% ratio). These ratios can be exceeded somewhat with compensating factors.

See more on FHA Mortgage Requirements.

What is the maximum amount that I can borrow?

The maximum amount for an FHA home loan is determined by:

Maximum Loan Amount: The maximum loan amount allowed for an FHA Mortgage varies from county to county. The highest maximum FHA Mortgage right now is $729,750. The lowest maximum FHA Mortgage amount available in any county is $271,050. To see what the limit is in the county in which you're interested, visit the following site https://entp.hud.gov/idapp/html/hicostlook.cfm. This site lists U.S. territories as well as states.

Maximum financing: Depending on the state where the property is located, the maximum FHA Mortgage amount 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?
FHA Mortgage 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.

Can I get an FHA Mortgage after bankruptcy?

Criteria for FHA loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for two years or more, you are eligible to apply for an FHA mortgage. If you are in a Chapter 13 bankruptcy and have made all court approved payments on time and as agreed for at least one year, you are also eligible to make an FHA loan application.

Additional offers from other lenders.

Why choose an FHA Mortgage?

FHA Mortgage Loans require a low 3.5% down payment.
Non-occupant, co-borrower are permitted by FHA Mortgage Requirements.
FHA Mortgage Guidelines guidelines use expanded qualifying ratios.
There are no pre-payment penalty requirement for an FHA Home Mortgage.
FHA Mortgage Programs carry low fixed interest rates.
An FHA Mortgage Home Loan has lower MI premiums.
An FHA Mortgage is eligible for non-credit qualifying, streamline refinance.
An FHA Insured Mortgage is available all areas of the country, provided a market exists for the property and the home meets HUD's minimum property standards and the price is below the FHA Mortgage Limit for that area.
You can get a HUD FHA Mortgage to purchase or refinance a new or existing one to four family home in urban and rural areas.
FHA Mortgage Financing Fixed-Rate Loans are offered at terms of 15 or 30 years.

FHA Mortgage FAQ's

What is an FHA Loan?
An FHA loan provides low-cost insured home mortgage loans that suit a variety of purchasing and refinancing options.

What are FHA Loan Limits?
Today's maximum FHA Loan Limits are determined by the area where the subject property is located.

How can I qualify for an FHA Loan?
You must obtain correct FHA Mortgage Information to determine if you could qualify for today's FHA Mortgage Insurance guidelines. Certain FHA Loan Credit Score and FHA Mortgage Income guidelines must be met.

What are current FHA Mortgage Fees?
The FHA has a list of allowed fees that can be charged to the borrower on FHA Loans. These fees are referred to as allowable closing costs, and can vary from lender to lender. The FHA Loan MIP (Mortgage Insurance Premium) amounts to 1.75% of the loan amount and in usually financed in the mortgage.

Do FHA Loans have Mortgage Insurance?
FHA Loans have Monthly Mortgage Insurance on loans with a term of greater than 15 years and a loan-to-value ratio of 90% or greater (meaning you are borrowing more than 90% of the value of the home). FHA Mortgage Insurance (MI) is not considered FHA Loan PMI, because it is not provided by a private mortgage insurance company like on Conventional Loans. When comparing the monthly mortgage insurance rates on an FHA Mortgage vs Conventional Mortgage PMI, the FHA MI Rates are usually better.