FHA Loans – Still Working When Others Might Not

FHA Loans – Still Working When Others Might Not

Here are a few of the benefits that FHA loans offer.

 Low Down Payments – As little as 3.5% down will work in most                            instances and 5% covers most others.

 Flexible Credit Requirements – While it varies, minimum credit score requirements   can be lower than comparable conforming loan programs.

 Higher Loan Amounts – Can still be available in some areas using FHA loans vs. conventional loan options.

 Streamlined and Cash Out Refinancing – Subsequent refinancing can be far easier and more lenient than with conventional loans.

 Purchase and Rehab Financing – The FHA 203K loan can be a great option for the purchase of homes in need of anything from a quick spruce up to major remodeling when you don’t have sufficient funds to do it on your own.

 Higher Debt to Income Ratios – FHA typically allows for higher debt to income ratios than conventional loans. This helps increase your buying power and is sometimes needed depending on the situation.

 Non-Occupant Co-Signers – FHA allows a family member who is not going to occupy the property to co-sign for the home loan. This is not allowed on conventional loans.

 Gift Funds Are Allowed – FHA does allow for family members to gift all or part of the down payment. Conventional will only allow a gift as long as the borrower is also contributing 5% of their own funds.

 Local State and County Grant Programs – Most local State and County down payment assistance programs follow FHA guidelines since FHA allows for such programs.

The FHA program continues to go through changes and has become more expensive via both the upfront and ongoing mortgage insurance costs. This does make them less advantageous than they’ve been in the past.

However, this is not the case if your needs and situation preclude you from qualifying for a conventional loan.You can’t fairly compare something that’s not available to something that is and this exactly is where the FHA program can serve as a failsafe when others would not. 

We’ll always assess the situation, educate you on the options that are available and help guide you as needed to the financing that’s best suited to your needs. Reach out anytime and together, we can explore the benefits and whether or not they are right for you.