With an FHA loan you may put as little as 3.5% as a downpayment on your home. First time homebuyers also have an opportunity to qualify for down payment assistance!

Federal Housing Administration (FHA) loans are a type of mortgage that is insured by the FHA, a part of the U.S. Department of Housing and Urban Development (HUD). FHA loans are designed to make homeownership more accessible, particularly for first-time homebuyers. Here are some key features of FHA loans:

1. Low Down Payment: One of the most attractive features of FHA loans is the relatively low down payment requirement. Borrowers may be eligible for an FHA loan with a down payment as low as 3.5% of the home’s purchase price.
2. Credit Score Flexibility: FHA loans are more lenient when it comes to credit score requirements compared to some conventional loans. Borrowers with less-than-perfect credit may still qualify for an FHA loan.
3. Fixed or Adjustable Rates: FHA loans offer both fixed-rate and adjustable-rate mortgage (ARM) options, providing borrowers with flexibility in choosing the type of interest rate that suits their preferences and financial situation.
4. Mortgage Insurance: FHA loans require both an upfront mortgage insurance premium (UFMIP) and annual mortgage insurance premiums (MIP). This insurance protects the lender in case the borrower defaults on the loan. The MIP can be paid monthly or financed into the loan.
5. Loan Limits: FHA loan limits are set by the government and vary by location. These limits determine the maximum loan amount that a borrower can obtain using an FHA loan. Higher-cost areas may have higher loan limits.
6. Seller Concessions: FHA loans allow sellers to contribute to the buyer’s closing costs, making it potentially more affordable for the borrower. The seller can contribute up to a certain percentage of the home’s sale price.
7. Assumable Loans: FHA loans are assumable, meaning that a borrower may be able to transfer the loan to a qualified buyer. This feature can be advantageous in a rising interest rate environment.
8. Streamlined Refinancing: FHA offers a streamline refinance program, known as the FHA Streamline Refinance, which simplifies the refinancing process for existing FHA borrowers. It typically involves less paperwork and may not require a new appraisal.
9. Flexible Qualification Criteria: FHA loans take into account various factors beyond credit scores, such as debt-to-income ratios. This flexibility can benefit borrowers who may not meet strict conventional loan requirements.