Unlock Your Dream Home:
Affordable FHA Loans 11/06/2024

FHA Loans

Purchase

5.625% (6.5% APR)

FHA 30-Year Fixed Rate

Rate Reduction Streamline

5.625% (6.3% APR)

FHA 30-Year Fixed Rate

 *Scenario: loan amount of $482,500 680 FICO 96.5%LTV SFR Primary CA  11/06/24

FHA Loan

What is an FHA Loan?

Think you can’t afford a home because of a smaller down payment or less-than-perfect credit? FHA loans can help!

Unlike traditional loans, FHA loans are insured by the U.S. government. This makes it easier for lenders to approve you, even with a down payment as low as 3.5%.

FHA doesn’t directly issue loans. Instead, they partner with approved lenders like banks. You apply through a lender, and FHA insures the loan, protecting the lender if you can’t repay. You’ll pay a premium for this insurance, but it opens the door to homeownership.

Originally designed to help people with lower credit scores, FHA loans are now popular with a wider range of borrowers, especially:

  • First-time homebuyers
  • Those with moderate credit scores
  • People who haven’t saved a large down payment

FHA Loan Requirements: Know Before You Go

While FHA is known for being more flexible, a credit score of 580 or higher is ideal. They may accept a lower score (around 500) with a larger down payment (10% instead of 3.5%).

The minimum down payment is 3.5%, but a larger down payment can improve your chances of approval with a lower credit score.

You’ll need to show proof of steady income and employment history, typically through tax returns or paystubs for at least two years.

All FHA loans require mortgage insurance premiums (MIP). There’s a one-time upfront cost (around 1.75%) and a monthly premium that depends on your loan amount.

The loan must be for your primary residence, the home you’ll live in most of the time.

FHA allows a higher DTI than conventional loans, up to 57% in some cases. This means more of your income can go towards existing debts and still qualify for an FHA loan.

FHA Loan

While there are FHA loan variations, these are the main requirements to keep in mind.
Let's help you find the right FHA loan for your needs!