FHA Loans

FHA loans can be used for many different types of loans. Whether you are buying your first home or refinancing your current home the FHA program can help you.

Since 1934 The Federal Housing Administration has been helping people to become homeowners. The FHA is not a lender; they simply insure your loan so that lenders can offer you better rates.

Want more information now? Use one of our FHA mortgage consultants to learn how FHA financing can benefit you and get started now with FHA financing!

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Financing Your FHA Loan

Currently, FHA financing requires a 3% down payment minimum to obtain a home loan (purchase) and can go to 95% cash out on a refinance, although legislation changes are proposed that would result in a FHA modernization that would eliminate the requirement and raise home loan limits in high cost areas.

Click here to read more about the modernization process and where it stands.

FHA Home Loan Guarantee Program

FHA loans offer a loan guarantee for mortgage companies. If you acquire a FHA loan to purchase a home, the FHA is not actually lending money to you, the buyer; the FHA simply guarantees the lender in case you, the borrower, default on your mortgage payments.
You can pay as little as a 3% of the purchase price of your home for your down payment, and finance your closing costs with your mortgage loan. The FHA can guide you toward programs that require no down payment.
You can purchase manufactured homes and condominiums with a FHA loan.

FHA Loans and Credit Issues

FHA loans are a great way for individuals and families to purchase a home with no down payment and favorable mortgage loan terms. However, it is important to consider your credit history before you apply for a FHA loan. Before you can apply for a FHA loan, the FHA will examine your credit history for any obstacles that would cause you to be denied a loan.

Some of the credit requirements the FHA has for loan approval include:

To be eligible for a FHA loan you must have at least two lines of credit, such as rent history, or utility or cell phone bills. In some cases, the FHA may accept other forms of credit that do not appear on your credit history. If you do not have a credit history, it is to your benefit to establish some type of credit and make the payments on time. This will improve your credit score and show a history of timely payments that the FHA needs to approve you for a loan.
If you have a history of late payments, the FHA may overlook them. To qualify for a FHA loan you must have an overall on-time payment history. The FHA understands that sometimes financial difficulties occur and may overlook a period of late payments on your credit history as long as your overall payment history is consistent.
In most cases you can not get a FHA loan if you have had a foreclosure within the last three years. The FHA will look at the circumstances surrounding the foreclosure and then decide if you are eligible for a loan.
If you have any delinquent federal debt such as student loans or tax liens, you are not eligible for a FHA loan.
If you have judgments against you, you still may be eligible for a FHA loan if the judgments are paid before closing.
If you have items that are in collections, you still may still be eligible for a FHA loan if your credit history meets FHA requirements.
If you have filed for a Chapter 7 bankruptcy, you still may qualify for a FHA loan if the bankruptcy has been discharged for a minimum of two years, you have stable employment, and you have re-established good credit. If you are married, these conditions also apply to your spouse.
If you have filed for a Chapter 13 bankruptcy, you must have made your payments on time and adhered to a payment plan for at least one full year to qualify for a FHA loan. You must re-establish your credit and be in good standing. You must also have a stable job and be able to make the payments on the amount of the loan for which you apply. You will also need written approval from the bankruptcy court trustee, and you must submit a written explanation of why the bankruptcy occurred with your loan application.