Posted by Home Point Financial on
A Federal Housing Administration Loan (FHA loan) is designed to help prospective homeowners who don’t qualify for conventional mortgages. With FHA loans, there is a much lower down payment required, and more lenient credit underwriting. In general, FHA loans are designed for low- and moderate-income families, and are a more flexible option than conventional loans.
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FHA loans are ideal for first time homebuyers and potential buyers in need of more flexible qualifying parameters than conventional loans offer. With FHA loans, the down payment minimum can be as low as 3.5%, credit scores under 620 can qualify and other qualifying flexibilities can help certain borrowers attain pre-approval, when other loan programs may be more stringent.
Not all homes are going to be FHA-eligible. There used to be a set price limit on FHA eligible homes in the U.S., however that has been lifted due to the varying average cost for a home city by city. To better serve high cost areas, such as San Francisco or New York for example, loan amounts can reach higher than $600,000 for a single-family home, while lower cost areas will have a lower threshold for the loan amount. These new requirements take cost of living into account to ensure homes are affordable depending on the area.
Everyone has a unique credit history, income, and wishes for their future home. The best way to determine if you are eligible for a mortgage, such as a FHA loan, is to get a quote. At Home Point Financial, we would be happy to help you on your journey towards homeownership. Give us a call at 888-616-6866 to get started!