FHA Home Loans
A loan option typically used by first-time buyers because of its low downpayment and flexible qualifications but also a viable option for refinancers.
FHA loans are insured by the Federal Housing Administration, and with the government guarantee, lenders are more willing to lend with more lenient qualifying guidelines. FHA loans are specifically designed to help borrowers get into homes.
First-time buyers can often benefit from the more lax guidelines of an FHA loan, including a lower down payment. Typical downpayments can range between 10 and 20 percent, but with a FHA loan the down payment can be as low as 3.5%. This lower down-payment can even be provided to you from a family member as a gift fund.
With more lenient qualifying guidelines, FHA loans make homeownership more accessible to more people. Credit scores to 640, lower debt ratios, and seller contributions are all allowed with a FHA loan. A few ups and downs in your credit history may be okay with the FHA.
- Ideal for first-time buyers
- Lower down payments and gift funds allowed
- More flexible qualifying guidelines
- Available for purchase or refinance, fixed or adjustable rate
First-time buyers are not the only ones who can benefit from a government guaranteed loan. You can refinance with an FHA loan, even if you don’t currently have an FHA loan. FHA loans come with a few requirements. Because the program intends to help buyers get into a home, you must live in it as your primary residence. (Don’t worry investors, we have plenty of other loan programs that are perfect for you.) Flip properties are allowed, however, as long as it is owner occupied.
Some FHA programs will require you to have the home appraised by an FHA- approved appraiser, and for you to pay mortgage insurance premiums. Plan on paying Up Front Mortgage Insurance (UFMI) and a Monthly Mortgage Insurance Premium, unless you qualify for the FHA streamlined* finance program. Our Solano Mortgage expert loan advisors can tell you what you qualify for and what to expect for your total payments, including mortgage insurance.
* Qualifying factors may apply