Ever said to yourself ” I would buy that home if I had the money for a down payment.” Your not alone, and FHA has a great program to help individuals get into the home of their dreams. FHA loans have been around for many decades. I believe they originally came out in 1934. Basically, it’s a government program to help borrowers (post depression) get into home ownership. The big advantage to an FHA loan is it enables buyers to purchase a home with a low down payment. Around 3.5% of the purchase price! Great deal. Secondly, FHA allows buyers with past credit issues to purchase a home. The rules on this vary so contact your bank for specifics. Finally, it allows buyers to purchase a 2-4 family housing with a lower down payment as well.
There are many different types of FHA loans. Fixed rate loans can be any term from 5 to 30 years. Adjustable rate loans must be 30 years. They also can provided energy efficient loans, reverse mortgages, 203k renovation loans, and other special loan programs.
As with all loan programs the question of eligibility is important. FHA requires a minimum FICO score of 580 but most lenders will want to see 620 or higher. Also, past bankruptcy, judgments and liens, federal debts, collection accounts, all can impact your eligibility for any loan. Please contact your mortgage broker or banker for more specifics and your personal situation.