- FHA loans can be both fixed and adjustable rates.
- FHA hands down offers the greatest credit and underwriting flexibility of almost all of the mortgage programs available.
- Purchase loans require only 3.5% as a down payment.
- The maximum loan to value on an FHA refinance is 97.75%.
- Requires an upfront MIP (mortgage insurance premium) of 1.75% of the base loan amount.
- FHA also requires monthly mortgage insurance to offset the risk HUD takes is willing to accept for a lower down payment.
- Great loans for people with < a 620 middle credit score.
- FHA offers 10, 15, 20, 25 and 30 year terms; in addition, odd loan terms (12, 16,24 years for example) are acceptable.
FHA is part of HUD also known as Housing Urban Development. Some key features of FHA loans include:
- Purchasing a home with limited resources. For example, a person that has access to un-borrowed funds of $5,250 could buy a home with a $150,000 purchase price.
- Another benefit of a FHA loan is that it is ideal for a 1st time home buyer with low to moderate income.
- A final advantage of the FHA Purchase loan is the allowance of lower credit scores. Unlike most other non-government loan programs, you only need a 580 middle credit score to qualify for a standard FHA purchase loan. Residential Mortgage Solutions is considered a “Full Eagle lending institution” for FHA, which means that we have 100% full delegation authority to underwrite and deliver loans directly to HUD. In 2016 alone, Residential Mortgage Solutions delivered almost $100 millions of these government backed loans to HUD. I’d say “yes” that makes us an expert when it comes to FHA loans. Talk to one of our expert Mortgage Loan Originators today to see if this loan product is right for you.