FHA Mortgage Program
FHA stands for Federal Housing Administration. If you go to their website their stated goal is “to help stimulate the housing market by making home loans accessible and affordable.” Most think FHA mortgage programs are just for first time home buyers. FHA loans are for everyone that can qualify. You can be a first-time homebuyer, looking to do improvements as you buy a property, or a repeat home buyer.
FHA mortgage loans are a great program for a purchase because they offer quite a bit of flexibility.
- Lower fico scores. When compared to a conforming loan, FHA allows for a borrower to have lower fico scores. In certain circumstances individuals with a score below 600 may qualify.
- Higher debt ratios. Again, a conforming loan program will typically cap a borrower with a debt ratio or DTI (debt to Income Ratio) at 45%. FHA in certain circumstances will allow for DTI’s up to 55% and possibly higher. This allows for more purchasing power.
- Low down payment. Conforming loans offering the best terms usually need a borrower to put down 20% or more. FHA mortgage purchase programs have a 3.5% down payment requirement. This 3.5% can even come from a “gift” that is given by a close relative. Parents or siblings are the usual ones allowed to provide the gift.
- Non-Occupant Co Borrowers. This is great for those who do not have their credit or work history built up enough yet. A borrower can have a co-signer that will not be residing in the property. Many times, this is an immediate family member. This is a great feature for those in the professional world that are just starting out but will see their earnings increase in the coming years.
I have helped hundreds of people buy a home. My career in the mortgage business began in 1995 giving me 20+ years of experience. If you would like to see what you might qualify for I can be reached at 860-334-1354 or email at [email protected].