FHA Loans

The FHA Mortgage (Federal Housing Authority) is the traditional first time buyers program.

The federal government simply insures for the bank the mortgage against a default.

It is offered by virtually every bank – with big differences in who gets approved.

Example: many banks, such as Chase or in-house lenders for realtors will require that you have a 620 or 640 credit score, will have their own limits on how much you can borrow, and will not look at your extenuating circumstances.

It makes a difference with whom you apply. If your credit score is under 620, most banks will deny your loan.

I have closed FHA loans for homebuyers with credit scores as low as 517

Key data points

1. Qualify with Low Credit Score of 580: With a credit score of 580, qualify for a 3.5% down mortgage. Or 10% down if your score is under 580.

2. Easiest to Qualify: It is the easiest of all mortgages to get qualified.

3. More Purchasing Power: Has the highest debt to income ratio –you can borrow more per your income than other mortgages. Example: with a $45,000 salary, you are limited to @$200,000 on a conventional mortgage – but can go $285,000 on an FHA.

4. Seller Can Help: The seller can pay up to 6% of the purchase price for your closing costs.

5. Limits on Loan Size: The loan size is limited. Most of Florida it is $294,515. Exceptions range in the from: Jacksonville – $343,000, Naples – $450,000 and Miami – $345,000

6. Ideal for First Time Home Buyers: Most first time homebuyers start out with FHA loans and convert to a conventional loan in 5 to 9 years.

7. Ideal Recovering from Poor Credit: Ideal for those recovering from poor credit issues, such as bankruptcies, or divorces or prior foreclosures.

8. Mortgage Insurance Required: Contains Mortgage Insurance – will cost you $8 per month for every $10,000 you borrow.

9. Rehabs are Allowed: FHA Loans have other options including the 203K – Rehab – or handy man specials, which allow for and will pay for the repairs to existing homes

10. Some Homes Can Be Bought for $100: And, FHA Loans are also used on Foreclosed Homes – for $100 down. These are homes that have foreclosed and held by the federal government that you can you can purchase with $100 down.

For more info: write chris@chrisluis.com or call Chris @ 800-991-3268.

Chris Luis is known as the “FHA Czar.”