FHA Home Loans
What is an FHA Loan?
Designed by the Federal Housing Administration (FHA), the FHA loan was created to aid families who often cannot receive a conventional loan to buy their dream home. By lowering the barrier to entry, the FHA hopes to improve housing and provide adequate home financing systems and insurance to more people.
Benefits of an FHA Loan?
The primary benefit of the FHA loan is that it allows a greater number of people to enter the housing market due to easier credit qualifications, lower down payment, and greater leniency on debt-to-income ratio requirements.
FHA Loan Characteristics
Down Payment: The minimum required investment is 3.5%. A borrower may either use their own funds or gift funds to meet this down payment.
Loan Options: There are fixed rate or adjustable rate options in loan terms ranging from 10, 15, 20, 25, and 30 years based on your specific goals and needs.
Property/Residency Types: FHA loans allow for primary residences only for 1-4 unit dwellings. The property must meet FHA requirements imposed by The Department of Housing and Urban Development (HUD).
Mortgage Insurance: There is an upfront mortgage insurance premium (UFMIP) required on all FHA loans that is financed into the loan amount and a monthly mortgage insurance amount included in each payment.
Insured: FHA loans are government-backed by the Federal Housing Administration (FHA).
Ideal Candidates for an FHA Loan
Borrower: First-time homebuyers or repeat homebuyers that do not currently have another FHA loan.
Credit score: Minimum credit score is usually 620 (depending on the lender) but some lenders will allow for a score down to 580.
Next Steps to Getting a FHA Loan:
If you believe you are eligible for a FHA loan, the next step will be booking an appointment with Desert Canyon Mortgage to start the homebuying process. We recommend reviewing our homebuying timeline and pre-approval document checklist before making an appointment. Once complete, click HERE to start the loan application process.