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FHA LOANS

FHA loans are mortgages administered by the US Department of Housing and Urban Development and insured by the Federal Housing Administration (FHA). The insurance from the FHA protects the lender if a borrower defaults on the FHA loan. With this protection, lenders are able to provide loan options commonly not offered through conventional financing. Because of their low down payment requirements, FHA mortgages are often well suited for first-time home buyers.

For home buyers with limited funds for a down payment or a mediocre credit history, the FHA mortgage could provide the solution they need in home financing. Compared to conventional mortgages, FHA loans typically offer more flexible underwriting, more lenient debt to income requirements and looser conditions for past collection or pay off accounts. FHA loans typically are set with 30 year fixed rates.

First-time home buyers might be well-served with the FHA loan. For first-time home buyers, saving enough funds for a substantial down payment can be one of the most challenging parts of buying a home. Since FHA loans can offer lower down payment requirements and also allow home buyers to roll closing costs and other fees into the loan amount, these might be a wise mortgage option for first-time home buyers. FHA mortgages offer down payments as low as 3.5%, which can include the use of gift funds. FHA loans are the easiest type of real estate mortgage loan to qualify for. The FHA loan requirement guidelines for loan qualification are the most flexible of all mortgage loans that require less than 5% down payment.

Basic FHA Loan Requirements

Two Years of steady employment.
Last two years Income should be the same or increasing.
Credit report should typically have less than two thirty day lates in last two years with a minimum credit score of 580 or higher or in some cases no credit score at all.
Bankruptcy's must be at least two years old, with good credit since discharge. Foreclosure's must be at least three years old, with no 30 day lates credit since.