FHA Loans

It is a lending program administered by the Federal Housing Administration, under the auspices of the Department of Housing and Urban Development. This program is designed for home buyers that might not meet the more restrictive requirements of conventional financing.
FHA allows the borrower to get the funds necessary to close from several sources. They include such areas as personal savings, gifts, grants, loans from retirement accounts and seller contributions.

What are the benefits of obtaining an FHA mortgage loan

• Buy California homes with as little as 3.5% down!
• Down payment & closing costs may come from a gift or grant.
• Derogatory Credit and lower than average FICO scores are acceptable.
• A co-applicant can help you qualify even if they do not live in the home.
• Interest rates are typically lower.
• Higher debt to income ratios allowed.
• No prepayment penalty if you pay the loan off early.
• Sellers can give up to 3% in closing costs to help the buyer.

FHA Qualifications

• Proven employment status of at least 2 years.
• Steady or increasing income over a 2 year period.
• History of on-time payment. No more than two missed payments on your credit.
• If you have filed for bankruptcy you must wait at least 2 years and have good credit since you filed.
• Those with foreclosures must wait at least 3 years since the most recent foreclosure.
• FHA loans are subject to Mortgage Insurance Premium, payable both upfront and every month. MIP is sometimes referred to as PMI.
• You must pay a minimum of a 3.5% down-payment.

FHA loans are intended to help prospective home owners who do not qualify in the mainstream mortgage market. If you are thinking about obtaining FHA Loans or have additional questions about what loan products you may qualify for, you can reach us here, by phone at (805) 371-0431, or by email at ratelock@paylessloansource.com