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The Federal Housing Agency (FHA) is an agency of the federal government that insures private loans that are issued for new and existing housing and loans that are approved for home repairs. Although the FHA doesn't actually make mortgage loans to homeowners, it provides insurance to protect lenders. In other words, your lender accepts less risk with an FHA loan because it's insured in the event that you default on your mortgage payments. The FHA is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934. By 2001, the nation's homeownership rate had soared to an all time high of 68.1 percent as of the third quarter that year. FHA and HUD have insured over 34 million home mortgages and 47,205 multifamily project mortgages since 1934. FHA currently has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio. In the more than 60 years since the FHA was created, much has changed and Americans are now arguably the best housed people in the world. HUD has helped greatly with that success. FHA loans offer many advantages to homeowners who qualify for these low-cost mortgages. Before applying for one, it helps to know what the requirements are, and how to improve your chances of getting approved without problems or delays.
*Although there is no minimum credit score to qualify for a FHA loan, most mortgage lender have outside investors who will set a minimum credit score typically around 530-580.
FHA Cash-out refinance loans on properties owned more than one year prior to the refinance are permitted on owner occupied principal residences only, and are limited to 95% of the appraised value plus the allowable closing costs. A FHA cash-out refinance loan is when a borrower refinance their current mortgage for more than they owe in order to pull out the built up equity that has accrued in the home. The amount a home owner can borrower is limited by the value of the property compared to the loan amount. Here are some basic requirements of a cash-out FHA refinance home loan: *The subject property must have been owned by the borrower as his or her principal residence for at least 6 months preceding the date of the loan application. *If the property is encumbered by a mortgage, the borrower must have made all of his/her mortgage payments within the month due for the previous 6 months, i.e., no payment may have been more than 30 days late and is current for the month due. *Applies to owner occupied properties only. *The property that is security for the refinance mortgage must be a 1- or 2-unit dwelling. *Loan amounts may not exceed the maximum loan limits for the area.
The most popular FHA home loan is the 203(b) also called FHA fixed-rate loan. The FHA Fixed-Rate Mortgage often works well for first-time homebuyers because it allows individuals to finance up to 97.75 percent of their home loan, which helps to keep payments low and closing costs to a minimum. The FHA Section 203(b) home loan is also the only loan in which 100 percent of the closing costs can be a gift from a relative, non-profit, or government agency. *All borrowers credit qualify. *Loan amounts may not exceed the maximum loan limits for the area. *Applies to owner occupied properties only. *Borrowers can finance up to 97.75% of their home loan. Because of the current "credit crisis" many banks and lenders are tightening their grips on the loans they approve and issue. This will make it very difficult for potential homebuyers to get approved for a loan. We are able to offer a solution to this problem. No matter what your credit score or situation is, contact us for a fast approval. *Even if you do not have a credit score, you are still eligible for a FHA mortgage and we can help you find the best program to suit your situation.
*FHA can lower your down payment *FHA can reduce your closing costs *FHA can limit and reduce lender fees *FHA mortgages are government insured *FHA allows gift and grant programs |
