5 Things Every Home Buyer Must Know About FHA Loans

  • June 28, 2017 /

“Five things every home buyer must know about FHA home loans”

1. No Location Limits. The FHA loan places no geographic
limit on where you live. Condos need to be FHA certified,
and not all are.

2. No income limits. The FHA loan has no limit on your
income to qualify. Many programs will not qualify you if you
make too MUCH money…FHA loans are open to billionaires
if they wanted to use the program (Bill Gates, want an FHA

3. Less than perfect credit ok. The FHA loan is a very
flexible program that will work with less than perfect credit,
down to 600 score or even lower. If you have had a
bankruptcy, you will normally need to have 2 years past
since your discharge date (if Chapter 7) or 1 year past your
confirmation date (if you are Chapter 13). 3 years need to
have past since any foreclosure. Collections may not need
to be paid off.

4. Cash required. FHA does require 3.5% down payment
(however that down payment can be gifted to you by your
family or work). Right now seller can pay 6% of your closing
costs; that soon may be reduced to 3%. If that law is
changed, you may need to have more cash in order to use
this program.

5. Mortgage insurance. You will pay mortgage insurance
with this program, You pay a premium at closing: currently
this is 1% of the loan amount. However they will let you add
this to your loan balance and that’s what just about 100% of
the people using this program do. You also pay a monthly
premium in your mortgage payment, and that premium is
due to rise here in the next few months. Right now its .90%.

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