FHA Loans

FHA loans have returned to the lending market as a smart option for home financing for first-time home buyers and those with less than perfect credit. FHA Loans are often a better option if you have a fair to good credit rating and are looking for a low down payment.

Generally, FHA standards are less strict when it comes to mortgage insurance, and while you may not qualify for conventional financing, an FHA Loan is your key to home ownership.

With an FHA Loan you can:

» Purchase a Home
» Remodel Your Home
» Make Home Repairs
» Make Energy-Efficient Improvements

FHA Loans are guaranteed loans, which means that lenders will offer you lower, more affordable rates. Even if you have less than perfect credit or are a first time home buyer, an FHA Loan can help you save money on the home of your dreams.

  • The FHA now offers a variety of loan programs with both fixed and adjustable interest rates. Many find FHA home loans attractive because they require very small down payments, gifts can be used for down payments and closing costs, and because the FHA regulates the closing costs. These loans also have qualifications that are easier to meet than traditional mortgages. The FHA does not require a minimum FICO credit score to meet qualifications and these programs will allow home purchase two years after a bankruptcy filing.
  • Energy Efficient Mortgages, EEMs, recognize that reduced utility expenses can permit a homeowner to pay a higher mortgage to cover the cost of the energy improvements on top of the approved mortgage. FHA EEMs provide mortgage insurance for a homeowner who is purchasing or refinancing a principal residence and incorporates the cost of energy-efficient improvements into the mortgage. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, or savings and loan association, and the mortgage is insured by the United States Department of Housing and Urban Development (HUD). FHA insures loans, they do not provide loans.
  • Section 203(k) insurance enables homebuyers and homeowners to finance both, the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage, or to finance the rehabilitation of their existing home. FHA approved lending institutions, which include many banks, savings and loan associations and mortgage companies, can make loans covered by Section 203(k) insurance.
    • FHA has permitted streamline refinances on insured mortgages since the early 1980's. The "streamline" refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:
      • The mortgage to be refinanced must already be FHA insured. 
      • The mortgage to be refinanced should be current (not delinquent).  
      • The refinance is to result in a lowering of the borrower's monthly principal and interest payments. 
      • No cash may be taken out on mortgages refinanced using the streamline refinance process.  
 
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