Purchasing a home using a FHA (Federal Housing Administration) loan
Are you a first-time homebuyer? Are you working to improve your credit ratings? Can’t afford a down payment of 20% or more? Need affordable housing? If one or more of these conditions fits your financial situation, a FHA (Federal Housing Administration) loan may be your best loan option.
These home loans offer low down payments, low closing costs, and easy credit qualifying. They are available with fixed- rate or adjustable-rate terms.
FHA loans have helped people buy homes since 1934 by insuring the loan, so lenders can offer better terms.
Advantages of FHA loans include:
- A good alternative if you have limited equity or money available for a down payment.
- You can receive up to 96.5% financing on some loans.
- A family member or employer may gift you with 100% of a down payment.
- Your seller can contribute up to 6% of sales price for closing costs and prepaid items.
FHA loans are available for:
- New homes—your down payment could be as low as 3.5% of purchase price.
- Existing homes.
- Refinancing your home.
- 1-4 unit properties.
FHA loan requirements
- There are strict inspection requirements because the agency expects the property to be livable from the first day.
- FHA maximum loan limits vary by county. Consult your loan officer to determine the maximum loan amount in your area of interest.
- FHA has limits for your debt-to-income ratio.
Debt-to-income ratio is the amount of income you make each month versus the amount of debt you pay monthly.
HomeTrust Bank lending experts can help you get pre-approved now!