When you are deciding which loan is best for you, there is a lot to consider. If you are looking to finance a primary residence, FHA is a great option to look into as these loans are designed to make homeownership more attainable and are often great products for first time home buyers or buyers that do not have a large sum saved for a down payment.
When considering all costs, buyers that finance with an FHA Loan will need to pay what's termed an Upfront Mortgage Insurance Premium (UFMIP) as well as a monthly Mortgage Insurance Premium (MIP) which is wrapped into the monthly loan payment. This insurance allows lenders to offer home loans to borrowers who may have limited credit or employment histories.
Almost anybody can get an FHA loan. There are no income limits. However, there are limits on how much you can borrow. In general, you're limited to median home prices in your area. To find the limits in your region, visit HUD's Website. To qualify for an FHA loan, you'll need to have reasonable debt to income ratios. FHA loans allow people to buy a home with as little as 3.5% down with credit scores as low as 580. With a 10% down payment FHA can go as low as a 500 credit score.
FHA also offers streamline refinance options. If you have an existing loan and rates go down, FHA offers the option to refinance without the need for credit, income documentation or an appraisal.
Credit Scores as low as 500
Down Payment as low as 3.5%
Manufactured Housing Ok
Non-Occupant Co-borrower OK
Gift Funds Okay
Closing Costs Assistance-up to 6% Seller Concessions
Non-Traditional Credit OK
One Time Close Construction Loans Available
203(K) Renovation Loan Available
$100 down HUD Owned Program Available