Due to their relatively low down payment and less strict underwriting guidelines compared to Conventional Loans, FHA mortgages are very popular loan product. But they are not for everyone. Here is some program information to make your loan decision a little easier.
|Minimum Down Payment||3.50%|
|Terms (Years)||30, 25, 20, 15 Fixed and Adjustable|
|Gift Funds Allowed||Yes|
|Eligible Homes||Single & Multi-Family, Manufactured, Condo|
|Seller Paid Closing Costs||Up to 6% of the Sales Price|
|Loan Limits||Varies by County (Shasta County $271,050)|
|MaxDTI||31/43% (Higher DTI’s May Be Allowed In Some Cases)|
|Minimum Credit Score||FHA None (Most Lenders Require 600+)|
|Availability||All US States, Owner Occupied|
*Other restrictions and guidelines apply. Please contact lender for full program details.
If you have mild credit issues, recent short-sales/ bankruptcies/or foreclosures, or you want a loan with a smaller down payment than other popular programs, an FHA Loan may be a good choice to buy your next home.
- Less cash up front.
- No income restrictions.
- Minimum Down Payment: 3.50% which can come from Immediate Family, Labor Union, Employer Group, Non Profit 501C3 and other approved sources.
- No minimum FICO requirements but most investors are holding to their own established minimum credit score corporate overlays.
- Can utilize other state, county and city programs, and Energy Efficient Mortgage options.
- Both Fixed-Rate and Adjustable-Rate loans permitted.
- Refinancing is allowed, at high loan to value ratios.
- No requirement for reserves.
- Maximum Seller Concession: 6%.
- Borrower can now pay previously non-allowable fees “processing, doc prep, underwriting, lender fees” *Except Tax Service fee.
- Non-Occupying co-borrowers allowed.
- FHA Loans are assumable.
- Up Front MI of: 1.75%, added to Loan.
- Monthly MI of: 1.25%.
- Maximum Loan Amount SFR: Loan amounts are set by counties. In many Northern California counties, the limit is $580,000. Loan amounts above $417,000 have additional costs and or rate increases. In the San Francisco Bay Area, FHA loan limits are as high as $729,750.
- Declining market is not observed by FHA.
- Roof & Pest inspections not mandatory unless noted by appraiser or called for in contract.
- Do not have to be a first-time buyer.
- Must be owner occupied.
- Non-traditional credit “telephone, PG&E, etc” allowed if there is no FICO available. Rates and fees are adjusted higher for these loans.
- FHA requires 90 days from date of trustee sale before purchase contract can be written unless REO is a federally chartered bank.