FHA Loans

FHA loans are an attractive option, especially for first-time homeowners because it is insured by the Federal Housing Administration (FHA). Primarily, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments.Typically the borrower can be approved with 3.5% down vs 20% that is required on other loan programs.

Below are some helpful details:

  • Accommodates low down payment (3.5% of purchase price). All closing costs can be paid by lender
  • Down payment accepted from borrower’s own funds or approved gift source
  • Max DTI:
    •  55% for loans receiving Approve/Accept response (conventional loans are 45%)
    • (no maximum housing ratio)
    • 35%/45% for loans receiving Refer response
    • 31%/43% for loans with no credit score
  • Seller contributes 6%
  • Student loans debt off of income based payment plan