FHA offers 1st time homebuyer loans to consumers with limited or poor credit while providing competitive interest rates and fixed rate terms. As you may have read in the news, FHA has become the most common type of financing for new homebuyers. FHA requires income documentation and home buyers need to come up with 3.5% of the purchase price. FHA does allow gift funds, so there is no seasoning for the down-payment. Realtors and house sellers trust the Federal Housing Administration for coming through to insure first time buyers, because they have been doing it for over eight decades.
Limited and Bad Credit Borrowers Have New Opportunity with FHA
There are many reasons why FHA home mortgages are being recommended by realtors, broker, loan officers and accountants. They are popular with first-time home buyers because they are offering more benefits than traditional and subprime loans. They require less money down and the rates are competitive with prime loans backed by Fannie Mae or Freddie Mac. Don't forget that FHA offers a streamline loan that allows existing FHA customers to refinance into a better mortgage if market conditions improve and interest rates drop. This streamline option all but guarantees first time home buyers that FHA is the best financing tool available tool. American consumers trust FHA because they have always put people before products and that goes a long way in today's fast paced society.
According to National Mortgage News, officials from the Department of Housing and Urban Development agreed to increase down-payment requirements on jumbo loan amounts. In some cases FHA lenders will request a 5% down-payment on higher balance purchase loans that exceed the conforming loan limit. This will not however affect most of the market because most people are seeking first time homebuyer loans with a 3.5% down-payment.
Home Loans for People with Bad Credit Are Possible with FHA
HUD has kept the minimum fico score of 500 available for applicants with challenges seeking first time home buyer loans for bad credit. House buying can be complex if you have a poor credit rating, but the Federal Housing Administration has sought to alleviate some of the obstacles to stimulate home buying in the United States again. If you are looking to purchase a house again but you are on the side-lines because of a recent foreclosure or short sale, we have some good news. FHA recently announced that they would be cutting the length of time required for homeowners with poor credit ratings such as a bankruptcy, deed-in-lieu of foreclosure or a short sale.
FHA mortgage rates displayed are subject to change available loan information can provided by the mortgage lenders directly after application is submitted for further underwriting review. The FHA Mortgage Refinance Loan Company is not directly affiliated with any government agency. We provide an online marketplace for consumers searching for FHA loans and HUD resources. We are affiliated with HUD approved FHA mortgage lenders. If you would like to contact HUD directly please visit their website online.