What are FHA Loans?
Backed by the Federal Housing Administration, FHA loans are extremely popular among first time homebuyers and others interested in low down payment mortgage options. FHA loans make it possible to put as little as 3.5% down on a home purchase or borrow up to 97.75% with an FHA refinance. There are also FHA loans that make the purchase and renovation or repair of a home affordable and easy through one mortgage loan or refinance.
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Benefits of FHA Loans
- Low down payment requirements
- Low Mortgage Rates
- May be easier to qualify for compared to other loans
- Available in 30 year and 15 year loan terms
Available FHA Loan Options
- Purchase Loans – Facilitate home financing for as little as 3.5% down. FHA guidelines also allow for the down payment to come from gift funds and for seller-paid closing costs up to 6%
- Refinance – Choose from a rate and term or cash-out refinance. If you are moving from one FHA loan into a new FHA refinance, you may qualify for a Streamline Refinance that has reduced fees and a more simplified process
- Mobile Home Loans – eLEND offers a specialty FHA mortgage designed to finance mobile homes
- Manufactured & Modular Home Loans – eLEND offers a specialty FHA mortgage designed to finance mobile and manufactured homes
- Multi-Unit Property – As long as one unit in the home is used as your primary residence, you can generally use an FHA mortgage to finance a two- to four-unit property.
- Renovation Loans – eLEND offers a variety of FHA eligible renovation loan programs to finance a property in need of repairs or renovations (Read more about all of our “purchase and renovate” programs.)
Each of these programs is backed by an agency of the US government, meaning they insure the lender against losses should the home go into default or foreclosure. This allows lenders to offer more favorable terms to borrowers and creates many home ownership opportunities.
How do I qualify for an FHA Loan?
Qualification requirements will vary depending on which type of FHA loan you apply for, but will be based on several factors including:
- Credit history and score
- The amount of income you earn
- The amount of your other debts
- How much equity you will have in the property
- Home must be used as your primary residence
- Loan amounts are restricted to the FHA loan limits which vary by county and are based on the cost of real estate in that area