FHA Loans
It's easy to understand why many people looking for a new home are turning to FHA insured loan programs. Because FHA Loans are insured by the Federal Housing Administration, homebuyers have an easier time qualifying for a mortgage. Those who typically benefit most by an FHA loan are first-time home buyers and those who have less than perfect credit.
How FHA Loans Work
At Team Texas at Efinity Mortgage we want to help you understand how a FHA mortgage loan works. In all actuality the Federal Housing Administration (FHA) doesn't loan any money, they insure it. This means that you're considered to be a less risky borrower than someone who might not have the backing of the federal government. Our role is to make sure that you qualify for an FHA mortgage and structure your loan to reflect it.
Whether you are trying to determine if you qualify or if you are interested in finding out what kind of documentation you'll need to ultimately get your loan, our site can provide you the information you are seeking.
FHA Qualification Requirements
In order to qualify for an FHA loan, a borrower typically needs to meet this criteria:
- Credit score of 580 or higher for the 3.5% minimum down payment; scores from 500 to 579 may qualify with 10% down
- Steady income and employment, usually with a two-year history (job changes in the same field are fine) and education counts toward the two year history
- Total monthly debts, including the new payment, generally up to about 50% of gross income, and higher in some cases with strong credit or savings
- The entire down payment can be a gift from family
- At least 2 years since a Chapter 7 bankruptcy discharge, or 12 months of on-time Chapter 13 plan payments with court approval
- At least 3 years since a foreclosure
- The home must be your primary residence and meet FHA property standards
As FHA Loan specialists we can help you understand any new changes to the FHA loan program. We're here to create a customized solution that works best for you and your family.
FHA Benefits
Easier to Qualify
Government backing makes approval more likely
Low Down Payment
Only 3.5% down required, gifts accepted
Poor Credit OK
Lower credit scores can still qualify
Better Rates
Government backing provides competitive rates
FHA Loan Common Questions
FHA stands for the Federal Housing Administration. It was created in 1934 to help Americans get into homes.
It's easier to qualify for than most conventional loans: lower credit scores, a 3.5% down payment that can be gifted, and more room for existing debt. That makes it a popular choice for first-time buyers in North Texas.
Many FHA borrowers are approved with total debts up to about 50% of gross monthly income, and some qualify above that with strong credit or cash reserves. We'll run your numbers before you shop.
Yes. FHA loans have no prepayment penalty.
Yes. A buyer can take over an existing FHA loan if they qualify with the lender. That can be a selling point when rates have risen since the loan was made.
Yes. FHA charges an upfront premium of 1.75% of the loan, usually rolled into the loan amount, plus an annual premium paid monthly. With less than 10% down, the annual premium lasts for the life of the loan; with 10% or more down, it ends after 11 years. Many owners later refinance into a conventional loan to drop it.
Yes. The FHA 203(k) loan lets you finance the home and the repairs together in one mortgage. Ask us whether a home you're considering is a good fit.
Looking for an FHA Loan?
FHA insured mortgages are some of the best kinds of mortgages available because they can help more people into the home buying market. Let our FHA loan specialists help you understand any new changes to the program and create a customized solution that works best for you and your family.