An FHA loan is guaranteed or insured by the Federal Housing Administration (FHA). It is typically fixed in its interest rates and terms. They include:
FHA Streamline Refinance Loans
FHA 203(k) Loans
$100 HUD Repos are eligible
Down Payment Assistance Programs
Government-insured FHA Home Loans are a popular loan for first time home buyers because only a minimal down payment of 3.5% of the sales price is required. This down payment may include a gift from a qualifying individual.
Fixed-Rate Mortgages and Adjustable Rate Mortgages (with different conversion terms) are available and the interest rate is lower than that of conventional loans.
The qualification guidelines are also more lenient than those of Conventional Loans, including cases such as higher debt-to-income ratios and shorter length of time for financing after bankruptcy or foreclosure.
FHA Streamline Refinance Loan
An FHA Streamline Refinance can be obtained with less than perfect credit, minimal documentation and do not require an appraisal. Many homeowners who have difficulty paying their mortgage, and would prefer a lower interest rate and monthly payment can refinance a Conventional Loan to an FHA Streamline Refinance Loan.
FHA 203(k) Loan
An FHA 203k loan allows you to borrow money, using only one loan, for both home improvement and a home purchase. It allows you to wrap your renovation costs into your mortgage. The amount you borrow is a combination of the price of the home and the estimated price of the repairs, including labor and materials. The qualifications for this loan are more strict than those of a regular FHA loan, including a higher credit score requirement. The $100 HUD Repos are eligible.
Down Payment Assistance (DPA) Programs
Many State, County, and Local Governments offer various loan assistance, grant, and bond programs for qualifying low-to-moderate income families wishing to purchase a home, and do not have the necessary funds to do so. This assistance is provided in conjunction with the FHA mortgage loan and is sometimes granted as a “soft” or “forgivable” second mortgage that does not require repayment if certain criteria are met, such as length of time in the home and how soon after purchase the loan is refinanced or the house is sold.
Borrowers have to meet certain eligibility requirements such as: attend a Community Homebuyer’s Class, have a minimum of $1,000 invested in the loan, pay minimal fees for the down payment assistance funds, and meet minimum credit score requirements (640) and debt-to-income ratios guidelines. Some programs also have a maximum household income in order to receive the funds.