FHA Loans

An FHA mortgage is a government-backed home loan with more flexible lending requirements than conventional loans.

FHA loans are insured by the Federal Housing Administration (FHA) and may have an easier qualification process due to less stringent down-payment and credit requirements than conventional mortgages. Note: If you’re a current military member or veteran, you may be eligible for a VA home loan with little or no downpayment.

One size doesn’t fit all in the world of mortgage lending. Sometimes a specific home may be a better fit with an FHA mortgage even if you qualify for a conventional mortgage. We are able to provide a thorough breakdown of both options and let you make the decision on the best financial move for you.

An FHA mortgage may be a good fit if your credit is not up to the requirements of a conventional loan or you have limited cash for a down payment. Contact Residential Funding Consultants to learn more and find out which mortgage option may be the best fit for you.

Benefits and Considerations

Low monthly payments

FHA mortgages generally require a minimum down payment of 3.5%. Another benefit of an FHA loan is that the interest rate is typically more competitive than a conventional mortgage.

Low credit thresholds

One of the benefits of the FHA loan program is that home buyers may qualify even without a long credit history or outstanding credit. Credit scores usually need to be at 580 or higher to have a chance at qualifying. Sometimes credit scores can be as low as 500, with additional caveats.

Requirements and Qualifications

Conventional ARMs typically feature lower interest rates and APRs during the initial rate period compared to fixed-rate loans, but rates could increase or decrease once the initial rate expires.

Loan Amount

FHA home loans have maximum mortgage limits that vary by state and county.

Down Payment

FHA loan guidelines require a minimum down payment of 3.5%.

Property Condition

FHA loans require that the home being purchased must meet certain conditions and be appraised by an FHA-approved appraiser. New FHA loans are available only for homes that will be used as the buyer’s primary residence.