What Is an FHA Loan?

A mortgage loan that is guaranteed/insured by the Federal Housing Administration. This means that the federal government will make the lender whole if the borrower defaults on the loan.   

It’s an excellent option designed to make homeownership more affordable with a lower down payment than conventional options

FHA loan requirements

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Key benefits of an FHA loan

Low Down Payment

FHA loans only require a 3.50% down payment. Making home ownership possible for more Americans.

Easy to Qualify

When you don't have perfect credit, FHA loans are best. Minimum credit score for a FHA loan is 580.

Lower Rates

When compared to conventional loans, FHA 30-yr fix rates are generally lower.

FHA loan Costs/Fees

This loan has 2 types of fees:

Out of pocket – Paid before the loan closes

Appraisal fee – paid directly to the appraiser. This fee will range between $500-750 depending on the property type and location. You will know what this cost is well before incurring the charge.

Fees rolled into the loan

Up front mortgage insurance premium (UPMIP). This is generally 1.75% of the loan amount and is rolled into your loan. In other words, you do not come out of pocket for this fee. This is required on ALL FHA loans and is paid directly to the federal government.

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