The FHA (Federal Housing Administration) is an agency of the Federal Government. Although you may have heard the term "FHA Loan", the FHA is actually not a lending institution. The FHA does not make loans and it does not provide money for people to purchase homes.
What the FHA does do is provide mortgage insurance. The FHA insures loans that are originated by FHA-approved lenders. This insurance gives the lender an extra layer of protection in the event that the borrower defaults
Because of this insurance, FHA loans have more liberal lending guidelines for homebuyers than conventional loans:
- A minimum credit score is not usually required, though individual lenders may have their own guidelines, and may request credit scores of at least 620
- Family members, employers, or charitable organizations can contribute money towards the down payment
- Smaller down payments are OK – sometimes as low as 3.5%
- Most of the closing costs and fees can be included in the loan
- If the borrower does not have an established credit history, the lender can take into consideration utility bills, car insurance, rent and other expenses.
The same terms can also be available if you want to refinance with an FHA loan. The FHA Streamline Refinance is appropriate for homeowners with lower credit scores. Additionally, you do not need an appraisal, and you can roll your closing costs into your loan. You can refinance with an FHA loan even if you owe more than your home is worth. It’s a great opportunity to lock into the still-great rates that we are enjoying today.
Visit us on the web at emortgages.com for current rates. Visit us at fharefinancecalifornia.com for specific information on FHA Streamline refinances.
You can call me at (707) 763-6290 or email me at js@emortgages.com and I’ll be happy to answer any questions you may have about FHA loan products or any other real estate financial questions.
We’ve removed the ability to reply as we work to make improvements. Learn more here
