Whether you are buying a new home or ready to finance your current home, FHA Loans are a great option. Frequently a favorite of first-time homebuyers, FHA Loans are insured by the Federal Housing Administration (FHA), part of the US Department of Housing and Urban Development. They were created for low to moderate-income borrowers to become homeowners.
FHA Loans have many features that make them a popular loan choice:
- Down payment requirements as low as 3.5% of the sales price of the home
- Qualification guidelines are less strict than many other loan programs
- Available as a fixed-rate mortgage or an adjustable-rate mortgage
- Allow for lower credit scores than most conventional loans
- Low closing costs
The government guarantees FHA loans, but the funding comes from private lenders like Mortgage Equity Partners. Borrowers who take out an FHA loan must purchase private mortgage insurance. The property purchased with an FHA loan must be a primary residence and owner occupied in most cases. They can be used for purchases and refinances on single-family homes, multi-family homes (up to 4 units), condominiums.
FHA loans are not for every borrower. They are designed to help borrowers with good credit and low to moderate-income who have little extra cash for a down payment. In addition, the qualifying standards of FHA loans make homeownership available to many people who may not qualify for a conventional loan.
To learn more, contact one of our experienced loan officers, who can advise you on the best loan option for you.