 FHA Mortgage Loans
What are FHA Mortgage Loans?
FHA stands for Federal Housing Authority. A Federal Housing Authority loan provides low-cost insured home mortgage loans that suit a variety of options. Whether you're buying a home or want or refinance your mortgage, an FHA mortgage loan might be right for you. If you're unsure about your credit rating, or have concerns about a down payment, ENG Lending's FHA mortgage loans can give you piece of mind with super low closing costs and flexible payment options.
What are the advantages of FHA Mortgage versus Conventional Loans?
FHA mortgage loans offer many benefits and protections that you won't find in other loans including:
 FHA Mortgages are Credit Flexible
FHA mortgage loan requirements are not totally credit score driven, although it is required to have at least a 620 FICO score to obtain an approval through ENG Lending. FHA mortgage guidelines are written in a way that provides the borrower the benefit of the doubt that there had been, at some point in their past, circumstances beyond their control, and as long as the borrower has recovered from those circumstances in a reasonable manner, they're generally going to be credit-eligible for an FHA mortgage.
FHA Mortgages have Great Interest Rates and Low Monthly Mortgage Insurance
A distinct advantage of an FHA mortgage, as compared to a conforming loan, is great interest rates and lower monthly mortgage insurance (MI). Depending on the program, the daily FHA mortgage rates are usually better than a conforming 30-Year Fixed loan.
FHA Mortgages Require a Smaller Down Payment
FHA Mortgages have a low 3.5% down payment and the money can come from a family member, employer or charitable organization as a gift. Other loan programs don't allow this.
FHA Offers More Protection to Keep Your Home
The FHA has been around since 1934 and will continue to be here to protect you. Should you encounter hard times after buying your home, the FHA has many options to help you keep you in your home and avoid foreclosure.
What factors determine if I am eligible for an FHA Loan?
To be eligible for an FHA Mortgage Loan, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income (31% ratio). Your credit background will be fairly considered. At least a 620 FICO credit score is required to obtain an FHA approval through ENG Lending. You must also have enough income to pay your housing costs plus all additional monthly debt (43% ratio). These ratios can be exceeded somewhat with compensating factors.
See more on FHA Mortgage Requirements.
What is the maximum amount that I can borrow?
The maximum amount for an FHA home loan is determined by:
Maximum Loan Amount: The maximum loan amount allowed for an FHA Mortgage varies from county to county. The highest maximum FHA Mortgage right now is $729,750. The lowest maximum FHA Mortgage amount available in any county is $271,050. To see what the limit is in the county in which you're interested, visit the following site https://entp.hud.gov/idapp/html/hicostlook.cfm. This site lists U.S. territories as well as states.
Maximum financing: Depending on the state where the property is located, the maximum FHA Mortgage amount will be 97.75% of the appraised value of the home or its selling price, whichever is lower.
How much money will I need for the down payment and closing costs?
FHA Mortgage Loans require the home buyer to invest at least 3.5% of the sales price in cash for the down payment and closing costs. If the sales price is $100,000 for example, the home buyer must invest at least $3,500. However, the home buyer can use gifts from family, funds from local, state or government agencies, or other sources for the down payment.
What property types are allowed for FHA Mortgages?
While FHA Mortgage Guidelines do require that the property be Owner Occupied (OO), they do allow you to purchase condos, planned unit developments, manufactured homes, and 1-4 family residences, in which the borrower intends to occupy one part of the multi-unit residence.
Can I get an FHA Mortgage after bankruptcy?
Criteria for FHA loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for two years or more, you are eligible to apply for an FHA mortgage. If you are in a Chapter 13 bankruptcy and have made all court approved payments on time and as agreed for at least one year, you are also eligible to make an FHA loan application.
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