FHA Loan

FHA stands for Federal Housing Administration. These types of loans are a part of the U.S Dept. of Housing and Urban Development, which is otherwise known as HUD.  These loans include lower down payments, and are easier to obtain rather than conventional loans.FHA loans are great to get into if you are a first time home buyer or someone who might have trouble coming up with down payment needs. These loans were created to help establish what one can afford to spend on a home. These loans also help borrowers become aware of the rights they have when looking for a home. Due to the fact that FHA loans are a part of HUD; there will be no room for discrimination when it comes down to the borrower shopping for homes. This means as long as the loan requirements are met people of all race, sex, religion, color, familial status, disability, and national origin. HUD will stand behind all approved borrowers.  Senior citizens can also benefit from an FHA loan program.  They can be either 62 years of age or older, reside in the home they are trying to sell, and even own it, as well as have a small loan already in existence. They will also be allowed to look at all different types of housing developments such as: houses, condos, rentals, apartment buildings, as well as mobile homes. Senior citizens also have the opportunity of having their social security income grossed up to help them qualify for a larger loan amount. That is only if they solely depend on social security. Their income may be grossed up to 25% of the social security amount. FHA does entail for the majority of borrowers to have a minimum of 3.5% of the down payment towards the homes asking price. Borrowers can use the money they have in savings to meet the down payment needs. Some other acceptable sources of cash can include a gift from a family member, as well as a grant from a local state or government. FHA loans also allow sellers to pay a portion of the borrower’s closing costs, such as: an appraisal, credit report, or title fees. Two mortgage insured premiums are essential when qualifying for an FHA loan. The first one is called an “upfront premium”, which is 1.75% of the amount borrowed and can be financed as part of the new loan. The second is called the annual premium; which is paid monthly and is included in the monthly mortgage payments. One other positive quality regarding FHA loans is that it will allow borrowers up to $5,000 in repair escrow. FHA loans allow borrowers to make upfront payments on top of their monthly payments if they wish. This is beneficial to the borrower to pay back their loan faster and easier, as well as limit the money needed for interest rates. Last but not least, here is what you need to know in order to qualify for an FHA loan. In order to qualify for an FHA loan through Direct Lending Group one must have a minimum of a 620 credit score, sufficient funds to cover closing costs, as well as a steady income in order to be able to afford the monthly mortgage payments. If you are seeking to get into an FHA loan but don’t think your credit score meets our requirements, you might be able to still qualify if you can come up with at least 10% of a down payment towards the home. Before trying to qualify for an FHA loan, one must first apply with Direct Lending Group.