What is an FHA loan?
FHA loans have been helping people become homeowners since 1934. The Federal Housing Administration (FHA) – which is part of HUD (Dept of Housing and Urban Development) – insures the loan, so your lender can offer you a better deal. The loan is approved using FHA guidelines.
| |
|
|
|
What are the advantages of an FHA loan?
Low down payment (3%) and easier credit qualifying than a conventional mortgage. FHA also allows all of your down payment to be a gift from a family member or approved grant proceeds.
FHA requires that a home meet certain minimum condition standards to protect the homebuyer and assure FHA of the soundness and marketability of the home.
| |
|
|
|
What are the disadvantages of an FHA loan?
FHA loans require mortgage insurance. It is paid in two ways. There is an up-front monthly premium of 1.5% of the loan amount that is rolled into the loan, and there is a monthly fee paid in your mortgage payment each month.
FHA requires that a property meet certain minimum standards at appraisal. (Recent changes have made these standards less stringent.) If the home you are purchasing does not meet these standards and a seller will not agree to the required repairs, your only option is to pay for the required repairs at closing (to be held in escrow until the repairs are complete).
There are loan limits based on county.
| |
|
|
|
Are there income limits on FHA loans?
No.
| |
|
|
|
Are there loan amount limits on FHA loans?
Yes. For example, in Utah the following limits apply for a single family home:
Davis, Weber, Utah and Box Elder Counties $ 397,500
Salt Lake, Tooele, and Summit Counties $ 729,750
| |
|
|
|
What is an FHA 203K loan?
This loan allows you to borrow funds above the purchase price to do significant FHA allowable repairs and remodeling. If you are interested in this type of loan you will want to find a loan officer that specializes in 203K loans. These loans have very specific guidelines and processes and I do not offer them at this time.
| |
|
|
|
I want to buy a duplex. Can I do an FHA loan?
Yes. As long as you are planning on living in the property as your primary residence, FHA will lend on a 2-4 family property as long as it complies with all of the FHA guidelines. You will be able to use 75% of the rental income to help qualify for the payment.
| |
|
|
|
Is Utah Housing an FHA loan?
Utah Housing is either an FHA loan or a VA loan that also complies with the Utah Housing guidelines. For more information, click on my Utah Housing page.
| |
|
|
|
Can I qualify for an FHA loan?
Go to my "Can I Qualify?" page to see the profile for an FHA borrower.
| |
|
|
|
