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What Is a FHA Loan?

FHA loans are backed by the Federal Housing Administration; they protect the lender from financial risk as they allow for a riskier client to purchase or refinance. With higher allowances for debt to income and a lower threshold for credit scores, these loans are ideal for first time home buyers. Down payments can be as low as 3.5% but with all the positives there are some catches; FHA loans require an Upfront Funding Fee but that can be financed into the loan. In addition, there is a monthly mortgage insurance premium and, in some cases, can last the entirety of the loan.

Advantages: Lower credit score requirements, scores can be as low as 500 but will require at least 10% down. 580 and above will require 3.5% down. Allows for higher debt to income ratios. Programs: 203B, 203K (Renovation loan) and Streamlines.

Benefits of a FHA Loan:

Easier to Qualify for:

  • Low Down Payment
  • Lower Credit Borrowers Qualify
  • Better Interest Rates
  • Better Home Stability
FHA Loan Checklist

Employment Info

  • Past two years completed tax returns.
  • Past two years W-2’s, 1099’s and any other necessary tax forms.
  • One-month worth of newest pay stubs.
  • Self-employed will need two years tax returns and YTD Profit & Loss Statement

Savings Info

  • Past two months full bank statements for all accounts.
  • Recent statements from investment accounts (retirement, 410k, mutual funds, etc.)

Personal Info

  • Driver’s License or other official State identification.
  • Any Divorce, Palimony, Alimony or Child Support Documents.
  • Green card or work-permit (if applicable)

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