What is an FHA loan?
The purpose of FHA loans is simple: to make homebuying more accessible to more people. With roots way back in the 1930’s, FHA loans are insured by the Federal Housing Administration (FHA) and serviced by lenders like us. And because of their flexible credit and down payment requirements, FHA loans are popular with many homebuyers, especially millennials and first-time homebuyers.
Is an FHA loan right for me?
There are pros and cons to every type of home loan. No shocker there. But an FHA loan might be right for you if:
- You’re a first-time homebuyer
- You don’t have the down payment required for a conventional loan
- You have a less-than-perfect credit score and/or a limited credit history
How is an FHA loan different than a conventional home loan?
There’s a lot that separates FHA loans from conventional home loans, including:
- A down payment as low as 3.5% (this requires mortgage insurance – ask your Home Loan Specialist for details)
- Debt-to-income ratio extending above conventional limits
- Loan limits up to $729,750 (these can vary by state and county)
Am I eligible for an FHA loan?
An FHA loan can be one of the easier home loans to qualify for. But you do have to satisfy a few things to be deemed eligible. For example, you have to:
- Have a minimum down payment of 3.5%
- Use the loan for a primary residence
- Have a steady employment history or have worked for the same employer for the past 2 years
- Have a minimum credit score of 580 Current homeowners may also be eligible for an FHA refinance or an FHA Streamline refinance, which helps make the process sweet, simple, and swift.
Think you and an FHA loan are meant to be? A ditech Home Loan Specialist can help point you in the right direction.
Not sure if an FHA loan is right for you?
Check out some other popular home loan options that may be a better fit.