FHA Loans are Making a Strong Comeback!

Buying a new home is an exciting time, it also takes a great deal of time and decision making. Finding the right mortgage is just as important and in today’s market this can be a very challenging task. We are finding more than ever that to qualify for a loan the rules are becoming more and more stringent. I am very happy to let you know that it might be a little easier than you think with the new FHA qualifications.

With the recent problems suffered by sub prime mortgage lenders, FHA loans are making a strong comeback. It will be easier for many of us out there to qualify for an FHA loan than ever before, this is really GOOD NEWS. These loans are a useful alternative for first time home buyers and other home buyers with less than perfect credit.

There are far fewer restrictions for a FHA Loan Qualification compared to a standard mortage loan, and you can even apply if you have no credit history if you can prove that you have met past financial obligations.

 Some of the qualifications are :

Low/no down payment (3% down)

100% Gift money ok

Overall credit not just Fico scores

High debt ratios

Bankruptcy needs to be at least 2 years old with continuing good credit

Foreclosures will need to be older than 3 years with continuing good credit

An FHA Loan can be assumed from a seller or passed onto a buyer 

These are just a few of the qualifying factors - but it will certainly make borrowing easier for those with less than stellar credit or little downpayment to purchase their home.

 FHA does not actually lend money, it insures that the total mortgage will be paid to the lender if the buyer defaults.  It is always the decision of the private lender to decide whether or not to they will lend the money.

The FHA was established by the goverment to improve housing options back in 1934. Prior to this a down payment of typically 50% of the homes purchase price was required and had to be paid back between 1-5 years.

So if you’re thinking of buying in this great market, it might be worthwhile giving the FHA Loan some consideration.