FHA Loans Are Great For Homebuyers
The Federal Housing Administration (FHA) is a division of the Department of Housing and Urban Development that insures residential mortgage loans made by private lenders and sets standards for underwriting mortgages. With terms up to 30 years and as little as 3.5% downpayment, it helps make home ownership affordable.
The Good News About FHA For First Time Buyers
FHA was designed to increase home ownership in the U.S. and is perfect for your first home. While your credit score is considered, loan approval is not totally driven by your credit score. FHA incorporates underwriting guidelines that often allow those with less than perfect credit to qualify.
Down payment can come from gifts (family, friends, employer, church, etc.), cash, home trade-in or land equity. Your land equity can also be used to cover closing costs.
With an FHA Title II loan, your land, improvements and home are all included in one loan. That reduces out-of-pocket cash required for your new home investment. Your monthly payment will also include an escrow for taxes and insurance so you can avoid coming up with a large amount of cash when due each year.