We updated this page recently in 2013 please check back often for additional updates to our premium Discount FHA and our low score portfolio FHA programs
FHA stands for the federal housing administration, the program is managed by the U.S. Department of Housing and Urban Development – HUD. Complete FHA guidelines can be found on the FHA gov website which is http://portal.hud.gov – However everything (all the practical information) you need to know about getting a FHA loan is right here on this page.
I’ll focus this page on residential purchase and refinance loans, it’s not widely known but the FHA – HUD also insures large commercial loans for residential housing projects, nursing homes (A.L.F.’s) and other community projects as well as reverse mortgages for seniors.
If you don’t have a lot of time just read this part of the FHA loan guide.
- You’ll need a verifiable with tax returns source of income, a credit history with a mid credit score of 560 with C-Mortgage.com ( most other lenders require 640+), and a 3.5% -10% down payment plus closing costs.
- Closing costs can be added into the sales contract and paid by the seller. Ask for 6% accept no less than 3%
- We do offer FHA 580 credit score loans as well.
- Note with manual underwriting FHA loans are available for individuals with no credit history.
- Credit scores less than 580 can be improved quickly, see our credit restoration guide.
- A good mortgage broker who has wholesale approvals to many FHA lenders will give you an advantage
- A 203K loan can be used to purchase and repair or rebuild a home in need of repairs – aka FHA rehab loan
- 203b is the standard FHA program – almost no one calls it that though
- Your mortgage broker will help you decide if FHA is the best option, Conventional and Hard Money loans for people with bad credit are also an option
- Working with Credit Technologies Credit Expert can help
more borrowersyou qualify for a loan if credit is the only issue
Options for Home Loans outside of Florida
Difference between conventional and FHA loan
FHA loans offer lower down payments and lower credit score requirements than conventional loans. Making them easier to get. Note: the government site says the minimum credit score for FHA is 500, however there are no lenders I am aware of that will fund FHA loans with credit scores below 580 and most require 640. The minimum credit score for a conventional loan is 620 with a 20% down payment, 680+ credit scores are needed for smaller down payments on Conventional home loans.
FHA loans are insured by the government, all FHA loans have mortgage insurance. Conventional mortgage loans are technically any mortgage loan that is not a government backed mortgage. What most people mean when the say conventional loan is a mortgage-backed by Fannie Mae or Freddie Mac. Fannie and Freddie used to be private government sponsored companies now they are owned by the federal government because of the bailout money required to keep them from failing. Fannie Mae and Freddie Mac still provide funds by purchasing conventional notes much in the same way as when they were private GSE’s.
What you need to know about the differences between FHA and Conventional mortgages
FHA 3.5% down 620 credit score, some lenders will do 580 scores manually underwritten with 5% down and open credit accounts
Conventional 5% down 680 credit score
All FHA loans have mortgage insurance
Conventional loans with 20% or more down do not have mortgage insurance
FHA Loan FAQ Top Ten Frequently Asked FHA Questions
- FHA loan credit score requirements? – 560-580, 620, or 640 depending on the lender.
- FHA loan down payment requirements ? – 3.5% down , more with low credit scores.
- FHA loan income limits? – none.
- Credit score required for FHA loan? Government website says 500, it’s really 580.
- Credit requirements for FHA loan? Most lenders want to see at least one open and active account reporting on your credit report by one of the credit bureaus.
- FHA loan closing cost calculator? Here
- Estimated closing costs for FHA loan? 6% of the loan amount, loans over 100K less, smaller loans more. 1.75% is the upfront mortgage insurance premium that is financed on top of your loan
- Maximum FHA loan amount 2013? Depends on area click here to check yours
- FHA loan estimator? Call 1-800-287-8858 or apply online for an accurate estimate
- FHA streamline refinance rates? They are the same as regular FHA mortgage rates
First time home buyer programs – The FHA program was designed to meet the needs of first time buyers with low down payments. It also works for buyers and refinancing with low credit scores. Anyone can use the program to finance a home up to the maximum loan limits for your geographic area. There are no income restrictions and in many cases FHA can be a better choice unless you are putting 20% down.
Other good first time home buyer loans are the USDA rural development loan, and Fannie Mae’s Homepath loan.
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